Huge update for 4.1million customers of major supermarket bank after takeover – check if you’re affected
A MAJOR update has been issued to millions of customers affected by a supermarket bank takeover.
In February, Barclays agreed to purchase Tesco’s retail banking division, which included the acquisition of nearly 3,000 employees.
Customers have now been informed that their services will officially be transferred and managed by Barclays from November 1.
This follows the regulator’s approval of the takeover yesterday.
Tesco Bank currently offers a range of personal banking and insurance products, including personal loans and credit cards, to over four million customers.
The supermarket bank will retain some of its insurance services, ATMs, travel money, and gift cards.
However, all other services, including credit cards and personal loans, will be transferred to Barclays next month.
Although Barclays will manage these services, they will continue to be marketed under the Tesco Bank name for now.
Tesco Bank stopped offering mortgages through its bank in 2019 after seven years.
It’s 23,000 mortgage loans were sold to Lloyds Banking Group, which Halifax is part of, for around £3.8billion.
Tesco Bank also offered current accounts, which were closed to all customers in November 2021.
Those affected by the switch to Barclays are not required to take any action before the switch, and there will be no changes to their services after it occurs.
WHAT IT MEANS FOR YOUR MONEY
In the short term, it is likely customers won’t notice much change.
Your credit card and personal loans will still be marketed under the Tesco Bank name, and you won’t need to request a new card or change how you’re repaying any debt.
Barclays has said that it will continue to operate the business under the Tesco Bank brand for at least 10 years as part of a “long-term, exclusive strategic partnership”.
While no staff will transfer to Barclays under the scheme, it is anticipated that “approximately 2,523 employees across the UK and India” will eventually move over to the banking giant.
Tesco Bank will continue to operate its insurance products, ATMs, travel money and gift cards under its own roof.
In the meantime, it’s always worth checking to see if you can get a better credit card or land deal elsewhere.
FIND THE BEST CREDIT CARD AND LOANS
To assess all the available cards and personal loans, visit price comparison websites like MoneySavingExpert’s Cheap Credit Club or Compare the Market.
These sites allow you to tailor the perks you’re looking for, whether it’s cashback, air miles, or other rewards.
You should always use an eligibility calculator before applying, that’s because every credit card application leaves a mark on your credit file and can affect your credit score.
Once you run your details through an eligibility calculator and you’ve been shown that you’re likely to be accepted, make a formal application.
To do this, you will need to provide your name, address and email address as well as details of your income so a provider can assess your eligibility.
You will also need to provide details of how much money you want to transfer to the new card, but you can often do this after you have been accepted.
If your application is approved, you will need to transfer the balances within a set period, usually around 60 or 90 days.
Your old balance will then be cleared and you can start making interest-free repayments on your new card.
CREDIT CARD NEED-TO-KNOWS
NOT using a credit card effectively can wreak havoc on your finances and your credit score.
If you don’t keep up with repayments or default on your debt, you are likely to get a black mark on your credit record, which could affect your ability to get a credit card, loan or mortgage in the future.
It’s important not to let yourself get sucked into overspending.
You should always clear the full balance as soon as possible.
If you have a poor credit score, don’t bank on being approved for a card or getting the 0% deal you’d hoped for.
Card providers only have to give the advertised rate to 51% of applicants, so you could end up paying more interest than you bargained for.
After your 0% period is up, lenders can charge upwards of 40% interest, so if you have not repaid the debt fully by then, try to move the debt onto another 0% deal.
If you’ve got a poor credit record, you’re less likely to get the best rates.
And if you are looking for a new credit card, don’t apply for lots at once.
OTHER BANKING NEWS
Tesco Bank isn’t the only supermarket bank to have been sold in recent months.
NatWest agreed to purchase Sainsbury’s Bank in June 2024.
This follows Sainsbury’s announcement in January that it would wind down its banking division to focus on its retail business.
NatWest said it expects the takeover to be completed by March 2025, and all customers will be moved over by the end of next year.
However, Sainsbury’s will retain some of its banking activities, including insurance and travel money.
Argos Financial Services is also not included in the deal.
Last summer Sainsbury’s Bank offloaded its £479million mortgage book to Co-op Bank.
Elsewhere, Britain’s largest building society announced that it had agreed to a £2.9billion deal to take over Virgin Money in March.
Under the plans, approved by regulators in October, the two companies will run as separate entities.
The Virgin Money brand will be retained for six years before being rebranded to Nationwide.
The move will create a combined group with around 24.5million customers, more than 25,000 staff and nearly 700 branches.
This will make the organisation the country’s second largest mortgage and savings group.