More on the HSBC Premier MasterCard, earning 1 Avios per £1

I ran a ‘breaking news’ piece yesterday on the changes to the HSBC Premier MasterCard.  Now its time to dig down a bit deeper.

The rewards scheme for the HSBC Premier credit card has generally been weak.  I have a HSBC Premier bank account from my days working there, and never, for a second, considered taking out a credit card!

HSBC Premier

This is not a totally radical move for HSBC Premier, since it has credit cards in other parts of the world which issue airline miles.  What surprises me, to be honest, is how it has negotiated with British Airways to award Avios points given its existing deals.  Obviously the contracts with Amex and Lloyds are not as tight as I imagined.

Historically, the HSBC Premier rewards scheme gave 1 point for every £5 spent.  This is still the case, with each point now being worth 5 airline miles.  (Do not be confused into thinking that £1 = 1 point = 5 miles – it doesn’t!)

Your points are awarded based on your TOTAL monthly spending, divided by 5.  It doesn’t matter if individual transactions are smaller than £5 or not – I confirmed this today with someone who has the card.  This is different to (and fairer than) the Tesco MasterCard, which gives 1 Clubcard point per £4 but PER TRANSACTION – so a £3.99 spend earns nothing and a £7.99 spend only 1 Clubcard point.

You can transfer your HSBC Premier points into the following airline schemes:

5 Avios per £5 point

5 Asia Miles (the Cathay Pacific scheme) per £5 point

5 Singapore Airlines KrisFlyer miles per £5 point

5 Etihad Guest miles per £5 point

The geographic base of these airlines is, perhaps not surprisingly, a good fit with HSBC’s main business focus these days.  Note the lack of any US partners.

Full details of the airline transfer scheme can be found here.

What is interesting is that the airline miles option is substantially better than their other rewards.

If you take shopping vouchers, for example, you only receive £5 to spend at Boots, Debenhams, M&S, B&Q, Amazon or Sainsbury for every £750 spent.  You are effectively buying Avios points for 0.66p each when you choose Avios over a shopping voucher, which is an excellent deal.

How does this compare to other non-Amex cards?

The main alternative Visa or MasterCard is the Tesco MasterCard.  This offers the equivalent of 0.6 Avios per £1 spent (ie 0.25 Clubcard points).

The HSBC Premier card is clearly better than this by a long way.  However, if you assume a 25% transfer bonus to Avios from Tesco every 18 months, then the difference shrinks sharply – 0.75 Avios per £1 from Tesco vs 1 Avios per £1 from HSBC.

Each route has upsides.  The HSBC Premier card would transfer the Avios each month, whilst with Tesco you’d have to wait for a conversion bonus to get full value.

On the other hand, Tesco has a wide range of alternative partners, and you retain the option of using your Clubcard vouchers for a different deal entirely if a good offer comes along.

Compared to the Lloyds Duo Avios cards, the HSBC Premier card knocks them into a hat.  You earn 500% more Avios than the Lloyds Duo MasterCard and 400% more Avios than the £50-fee Lloyds Premier Duo MasterCard!

Do I qualify for the HSBC Premier credit card?

See here and click on the Eligibility button to trigger a pop-up.

There is no minimum income.  However, to get the HSBC Premier MasterCard, you need a HSBC Premier current account into which you pay your salary.  You must ALSO have £50,000 invested with HSBC, either in a savings account or via an investment product.

Alternatively, if you earn over £100,000, you qualify if you just have a HSBC mortgage or any investment or insurance product.

What is the easiest way to trigger this?

You should note that the credit card is free, and HSBC Premier has a lot of other benefits which may be of value to you.  It comes with travel insurance for the under 70’s, for instance.

There is also NO FEE for a HSBC Premier current account as far as I know (I don’t pay one anyway!) so if you currently pay for a ‘packaged’ current account with another bank you may save money by moving across.

