Tesco to slash Clubcard rewards for 2.8 million credit card customers
Millions of Tesco credit card customers will see the amount of Clubcard points they earn drastically reduced later this year.
From December, Clubcard Credit Card shoppers will see rewards on purchases in non-Tesco stores halved from one point for every £4 spent to one for every £8.
Tesco World Mastercard customers will fare even worse as the rate jumps from one point for every £2 to one in £8, meaning they will earn just a quarter of the points on non-Tesco purchases. This change will be implemented in November.
A total of 2.8 million customers will be affected.
The wider Clubcard system will remain unchanged, as will the higher rate credit card customers earn when making purchases in-store or online at Tesco.
The retail giant said it will make the changes in response to impending regulations that cap the amount card companies can charge merchants for carrying out transactions.
Capital One also made changes to its rewards as a result of the cap on interchange fees, which is due later this year.
Explaining the decision, a Tesco Bank spokesman said: "As a result of changes in the credit card industry taking affect this year, the amount that card companies earn from businesses who accept credit cards is reducing.
"At Tesco Bank, we use that income to fund the Clubcard benefits we give back to our customers and as a result we've had to make some changes to the amount of points our customers earn.
"Customers will continue to receive the same amount of Clubcard points when they use their credit card in Tesco. Furthermore, they will still earn Clubcard points almost every time they use their card.
"However, because of the impact of the new regulation, the amount of points customers receive when they use their card out of Tesco is reducing to one point for every £8 spent.
"While we are disappointed that the industry changes have resulted in the need to reduce the Clubcard earn rate on our cards when they are used outside of Tesco, we have worked hard to ensure that our credit cards continue to offer great value for customers. We are committed to offering the most rewarding cards we can."