I have just finished writing a post on the British Airways American Express 2-4-1 voucher, which will run in a couple of weeks as part of the ‘Avios Redemption University’ series.
Whilst writing it, I came to a conclusion that (when you think about) should be obvious but which many, many people in the UK don’t realise. And that is:
In my mind, it is pointless having the basic, free BA Amex if you plan to earn a 2-4-1 voucher!
Before I explain why, let’s remind ourselves of the rules on each of the two BA Amex cards:
The BA American Express card has no fee, earns 1 mile per £1 spent and generates a 2-4-1 voucher each year when you spend £20,000. The voucher lasts for 1 year.
The BA Premium Plus American Express has a £150 annual fee, earns 1.5 miles per £1 spent (3x on BA flights) and generates a 2-4-1 voucher each year when you spend £10,000. The voucher lasts for 2 years.
So, why is the 2-4-1 voucher via the free BA Amex card such a bad idea?
Well, for a start, triggering the voucher means spending £20,000 on the free BA Amex. This leads to our first key point:
If you are spending £20,000 on the card, you’d earn 10,000 extra Avios by spending the same £20,000 on the Premium Plus card, because of the higher earnings rate of 1.5 Avios per £1 compared to 1 Avios! The Premium Plus also offers double miles when you book BA flights on the card. That alone is almost enough reason to pay the £150 fee.
However, even that is not the most effective solution.
Assuming you can manage £20,000 of American Express spend in a year, I STILL wouldn’t put it all on the BA Premium Plus card either! There are two better alternatives:
a) Get the Premium Plus card and just spend the necessary £10,000 on it. You can then use the additional annual spending to open more credit cards and meet the spending target required to trigger their bonuses.
or
b) If you have a partner, get them their own BA Premium Plus Amex and get yourself a supplementary card on that account. You could then spend £10,000 on each card (your own card, then the supplementary card on your partners account) and earn TWO 2-4-1 vouchers each year.
And there’s more ….
It is also worth remembering that the one-year expiry on the voucher on the free card is very inconvenient. I have just booked some flights to Dubai for next Christmas. It would have been virtually impossible to use the voucher from the free BA Amex for these flights, as I booked the full 355 days ahead (as you must, for Christmas flights) and the outbound flight must be taken within 1 year of the date the voucher is issued.
So, taking into account:
- The need to spend £20,000 instead of £10,000
- The 10,000 extra Avios ‘lost’ on £20,000 of spend on the free card
- The lost ability to use spend above £10,000 to meet sign-up bonuses on other Amex cards like the SPG Amex
- The inflexibility of just having one year to spend the 2-4-1 voucher
…. you really have to wonder if there is ANY point at all to earning a 2-4-1 voucher with the free BA Amex card!
I am NOT saying that the free BA Amex is useless! You get a decent sign-up bonus (during a promotion) and the Avios earnings rate per £1 is not beaten by any other free card. (Although note that the Amex Gold gives a higher bonus and earns 2 Avios per £1 on supermarket, travel, petrol and foreign spend for the first year, and is also fee-free in Year 1. The Lloyds Amex also offers 1 Avios per £1 but gives double miles on foreign spend.)
For someone who spends under £10,000 a year on their Amex, it is a sensible option. Anyone who spends £20,000 a year on it, though, needs to think again.
If you add supplementary cardholder do they earn a 241 voucher, or is it just one per account?
Just one per account
Does the free card definitely give 3x on BA flights? The American Express sign up page only mentions the 3x on BA flights for the Premium Plus Card.
Some people have commented on Flyertalk that if you upgrade from the BA basic Amex to the Premium part way through the membership year your spend to date is transferred to the new card. So if you had £9500 spend in 10 months you could trigger the voucher by paying the card fee of £150 and spending just £500 more (£10000 total).
Sounds too good to be true. Anyone know if it is true?
I understand this to be true, yes
I have just done that, thechiefexecutive. I was unsure that I’d manage £10000 this year (for various reasons), so I didn’t want to pay £150 for the card. When I saw that I am about £1k shy of the goal, I called and asked to upgrade to the Premium Plus card, because they told me that my spend at the moment will be applied towards the companion voucher (241).
I have a premium plus card paid my £150 in September.
I triggered my 241 in December and have now down graded to a normal card (no fee) ..I should receive a pro rata refund for the initial fee of the card..
So can anyone tell me if I have 2 years of 1 year to use the voucher?
Thanks
Good question. Easy way to find out, log in to your BAEC account, look at the voucher and tell us!