A 1 year fixed rate bond pays 1.4% on £50,000.  The best on the market from a ‘sensible’ institution appears to be 2% from Birmingham Midshires (ie Lloyds).  The gap is £600 of interest per year – £360 after tax – which is a high credit card fee!  This route does not seem to make much sense.

If you earn over £100,000, it is easier.  I’m not sure what the minimum investment is in an ‘investment product’ but I’m sure you could find something which would accept £1,000 or so.  They may even treat ISA’s or fixed rate bonds as ‘investment products’ – the definition is not clear online.

Conclusion

Clearly, this is not a product for everyone.  If you are high earner, though, you may want to take a look – especially as HSBC Premier, and HSBC in general, is well regarded compared to the service levels of the other big banks.

PS.  There is a refer-a-friend bonus for HSBC Premier.  You would receive £100 for being referred, and the person who refers you would receive £50.

Whilst I have a HSBC Premier account, my account is still tagged as ‘staff’ – even though I am not – and I imagine that I do not qualify as HSBC staff cannot receive the referral bonus.  If you were interested, I can can probably link you up with another HFP reader though – email raffles [at] headforpoints.co.uk and I’ll see what I can do.

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Comments

  1. I have a standard account with HSBC and they’ve tried to sell me the premier current account many times – I believe it does have a monthly fee, unless they changed it recently. Yours is probably free being a staff account…

    • I have a HSBC Premier Account and there’s no monthly fee

    • They could be pushing the Advance account wich has a fee and benefits such as travel insurance.

    • You only pay the fee if you stop qualifying under the Premier rules. There is no monthly fee if you still qualify.

      Also, a single, small income protection policy was enough to qualify for the wife and I (in addition to the salary requirement). I’ve found the service outstanding tbh. Nothing is ever too much trouble and their branch footprint is excellent and comes in very handy when something goes amiss, especially overseas. We definitely get looked after.

      This is a great enhancement to what was a pretty average program.

  2. So its
    A) 100k income PA plus an investment product.
    Or
    b) Transfer 50k to them plus your ongoing salary

    I don’t think their credit card application staff are going to be in-undated !

  3. olybeast says:

    If you earn 100k are you really bothered about a few avios?

    • £100k is about £60k after tax, of which at least half – more in London – would go on rent or mortgage.

      Two Club World tix to the US on holiday is still £4,000, even in a sale. That is still a massive chunk of your disposable income you’d want to avoid spending if you could.

      • Thywillbedone says:

        Totally agree. I only got into this game in Feb this year and have gone from 45k avios to about 145k (still a measly total by some standards) churning and generally playing the game. Helps that I usally incur £1k per month in work expenses. But it means I’ll be flying First instead of Economy on a long distance holiday next year to more or less where I choose. Would never spend hard cash on First notwithstanding my disposal income – note there is a difference between having the cash to pay for something and actually being able to afford it!

      • £30k a year in mortgage repayments?! That’s more than my take-home pay! .

        • You’d be shocked how far your money doesn’t go in London. I rent out my old flat in Wapping, which is hardly the most glamorous part of London, and that rents for about £28,000 per year, plus council tax etc. And that is just a one-bedder. You’d need to be on a £100k package to rent that.

          • I work in London, so I’m not that shocked really. But I wouldn’t expect someone on £100k a year to be thowing money away on rent – and especially not if they’re an avios collector! The type of people who enjoy this sort of money-saving hobby tend to apply the same principles to other areas of their life.

          • Rental yields in ‘smart’ parts of London are under 3% now. This means that £2,500 a month in rent lets you live in a £1 million property in Chelsea, South Kensington etc. Your £100,000 pa salary earner can afford the rent, but he can’t get a £1m mortgage.

            If you are a busy professional, other aspects of Avios come into play as well. The fact that flights can be cancelled for a full refund at up to 24 hours notice, for example, is hugely valuable if your job is unpredictable. What happens if you’ve spent £10,000 on Club World flights for your family but something comes up at work? Ever tried telling your boss you can get it done but he’ll owe you £10k compensation?!

