My eulogy for the bmi credit cards!

I posted last weekend that MBNA had pulled the application forms for the bmi credit cards with no warning.  This meant the end of the most generous sign-up bonus on offer from any UK loyalty card.

I said in that post that I would write something about the bmi cards and what they have done for me.  This is, admittedly, a rather odd thing to write – you don’t see many eulogies for credit cards!

To be honest, my bmi credit card – the bmi Platinum Mastercard – died some time ago for new applicants.  Most people have never even seen one, and I can’t even find a stock photo of it online.  However, the fee was £60 per year and it earned 2 miles per £1!  For a non-Amex card, this was outstanding.

The arrival of this card on the market around 2005 coincided with two other things:

  • HMRC’s willingness to take credit cards to pay tax, initially with just a 0.75% fee, and
  • My move off PAYE as I became a Partner in the firm I worked for, meaning I paid my tax in one go at the year-end

Being able to pay all of my income and capital gains tax on my bmi Mastercard was a game changer.  Even with the 0.75% fee, I was only paying 0.37p per mile.

And bmi miles were worth more than Avios, because:

  • availability to spend them was better,
  • you needed fewer of them for most places,
  • the multiplier for business class was 150% (BA is 200%) and first class was 200% (BA is 300%) and
  • you could do ‘cash and miles’ redemptions, allowing you to effectively ‘buy’ half the miles you needed for 0.7p each

I’ve lost track of the redemptions I did, but they included:

  • 3 friends and myself to Dubai (Lufthansa first class out, business back)
  • 3 friends and myself to New York (Lufthansa first class out, business back)
  • Swiss first class out to Singapore, back from Tokyo
  • Singapore Airlines first class Singapore to Tokyo
  • Myself and my wife to the Maldives (redeemed to Dubai, cash ticket to Male)
  • Business class to Moscow for myself and my wife (on a bmi plane, amazingly!)
  • Continental business class to New York for my brother and his wife

I would say that 80% of the miles used for these redemptions came from the bmi credit card!  The rest would have been from American Express Membership Rewards transfers, BAA WorldPoints, Hilton stays (1,000 miles per night), car rentals (1,700 miles per rental) and various generous bmi promotions along the way.  It also includes 3 x 20,000 mile sign-up bonuses for myself, my wife and my Mum.

And now, of course, I am a bit stuffed.

Yes, I have a huge pile of Avios.  But with two kids, the youngest turning two next April, we need 4 seats whenever we redeem.  And with our eldest now at school, we are tied to school holidays, so availability is trickier.

I can honestly say that I had no problems redeeming bmi miles on Star Alliance during peak periods, including school holidays.

Of course, the bmi scheme had already started to go downhill over the last year or so:

  • First class redemptions became 250% rather than 200% of base miles
  • ‘Cash and miles’ was dropped as an option for first class redemptions
  • Lufthansa imposed a 10,000 mile per sector surcharge for first class redemptions ….
  • …. and then LH and Swiss blocked pretty much all first class availability from Star Alliance partners anyway
  • …. and we had kids.  And when you’re travelling with young kids, having to change your plane in Germany, Switzerland or Austria to get to where you’re going looks very unappealing.

I still have a lot of Amex Membership Rewards points.  I could move those to Singapore Airlines or SAS to get access to Star Alliance availability if I wanted, although not at such good rates.  My dream solution would be for Virgin Atlantic to join Star Alliance, so I could channel my miles through them.

I should also add that MBNA was a great administrator of the bmi credit cards, and I cannot remember ever having any real difficulties with them.  They even once arranged a 3-way conference call between Santander (acting for the tax office), myself and MBNA when I had major problems putting a particularly large tax bill through my credit card, which I had put into credit in order to be able to pay it.

I still have my bmi Mastercard.  And, ironically, it is still my main credit card when I am not working towards my Amex 2-4-1 or a sign-up bonus on a new card.  2 Avios per £1 and a Mastercard which is accepted everywhere.  How could you go wrong?

Ah well.  Let’s move on.

(To see our complete list of all current credit card bonuses, click here to visit our ‘Credit Cards Update’ page or use the link in the menu bar at the top of the page.)

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Comments

  1. Great Post! And …. don’t forget the early days of the cash balance transfers where I was effectively getting 35,000 miles twice a week for £75 …….. happy days ……. sadly gone …

  2. Even the free bmi Mastercard is good value – 1.5 miles (now Avios) per £ standard rate and 3 Avios/£ at ba.com – better than other fee-free cards earning Avios.

    In addition to the numerous collection opportunities you mention, I was targeted for a miles-earning cash transfer promotion a few years ago. My limit at the time was about £30,000 and I was transferring the maximum (90%?) between my card account and my current account every couple of days. One problem: a couple of the transfers were blocked as possible repeat items. I learned that I had to transfer slightly different amounts.

    I was in Canada with limited web access at the time but was still able to earn several hundred thousand miles at low cost, which have held me in good stead ever since, including an imminent redemption from Zurich to Cape Town for 4 of us in LX biz out and SA biz back.

    Oh, well. I have transferred the balance to Avios with less favourable offers generally on the one hand but better offers as European redemptions on the other. On balance, we have secured our Zurich redemptions for some years to come.

