The best credit cards for airmiles and loyalty points are disappearing fast.
Just last week, Money Mail revealed how customers of Lloyds Bank face severe cuts to their Avios air miles credit card perks when the firm replaces its five cards with a single option that offers fewer points for every £1 spent.
Experts blame EU rules introduced in 2015 that cap how much credit card companies can charge retailers when customers make transactions in their stores.
Frequent flier? Some cards can slash the cost of flights by thousands of pounds
But there is still a handful of top deals up for grabs — and if you’re a frequent flyer, these cards can slash the cost of flights by thousands of pounds.
Here, we take you through the most generous airline rewards cards so you can choose the right one for you.
BEST IF YOU’RE NEW TO THE GAME
Unsure whether an airline rewards credit card is for you? The American Express Preferred Rewards Gold Credit Card is a good place to start.
There is no fee for a year, so if you find the card isn’t worth bothering with, it won’t have cost you anything — but be sure to cancel it because there is a £140 annual fee after the first 12 months.
For every £1 you spend on the card, you will get one Membership Reward point. You will then get two points for every £1 you spend directly with airlines or in a foreign currency, and three points for every £1 spent at American Express Travel, the credit card firm’s own online travel agency.
If you spend at least £2,000 in the first three months, you will get a generous bonus of 20,000 points.
These can be converted into Avios points, which can then be traded for British Airways flights.
You can also convert points into airmiles that can be used with other airlines such as Virgin and Emirates.
Avios points can then be traded for British Airways flights
Rob Burgess, editor of frequent flyer website headforpoints.com, says the benefit of Avios is that you don’t need to accumulate as many points to reap rewards because they can be used on British Airways’ short-haul network, whereas other airmiles schemes, such as Virgin Atlantic, are limited to long-haul destinations, which cost more.
If you don’t want to use the points for travel, you can swap them for other rewards such as an Amazon or Marks & Spencer gift card. To get a £25 Amazon gift card, you would need 5,000 Membership Reward points, which would mean spending £5,000.
If a typical customer put £18,000 on their card over the course of a year, and spent £2,000 on holidays, they would earn 42,000 points (including the 20,000 bonus points you get in the first three months). This could buy two return flights to Marrakech or one return flight to New York in economy.
Or you could buy a £200 Amazon gift card with 40,000 points.
You will also get two complimentary lounge passes every year which can be used in 700 airport lounges around the world.
These are worth between £18.50 and £45 when used in the UK.
BEST FOR COUPLES FLYING TOGETHER
The British Airways Amex credit card is one of the most popular deals among couples and families because of its two-for-one flight voucher.
It means that if you spend enough over the course of the year your partner or a friend will get a free flight in the same cabin as you.
To qualify, you must pay for your own flight using Avios and you’ll still need to pay taxes on both flights.
The British Airways Amex credit card is one of the most popular deals among couples and families because of its two-for-one flight voucher
On a short-haul flight to Paris this would cost around £35 per person. To further-afield destinations, you’ll pay much more. A flight to Bermuda, for example, would cost around £373 in charges.
There are two types of BA Amex card that offer the companion flight bonus. The British Airways American Express Credit Card is fee-free.
You will earn one Avios point for every £1 that you spend. And if you spend £1,000 in the first three months, you’ll get an extra 5,000 points.
To qualify for the free companion flight you must spend at least £20,000 on your card over the year — and you will need to buy your own ticket using your Avios points.
Top tips to boost your points
- Put every penny of your spending on your credit card — if you are out for dinner and are planning to split the bill, pick up the tab yourself and then ask your friends and family to pay you back.
- Always pay off your bill in full each month. This cannot be stressed highly enough, as the interest rates on rewards cards can be three times as high as the cheapest deals.
- Consider getting a separate card to cover your spending overseas as most rewards cards charge a hefty foreign exchange fee of around 3 pc on every purchase.
- Some rewards cards are only worth having for the sign-up bonus you receive, so make sure that you cancel this card after a few months and switch to one that pays you more for long-term use.
- Check if you are likely to qualify for a rewards card before you apply, because rejections can damage your overall credit score. There is a free eligibility tool on moneysavingexpert.com.
For 20,000 points you could get a return economy flight to Athens, plus a free flight for your partner (excluding taxes).
BA’s Amex Premium Plus Card costs £195 a year, but you will earn 1.5 Avios points per £1 spent instead of just one. You will also get three points for every £1 spent on British Airways flights and holidays.
And if you spend more than £3,000 in the first three months, you’ll get 25,000 bonus points —enough for two return economy flights to Paris or one return ticket to Gran Canaria.
To qualify for the companion voucher with this card, you only need to spend £10,000 a year. This would earn you 15,000 Avios points.
You can also earn a companion flight with the Virgin Atlantic Reward credit card. It has the advantage of being a Mastercard, which is more widely accepted in shops than Amex.
There is no annual fee and you will get 5,000 bonus miles as long as you make a purchase on the card within 90 days.
After this you’ll earn 0.75 Virgin Flying Club miles per £1 spent. If you spend £20,000 in a year, you’ll earn a companion ticket in economy, or a flight upgrade from economy to premium.
