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Credit Card Reviews 2013 (19): Virgin Flying Club Black American Express and Visa

(This post was updated in April 2014 and all the information is still correct.)

This is the 19th (and last!) of my series of posts looking at the major UK loyalty credit cards and discussing whether of not they are worth applying for. These posts will be linked to the relevant sections of the ‘Credit Cards Update‘ page. My other UK airline and hotel credit card reviews can be found here.

Link:  Virgin Atlantic Black cards official page

About the card

The Virgin Atlantic Black credit cards – issued by MBNA (Bank of America) – come as a double-pack of an American Express and a Visa card. This has become a trend in recent years, with card issuers wanting to benefit from Amex’s higher merchant fees whilst at the same time not wanting to put off anyone who is concerned about limited Amex acceptance.

MBNA also issues the United, American Airlines and Lufthansa credit cards, amongst others. This may impact your ability to get the Virgin card if you already hold an existing MBNA product.

What is the sign-up bonus?

The current bonus is an impressive 30,000 Virgin miles.  This is as high as it has ever been, and this offer is only available until 30 June 2014.

After that, I would expect it to drop back to the usual 6,000 miles.

Any other benefits?

Yes. The Virgin credit cards, both free and paid, come with two interesting bonuses:

When you spend £5,000 on the Black American Express card, you will receive an upgrade to Premium Economy (for one person) when you redeem your Flying Club miles for an Economy class redemption. A 2nd voucher is available when you spend £10,000.  These vouchers are issued at the END of your card year, not when you pass the spend target.

Spend £7,500 on the Black American Express card and you will receive a free ticket for a companion (taxes apply) when you purchase a full fare cash flight.  This voucher is issued as soon as you pass the spend threshold.

As I wrote yesterday about the White card, these offers are less interesting than you think. The Premium Economy upgrade is OK, but only covers one person per voucher. The free companion ticket is fundamentally useless, since very few people buy full fare cash tickets.

Note, too, that Visa spend does not count towards the vouchers.

Holders of the Black card also receive free Regus Businessworld Gold membership. I rate Regus Businessworld Gold very highly, although there are other ways of getting a Gold card for free without spending the £140 annual fee required via this card.

Virgin Black

Is there an annual fee?

Yes, £140 per year.

What do I earn per £1 spent on the card?

The earnings rate on the cards is excellent.

You earn 2 miles per £1 spent on the Amex card and 1 miles on the Visa. This is an excellent return – there are no Avios cards which reward you so well, even the paid ones.

Bookings with Virgin Atlantic or Virgin Holidays earn double miles. However, the Virgin Atlantic website charges a whopping 1.5% fee with no cap for using credit cards, and this is NOT waived when using the Virgin card – although you may find that earning 4 miles per £1 outweighs the 1.5% charge.

What is a Virgin Flying Club mile worth?

I covered this in my review of the White card yesterday.

To recap: Virgin has a lot of partners now. You can earn miles by converting Tesco Clubcard points as well as Heathrow Rewards and American Express Membership Rewards points. Even if you never fly with Virgin, you could easily top up your credit miles with Tesco points to reach enough for an award. They also have particularly good earning rates with Hertz.  There is also this on-going deal for 5,000 miles for opening a Virgin Money ISA.

The launch of Little Red domestic services has also made small number of miles more useful. A return flight to London from Manchester, Aberdeen or Edinburgh is just 7,500 miles plus £35 of taxes.

As with BA, long haul economy redemptions are often poor value due to the taxes and fuel surcharges.  However, Virgin has recently reduced its taxes on economy redemptions and they are now up to £120 per person lower than BA would charge.  Long-haul premium cabin redemptions are in line with BA in terms of mileage and taxes.

You can also transfer Virgin miles to Hilton HHonors at a 1 : 1.5 ratio, which puts a floor under their value.  You can also transfer to IHG Rewards Club at 1 : 1.

I would therefore be happy to value Virgin miles at 0.75p – 1p each, in line with Avios.

How does this compare to a cashback credit card?

There are currently no cashback cards on the market which offer a) a MasterCard or Visa, b) no annual fee and c) unlimited cashback. The best ‘pseudo cashback’ card is probably the Amazon MasterCard, which offers 1% of your spending back in Amazon vouchers.