I did this about 18 months back and the voucher I’d earned on the PP card survived the downgrade to a normal card with the same validity – actually, I’m not sure that it had occurred to me that it might not. I’ve since made a booking with the voucher, and cancelled the card which doesn’t seem to have caused any problems either. No guarantees that anyone else will get the same outcome, of course.
There is risk associated with cancelling the card, as they say you need to present the card at checkin. I never have had to though.
Since when did you need to return a card when cancelling it? You probably should cut it up, but you don’t have to.
It is not a deal breaker if you don’t have the card. It is sometimes requested before a check-in machine will print a boardig pass, but if you do that from home its not a problem. They won’t ask to see a card at bag drop. On the occasion when a check-in machine asked for my card and I didn’t have it, I got the boarding pass from a desk by showing my passport and another bank card as a 2nd piece of ID.
I have one 2 occasions been asked to present the card I made my booking with at bag drop
Good thinking…
As it stands at the moment, it is still giving me the 2 year expiry date, but I have only just changed my account over…watch this space!
We have about a million Avios from BMI and the LLoyds TSB promo.
Still haven’t got any BA card yet since I cannot really find much use for the 241. Most places I want to go would need me to fly with airlines other than BA – sometimes because of availability, but also because of connections, or to avoid UK APD.
So straight points are best, with max flexibility.
Even living in Scotland, reward flight savers are often pants because you can fly direct with the lo-cos and avoid the 99.8% capacity hell-hole that LHR is. Sorry, LHR on a bad day – and I like taking holidays when the weather is bad in UK! – is worse that Ryanair – and that is saying something!
If you have a million miles, with a 241 voucher you could fly in first to Australia for around £500 each and use the 241 with a value of 300k avios. That’s a cash value of over 2k for the 241, so for you it is a great deal! Given that the flights cost almost 15k and you would be paying a grand and still have 700k avios left, you are in a great place.
I agree, Mr Tibbs, except I cannot get BA availability! So if I go with Cathay, my 241 is worthless!!
Now with the late lamented BMI, I could go Thai almost any time.
And the costs are £800 each:
Australian Int’l Passenger Service Charge (WY) £17.40
Singapore Passenger Service Charge (SG) £9.20
Singapore Passenger Security Service Charge (OO) £3.00
(YQ) £494.00
United Kingdom Air Passengers Duty (GB) £188.00
United Kingdom Passenger Service Charge (UB) £39.75
Australian Passenger Movement Charge (AU) £36.30
Australian Int’l Passenger Service Charge (WY) £17.40
I think a purpose for this card is referral to a spouse for two sets of bonus points, in a scenario where you know you won’t spend 2x £10k in the year, and don’t want to pay the fee. I might do this later this year if a decent referral bonus crops up.
As a holder of more than a half million Avios, I am becoming increasingly sceptical about the value of BA frequent flier points at all. Even using the yearly two-for-one vouchers, we are hit by enormous taxes on redemptions that make the Avios considerably less attractive than those of our domestic (US) frequent flier accounts.
I believe the taxes on US domestic redemptions with avios are pretty low, could you perhaps not use your avios to fly around in the states (or Australia!), and save your US FF points for the international legs where the BA or CX taxes are higher?
(Gulp!) There’s another Roger? Could be confusing for Raffles.
BTW, I have a couple of million Avios. That’s the problem with blogs. There’s always the risk of someone saying ‘mine’s bigger than yours’.
One thing you learn on Flyertalk – There is ALWAYS someone who has more miles, has spent more time in a place, knows more about a seat layout, knows more about an award chart than you do. It keeps you humble!
I wonder how long it will take Martin Lewis of money saving expert fame to read this and update his pages with this “discovery”. Or is he too tight to spend £150 for the added benefits?
For those who don’t know he made a big thing about using a 2-4-1 on the LCY-JFK route a while go that he got with the free card..
Personally I knew I was going to spend £20,000 this year easily already have enough avios for maximum distance. With the devaluing of avios (i.e. paying for taxes) the extra spend of £150 to gain 10,000 extra avios really wasn’t worth it for me. 10,000 avios doesn’t get you too far (maybe Europe) and you can buy a flight for around that anyway. Also when I signed up I’m sure the APR was extortionate on the £10k spend card in comparison to the other (around 50% compared to 18%), which is important if for one month you can’t clear the balance.
The real interest rate – i.e. what you pay if you don’t settle in full each month – is likely to be the same on both cards.
Banks are compelled to include the annual fee in their calculations of likely interest due on a relatively small sum and this accounts for what looks like a huge APR on the fee-paying card.
Correct. The APR has to include the fee, based on borrowing £x for y months. The underlying APR is the same, give or take.