Tesco’s banking arm has launched a prepaid debit card with a linked savings account that is available to the 20 million customers who hold one of the retailer’s Clubcards. The new offering, called Tesco Clubcard Pay+, is designed to help people to budget and save, the company said. You can top up the debit card from any UK bank account. Clubcard Pay+ is not designed to be used as your main bank account, and it should not be confused with a fully fledged current account. It does not have an overdraft, you cannot set up direct debits, and there are fees to be aware of. Customers get a payment account with a debit card that can be used anywhere Visa is accepted, plus a savings account called Round Up. Shoppers can add money to their Clubcard Pay+ account – allowing them to ringfence their grocery spend if they wish – by linking it to any UK bank account, using the Tesco Bank app. Customers can also opt to “save while they shop” by rounding up their purchases to the nearest pound, with the difference being paid into the Round Up account. This account pays a variable 0.25% interest, and shoppers can manage it via the app. Your Round Up balance can be transferred out of your account at any time. Several other UK banks, including Lloyds, Halifax and the new digital player Chase, offer similar features that let people turn their spare change into savings. Interest rates on these vary: some of the eligible accounts at Lloyds Bank pay as little as 0.01%, while Chase is currently offering 5%. The launch of this new way to pay comes only weeks after Tesco Bank shut down all its current accounts. Pay+ was initially offered to a limited number of customers last March and is now available to all Clubcard members living in the UK and aged 18 or over. The debit card acts as your Clubcard. As an extra perk, for the first 100 days after an account is opened, customers receive one extra Clubcard point for every £1 spent in Tesco with Clubcard Pay+. In addition to the points collected in Tesco, you also get one Clubcard point for every £8 spent outside Tesco (there are some exclusions). There are a number of things that Clubcard Pay+ does not allow, including direct debits and standing orders. Also watch out for the fact that if your account balance goes below zero – for example, if a shop accepts a payment without checking there is enough money in your account – you will need to top it up immediately. If you don’t, Tesco Bank says: “We may take steps to suspend and ultimately close your Clubcard Pay+ and Round Up accounts.” However, the bank will not hit you with fees for refusing or allowing payments linked to a lack of funds. At the moment, the bank is not offering joint accounts or allowing other people to be added to the account but that could change later. This is not a great card to use abroad: a 2.75% foreign exchange fee applies to all Clubcard Pay+ debit card transactions made outside the UK. If you make an overseas ATM cash withdrawal in a foreign currency (excluding the euro), you will need to pay an additional 1% cash withdrawal fee. Money held in the accounts is protected up to a total of £85,000 by the official Financial Services Compensation Scheme. This move represents an expansion of Tesco Bank’s financial services ambitions after it closed down all its current accounts in November last year, seven years after launching into that market. The MoneySavingExpert.com website says that while Clubcard Pay+ could be an easy way to pick up some extra points in the short-term, “in the long-term it’s possible to earn much more in points or cashback using a rewards credit card, provided you only use this for normal spending and pay it off in full each month”.