Under the new credit card clause which takes effect from March, affected customers could pay double the interest and default fees, plus £5.

This could add an average of £20 to monthly repayments, meaning customers will pay down the debt faster and pay less in interest.

But for those customers who may struggle with the higher monthly minimum payment, Tesco Bank said they will be excluded.

It added that approximately 5% of its credit card customers – up to 125,000 – will be affected by the credit card shake-up.

The move by Tesco Bank comes just days after Barclaycard changed the terms and conditions for customers which meant some would see their minimum monthly payment increased.

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The change applies to some credit card accounts that were opened between November 2017 and May 2020 and for those customers who are still within their introductory period.

Essentially the changes bring existing customers into the same minimum payment model as has been applied to new customers since May 2020.

However, Foundation credit card customers are not impacted.

And despite the changes coming into effect from March 2021, for those in their introductory period, the changes will come into force after the introductory period comes to an end.

The new minimum payment is the greater of these four points:

• 2 x (interest + default fees) + £5 – (this is the new additional clause)
• 1% of balance + interest + default fees (existing clause)
• £25 (existing clause)
• Over limit amount including over limit fees (existing clause).

Currently, card holders pre-November 2017 have payments calculated using the bottom three points. But the first point is new and has been added to the calculations so from March, if it is the highest payment of the four clauses, you’ll see your monthly payments rise.

Tesco carried out assessments of customers to identify any who may struggle with the higher payments. This group have been excluded from the changes. It has now sent out all letters to impacted customers and said customers should get in touch if they have concerns about the changes.

A Tesco Bank spokesperson, said: “From March 2021, a small proportion of our credit card customers will see a change in the way their minimum payments are calculated. This decision was taken to help customers pay down their credit card debts more quickly, resulting in them having lower interest charges and reducing the risk of them entering persistent debt. We’ve excluded customers from this change where we’ve identified they may have difficulty affording the new minimum payment.  Any customer who has concerns about meeting a new minimum payment amount should contact us.”