So based on this £20,000 spend, you will earn 15,000 miles, plus the 5,000-mile bonus, which is enough to buy an off-peak ‘standard’ return flight to Dubai or New York for you and a friend.
Virgin’s peak season covers the summer holidays, Christmas and Easter (June 22-September 6, December 13-January 6, and April 4-22, 2019). You will still have to pay taxes for both passengers.
FREQUENT FLYERS AND BIG SPENDERS
If you travel regularly with Virgin Atlantic, consider the Virgin Atlantic Reward+ Credit Card.
You will earn 1.5 Flying Club Miles for every £1 that you spend, and three miles for every £1 spent with Virgin Atlantic and Virgin Holidays directly.
You’ll also receive 15,000 bonus miles with your first card purchase if it’s made within 90 days of opening the account.
If you travel regularly with Virgin Atlantic, consider the Virgin Atlantic Reward+ Credit Card
To get an off-peak return flight to New York in economy class you need 20,000 miles. At 1.5 miles per £1, this would require you to spend £13,334 on the card. A round-trip to Hong Kong costs 25,000 miles — for which you would need to spend £16,667.
There is a £160 annual fee, so you must be sure you will earn enough rewards to warrant the cost.
If you fly regularly with Virgin, you can unlock extra benefits by signing up to its flight membership programme, Flying Club.
In order to receive the best perks, you would need to earn 1,000 so-called ‘tier points’ to qualify for the highest level of membership — gold.
To achieve gold membership in one year you would need to buy ten Economy Delight flights; two returns and a one-way ticket in upper class or five flexible Premium return flights.
These purchases would likely be very costly for the average traveller. For example, an upper class return ticket to Orlando, Florida, next May would cost £3,019. A Premium seat is priced at £940 and an Economy Delight ticket is £671.
But if you travel a lot for business reasons you could still see some huge benefits.
Once a gold member, you will qualify for access to clubhouse lounges around the world for you and a guest, and get a 60 per cent boost to the number of miles you earn for flights.
You will also be first in the queue for cabin upgrades when they are available.
Tier points only last for up to 13 months. Once they expire, you will move down to the next membership level.
BEST FOR CASH AND SHOPPERS
If you prefer to earn cold, hard cash rather than airmiles, the American Express Platinum Cashback Everyday credit card is the best fee-free option.
It has a welcome bonus of 5 per cent cashback on your first £2,000 of spending — or a maximum of £100. After this, you will earn 0.5 per cent on up to £5,000 a year, and 1 per cent on everything above this.
The money is paid straight back onto your credit card, so you don’t have to worry about points or vouchers expiring if you fail to use them in time. However, beware that you will not earn anything if you spend less than £3,000 in a year.
If you’re a Sainsbury’s shopper its Nectar Purchase credit card could be more for you
Other rewards cards are good if you tend to do all your shopping in one supermarket as you can earn vouchers to spend in store. The good news is they’re all Mastercard, which is more readily accepted than Amex.
M&S Bank’s Reward Plus credit card will give you 2,000 M&S points worth £20 in vouchers if you use your card within the first 90 days.
You’ll also get a further £5 M&S voucher as a welcome bonus if you use your card in store. It has a six-month interest- free period on spending and on balance transfers.
Transfers would need to be made within the first 90 days of opening the account, and there’s a 2.9 per cent fee on the balance that you move across — so £72.50 on a typical £2,500 balance.
In the first year you’ll earn double points, or two points for every £1 you spend in M&S. After 12 months this will drop to one point per £1. You’ll also earn one point for every £5 that you spend elsewhere.
So in year one, if you spend £18,000 on the card, of which £3,000 is in M&S, you’d earn 9,000 points, worth £90 in vouchers. Add in the welcome bonus and that’s £115 to spend in store.
If you’re a Sainsbury’s shopper its Nectar Purchase credit card could be more for you. In the first two months you can earn a bonus up to £37.50 worth of Nectar points (you get £3.75 each time you spend £35 in store).
With Tesco’s Clubcard credit card, you get 1,000 bonus points worth up to £30 when you make a transaction within two months
You get two Nectar points for every £1 you spend in Sainsbury’s, or one Nectar point for every £5 elsewhere.
A Nectar point is worth 0.5p so you’d earn £127.50 in the first year based on an £18,000 spend of which £3,000 was in Sainsbury’s (including bonus).
You don’t get any points from spending in Sainsbury’s petrol stations, so you’ll get nothing for fuel.
With Tesco’s Clubcard credit card, you get 1,000 bonus points worth up to £30 when you make a transaction within two months. You’ll also get one point per £4 spent in Tesco, or 1 point per £8 spent elsewhere.
One Clubcard point is worth 1p when spent in Tesco or up to 3p when exchanged for Clubcard Rewards vouchers depending on which retailer you choose.
You can even spend your Clubcard vouchers on Virgin Flying Club miles or Avios points. Clubcard vouchers worth £2.50 buys 625 Virgin Flying Club miles or 600 Avios.
They can also be spent on package holidays, cruises, hotel stays and restaurant vouchers.
THIS IS MONEY’S FIVE OF THE BEST CREDIT CARDS