As you read this I should be sitting on a beach in the Middle East. Last week, though, I was having a debate with myself about how to pay the hotel bill!
It’s not that I can’t afford it! (Although it will be around £5,000 I imagine.) I was more concerned with which credit card I should use to settle the bill! As I am sure that many of you have similar debates, I thought I would run through my thinking.
I wrote a long piece here on the best card to use for overseas spending. Frankly, I should probably have got myself a Saga or Post Office credit card with no foreign exchange fees, but I never have. My excuse is that I normally need holiday spend to ensure I can trigger 2 x British Airways American Express 2-4-1 vouchers across my card and my wifes each year.
This time, that’s not the case. Here is what my wife and I have in our wallets and what £5,000 of Dirham spend would get me:
American Express Platinum – would earn 5,000 Membership Rewards points. Good for 5,000 Avios or a variety of hotel schemes. I have a huge amount of Amex points so another 5,000 doesn’t mean much.
British Airways American Express Premium Plus – would earn 7,500 Avios. Normally, this would also count towards a 2-4-1 voucher (triggered at £10,000 spend) but I have already triggered both mine and my wifes this year. I have a huge pile of Avios so, again, another 7,500 doesn’t mean much.
Priority Club Black Visa – would earn 20,000 Priority Club points. The PC card earns 2 points per £1, but you get double points for foreign spend. This is worth about £100 of hotel stay – a night in a Holiday Inn or 40% of a night in a 5-star InterContinental.
More importantly, the PC Black Visa has a ‘free night certificate’ which is triggered when you spend £10,000 on the card. This would get me half of the way there. If I used that at the InterContinental in Paris, London or Cannes (not unlikely) I’d be getting at least £250 of value from the voucher.
We only have about 300,000 Priority Club points between us, so the points we would earn are more meaningful.
Lloyds TSB Premier Duo Avios Amex – would earn 12,500 Avios. The card normally earns 1.25 Avios per £1 but that is doubled for foreign spend. This card also has a 2-4-1 voucher (valid only on Economy flights) which requires £15,000 of spending, but I have already triggered that this year.
bmi Platinum Mastercard – would earn 10,000 Avios. I have the old-style version which pays 2 miles per £1.
House of Fraser Mastercard – a card my wife has. It is not bad, paying 1% cashback in House of Fraser vouchers. We would therefore get £50 if we used this card.
NatWest MasterCard – my wife has one of these, it pays out in useless YourPoints worth about 0.5p per £1 spent. I can’t even be bothered to work out how much I would get!
On the face of it, it seems to be a toss-up between the Lloyds TSB Premier Duo Avios card and the Priority Club Black Visa. Should I take 12,500 Avios points or 20,000 Priority Club points plus get half the way towards a free night voucher?
There is another snag as well. I booked the hotel through an Amex special deal, and I am meant to pay with an American Express card. If the hotel holds me to this (usually 50/50 chance in my experience) then I have to use the Lloyds TSB card anyway.
And there is a snag with the Priority Club card … I cannot be certain, given we have two little kids, that there will be a good opportunity to use the free night certificate when it is eventually triggered – although it is valid for a year.
I think, then, I have a plan:
a) Try to use the Priority Club Black Visa if I can (worth £225 of rewards – £100 for the 20,000 base points and £125 for 50% of a £250 free night on the voucher if I use it wisely), or
b) If I have to use an Amex, use my Lloyds TSB Premier Duo Amex and take the 12,500 Avios, worth at least £100
Note, of course, that if I did have a ‘no FX fees’ credit card then I would save £150 in fees on a £5,000 payment, so only with option a) am I actually better off.
Interesting post and sensible comparative values. I must admit that my foreign spend it goes on an Amex-issued card if in advance (to have Plat insurance cover), then PO Mastercatd for all spend when away – I find the 3% forex fee saving can rarely be beaten, esp as it is a fee-free card
Doesn’t the gold/plat Amex give double MR points on foreign spend? That would make it 10,000 MR points.
I think the Gold does but despite the higher fee the Plat only offers increased earning if they have a (rare) special promotion on – it’s pretty much always 1MR per GBP
with apparently “hugh amounts” of Amex and BA, it seems foolish to spent £5K on a hotel bill instead of eating a little bit into those hugh piles you have.
Technically true, but getting 0.58p per Avios or 0.5p via a Membership Rewards redemption is not great value!
agreed, but if your accrual rate continues to be more than your burn rate (which would be the implication of having hugh amounts in 2 different loyalty programmes), then you are spending cash when you don’t need to.
Fair point, except that my accrual rate of Avios was disproportionately boosted by the Lloyds card deal this year. I will easiy be a net burner now …. even just doing 1 Dubai and 1 Barbados holiday for 4 each year, with Barbados on 2 x241′s, needs 520k Avios per year …..
I tend to think that fee-free is the way to go for foreign spend. You get an effective 3% rewards rate, which is towards the top end of what you can get with a card, without any other catches.
Still loving my Aqua Reward card (3% CB and no FX), despite the small line (£500, now increased to £750 so moving in the right direction). It’s effectively a 6% rewards rate and the small limit is fine for restaurants etc. abroad.
You never know what you would get paying with Amex Gold, minimum would be 10,000 MRs, could end up being anything up to 25,000 in my experience.
I’d take MRs, they are convertible to so many programmes at acceptable exchange rates.
Hey Raffles,
As you mentioned the Priority club black visa, I thought I’d add this. I just received some marketing mail in the post. I am a priority club VISA holder and have been offered to upgrade to the black visa with the following benefits
a) Annual fee of £99 refunded (credited within 14 days)
b) Platinum elite status for as long as I hold the card (will dump after 1st year)
c) 20,000 bonus points. There is no mention of an initial spend to trigger the bonus so I assume it is bonus based on the upgrade only
It would be very rude not to upgrade so I did
Good move. Actually, given the Plat status, it may be worth £99 each year to keep the card. Let’s see if Plat benefits improve now it will be harder to achieve status.
Yeah strange thing was, I only received the mailing yesterday (perhaps due to xmas post) but the closing date is today. Didn’t give you very long to sign up.