            Fundamentally, the Avios game also requires a certain level of income to get the full benefit. Amex income requirements for the credit cards are faily high, especially Platinum. To be able to spend £10,000 on a BA Amex to trigger the 2-4-1 voucher requires a pretty high salary. And given that Club World taxes are still £500 per person, you still need to have cash to redeem, unless you want to go Aer Lingus / airberlin.

    • If you aren’t bothered about a (not insignificant number of) avios, you probably got your 100k job through your wealthy dad.

  4. “If you earn 100k are you really bothered about a few avios?”

    Every little bit helps!

  5. Happy to refer anyone if needed.

  6. I tiny bit off-topic, sorry, but you’ve mentioned the Tesco transfer bonus. I’ve now been waiting for a while and will eventually need to convert Clubcard points to Avios for a trip in the new year. Any thoughts on when the next bonus offer might pop up? Thanks!

  7. Interesting. Always nice to have some more star alliance options in the uk.
    A healthy welcome bonus would make it very interesting…

  8. Love your site Raffles, BTW. I also already have nigh-on 200,000 Avios, so transferring for another 50k of points doesn’t seem worth it (I have 58,000 MR points). So what would you advise the best value is for them? I am also Plat Ambassador and have 150,000 IC points!
    There’s a challenge for you…

    • Sit and wait. You never know when you may need a Hilton, Carlson or SPG hotel or to top off another airline account.

  9. I don’t think Amex Gold is worth the £125 fee after year 1 with the current benefits, agreed.

    For the first FREE year, though, I would keep it for the full 12 months. 2 points per £1 on supermarkets, petrol, travel and foreign spend can’t be beat.

    You would also get the 7,500 bonus points on your anniversary if you spend £15,000. Nothing to stop you cancelling after that and getting 90 per cent of your Year 2 fee refunded.

  10. By the way, forget ‘50,000 points gets £200 off your bill’. That is a daft redemption, compared to 50,000 Avios or Virgin miles, 100,000 Hilton points, 25,000 SPG points or 150,000 Club Carlson points. Or even £300 of train tickets via East Coast evouchers.

  11. Can you recommend any other non-Amex credit card which rewards Avios?

    Was thinking about getting a Tesco Mastercard but after reading that it only gives 1 Clubcard in multiples of £4, it doesn’t seem good value. In fact most of my non-Amex spending is under £4 anyway where I usually only buy a coffee and a sandwich or something from non-Amex accepting places such as Costa, Pret, etc.

  12. I had a few points hanging around on my Premier Card and converted them to Avios when you reported this a couple of days ago.

    They arrived in my BAEC account today, along with a 30% bonus. The description states 0% bonus but it is 30%.

    By the way, you can get a Premier Account if you are a director of a company which banks with HSBC.

  13. For HSBC premier with £49.99k it is cheaper to open a 5 yr bond, and break it with 90 days interest penalty after one year. This gets you a better interest rate than the one year bond on its own. It also offers you a chance to lock in rates for longer if rates drop, and if rates rise you can just break the bond with noting extra lost. Currently you can get 1.45% for 1yr done as a 5 year broken bond after 1 year, and get 1.4% done as a simple 1 year bond. There is not that much difference at the moment, but I did it back when interest rates were back at 3.5%, so slightly better.

    The Premier card also offers ‘extended warranty’. Although many cards offer this, only HSBC includes accidental damage to your product for 3 whole years. Especially for laptops this is exceptional value, as 3yr accidental damage standalone policy would cost £hundreds. (and you get avios!). Travel insurance is not great. Excludes about every existing condition.

  14. Barclays has an equivalent Premier customer tier for their personal banking with similar entry criteria. I wonder if they will follow suit with an avios Barclaycard in the UK. I generally find UK Barclaycards quite poor value with not many exciting rewards, but a direct competitor to the HSBC card could trigger some interesting products in the future!

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