  3. Out of interest, does HMRC accept Amex?

    • Sadly not. And the fee is now 1.4% for MasterCard and Visa. This is still an OK deal if you get 2 miles per £1 like I do on the old bmi card, but the maths aren’t good on most loyalty cards.

  4. Well, recessions come in cycles. As I’m just entering the workforce now, hopefully we’ll begin to see some good offers re-emerging towards the end of this decade when I start to earn more but before I have kids!

  5. Heggers 03 says:

    The ability to cancel and reapply to get multi sign up bonuses across both the free & paid cards were unrivaled back in the early days! The BMI MC is still the most valuable CC in my wallet; i fear it’s day for existing cardholders may be numbered!

  6. Larryflyer says:

    “you could do ‘cash and miles’ redemptions, allowing you to effectively ‘buy’ half the miles you needed for 0.7p each”

    Good time to point out that the equivalent buy-back rate for ‘Part Cash, Part Avios’ redemptions in WT and WT+ (but sadly not CW or F) is similar, at 0.8p per Avios.

    Yes, we all know that redemption in lower cabins is GENERALLY not the best use of one’s accumulated Avios, but when the alternative is full price Y or W (e.g. long-haul one-way, or for stays that do NOT include a Saturday night) redemption bookings (and especially PCPA) can be excellent value.

  7. Its great reading all of the stories, but I still can not accuractly work out how much an avios is worth. If i buy 24000avios from ba its 399 (0.016) a 2.50 club card voucher gets 600 miles which is 0.04p. So does any one know exactly how to calculate avios. Money saving expert says:For example, in our check, an economy return to New York was 40,000 Avios plus £349 taxes. The same flight cost just £375 direct from British Airways, so 1,000 Avios spent on this would be worth a piddly £1. As a ba shareholder i get 10% of their lowest fare so this would mean using avios would cost me more. However i always fly club long haul where the value seesm to be better with taxes to jkf £528.75 +80,000avios

    • In this blog I always say I value an Avios at 0.75p – so SUBSTANTIALLY less than BA sells them at! However, that is very much the bottom end of the value range. I will not do anything to get Avios which involves paying more than 0.75p for them, though.

      As you have seen, redeeming for Economy long-haul is a waste. Forget about it. The only exception is if you redeem on airberlin or Aer Lingus and start your journey outside the UK to avoid Air Passenger Duty – this will keep taxes on most routes down to £50-60 return.

      Let’s look at economy short-haul. We fly to Hamburg a lot as my parents-in-law live there. Reward Saver Economy is 9,000 Avios plus £30. A cash ticket would be £125+, so I am getting 1p per Avios of value. More importantly, my Avios tickets are fully flexible. Last weekend, when we were in Stuttgart, we decided at the last minute to come home on an earlier flight. With a cash ticket I couldn’t do that, but with an Avios ticket it was no problem (albeit you have the change fee if you are not BA Gold).

      A typical long-haul redemption might by New York. 80,000 Avios plus c £500 of taxes. Now, in a BA sale or if you don’t mind flying indirectly (eg change in Paris), you could buy a ticket to NYC for around £1,300 I guess. So, again, you are getting 1p per Avios of value plus ticket flexibility. On the downside, a cash ticket would earn you some miles back and, of course, you can get a cash ticket for whatever day you want – you are not restricted by Avios availability.

      If you use a BA Amex 2-4-1 voucher, you are getting double the value of your Avios, so 2p per Avios in these cases.

      Of course, there are other factors to consider. We live close to Heathrow so we would fly from there anyway. If you lived in Sheffield, flying to Hamburg would involve a drive to Manchester Airport and changing planes in London. You might decide that a Ryanair flight from Doncaster to the middle of nowhere, 2 hours from Hamburg, was more convenient!

      We also travel with a lot of luggage, having two kids, so BA’s free luggage allowance and access to the airport lounges is valuable to us. If you are a hand baggage only person, one of the benefits of flying BA disappears. And so on. You need to decide what works best for you.

  8. Exitcontrol says:

    Great post…ironically reading this in the KTM lounge. Another great perk of Bmi DC for those in the know. Will be greatly missed

  9. Kelly Rae says:

    Help – My husband and I both applied for BMI credit cards with the sign up bonus and received our Diamond Club numbers in the post. I can’t seem to create a diamond club account online to check my airmiles – it only lets existing users login? I have BA Exec accounts but can’t link to my Diamond club as it doesn’t have an account? Any help woul dbe greatly appreciated, thanks

    • You need to log-in with your email address on the new DC website. If there is a ‘password reset’ button then you could use that to get a new password sent to you. If that fails, you’ll need to use the ‘Contact Us’ form to get a password sent out.

      • Reset password won’t work as when mbna sets up the account they don’t add an e- mail address.

        I called diamond club and they allocated my e-mail address to the account which solves the problem.

        • The other option is to simply go into ba.com and use ‘Combine My Avios’ (under ‘Manage My Account’ when logged in). Select Diamond Club and it will show you the balance of your DC account – you don’t have to go ahead and do a transfer.