Whilst this card does carry an annual fee, the earnings rate is still excellent. Even on the Visa card, 1 mile per £1 offers a decent return if you use the miles wisely.

The Head for Points Verdict:

Score for the sign-up bonus – 9/10.  30,000 miles is a great deal, even with the £140 fee.  However, remember that (unlike an Amex-issued card) you cannot get a partial refund of your annual fee if you cancel during the year.

Score for on-going earning – 10/10 on the Amex, 8/10 on the Visa. These are outstanding earnings rates. No other card (except for ones no longer available to new applicants) earns 2 airline miles per £1. There are also no other Visa cards offering 1 mile per £1, although even at that level it is not hugely better value than the 1% cashback on the Amazon MasterCard.

(Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.)

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Comments

  1. Thunderbirds says:

    I have these cards (I also use BA AMEX and AMEX Gold) with two supplementary card holders and I agree the earning rate is fantastic. Combine this with the fact that the Virgin Flying Club miles requirement tends to be lower than the Avios equivalent for the same route and the cards become a worthwhile option.
    Having both AMEX and Visa on the same account is also convenient and I use this VISA in preference to my Tesco MasterCard.
    I think you have made a mistake on the thresholds for Economy reward upgrade to Premium Economy. These are triggered after £5k spending and the second voucher at £10K spending.
    Clearly the main argument against these cards from an airline travel perspective is the much reduced route network when compared to BA. However for the leisure traveller the main destinations are covered. The other point worth mentioning is that the companion ticket (the virtually worthless one) turns up when you trigger the earnings threshold however the two upgrades (the useful ones) don’t arrive until after the end of your card year which is a pain as I was planning a trip to Washington DC and had to switch to BA Avios.
    Of course the main issue you don’t cover when making a decision on these cards is whether the Virgin experience is better than the BA equivalent. I’ve was hoping to have tried both BA and Virgin Premium economy by now but I’m still waiting for my upgrades before trying Virgin!

  2. Squire says:

    The question for me is are Virgin Miles actually worth having?

    Are there any ways to redeem miles without massive taxes and fuel surcharges? Answers on a postcard please

    • My understanding was that, similar to BA, the best value it in paying for premium economy and using miles to upgrade to business (Upper Class on Virgin, Club World on BA). Assuming VS do the same as BA and you still earn on the underlying PE fare then it makes the upgrade relatively cheap in miles terms.

    • You can transfer to Hilton at 1:2!

      The UK regional flights are a good deal at 7500 miles and £30 tax, return.

      Virgin has a number of airline partners you can check. They are all in slightly odd parts of the world, few of whom fly from London, but of course if you happen to be travelling there then you are sorted! Not sure which partners incur fuel surcharges.

  3. KeithS says:

    A couple of points to bear in mind:-

    Unlike BA, on VS you can upgrade using miles from Y (Economy) to J (Upper) as long as you are in an upgradable fare class. I believe BA will only allow you to upgrade 1 fare class.

    Also, the Companion ticket in most situations is useless, but I managed to use them regularly in the past using the S class fare in P/E. We travelled to MCO a lot and at least tice a year I would get the following (as Mrs K also had her own card):-
    4 P/E seats each trip, made up of 2 upgrades and 1 free companion flight. So I was paying for 1 ‘S’ ticket and 2 Economy reward tickets.

    Hope this helps

    • Thunderbirds says:

      Keith
      Did you have to ring in to Virgin to find quotes for the S return fares? The web-site seems to offer S outbound and H inbound which doesn’t qualify.

      • keiths says:

        Always needed a call, as they would then link up the bookings.

        I think you can book on line if you look Flying Club / Spend Miles / Upgrade – Companion Flight.

        I believe you can book S Class flights there

        • Thunderbirds says:

          Ah yes thanks, I missed the drop down box where you can specifically ask for a specific fare type. That makes planning much easier!

  4. Yes, sorry, corrected.

    There was an element of ‘cut and paste’ from the review of the White card, and this error slipped through!

  5. A side question – how do you get Regus Gold for free?