What are the best credit card bonuses for LONG TERM spending?

(EDIT: This post was updated in August 2014 and is correct as of that date)

The majority of the credit card posts on Head for Points are focussed on exploiting sign-up bonuses.  Get a card, spend the minimum required to trigger the bonus, cancel the card, move on.  After a couple of years, you can re-apply for the first card you got and claim the bonus again – it is a virtuous circle!

However, if you are a high to medium spender then the few thousand pounds of card spend required each year to hit your sign-up bonus targets will not be a stretch.  You then need to consider where to put the rest of your spend.

In an effort to cut down on card churn, many issuers are now offering bribes for spending £10,000+ per year on their cards.  The value of these perks is often underestimated – they are often worth far more than the points for your normal spend.

In order of value, lets take a look at what is out there.  This analysis ignores the value of any sign-up bonus or ‘first year free’ deal – I am looking for the best long-term all-spend solution.

The results summary is (based on spending just enough to trigger the relevant long-term bonus):

  • BA Amex Premium Plus – 7.1% back on first £10,000
  • BA Amex – 4.5% back on first £20,000
  • Virgin Atlantic Black Amex & Visa – 3.1% back (if all Amex spend) on first £10,000
  • Lloyds Avios Rewards Amex & Visa – 2.7% (if all Amex spend) on first £7,000
  • IHG Rewards Club Black Visa – 2.5% back on first £10,000
  • Lloyds Avios Premier Rewards Amex & Visa – 2.4% (if all Amex spend) on first £12,000
  • Hilton HHonors Visa – 2.25% back on first £10,000
  • TSB Premier Amex & Visa – 1.6% back (if all Amex spend) on first £15,000
  • House of Fraser MasterCard – 1.0% back in House of Fraser vouchers on all spend

Our base comparisonThe House of Fraser MasterCard

This is the card against which I am comparing the others.  If a loyalty card can’t beat the best (pseudo) cashback card, you should take the cashback and book your flights and hotels directly!  Whilst the House of Fraser card does not pay you directly in cash, you receive 1% of your spend back in House of Fraser vouchers.

The winner - BA American Express Premium Plus card

This is not exactly a surprise.  Spend £10,000 on this card and you get a voucher which gives you 2 Avios redemptions (on BA planes, ex-UK only) for the miles of one.  On an average redemption (2 Club World tickets to San Francisco, say), this saves you 100,000 Avios points!

Based on my (very mean) 0.75p per Avios point valuation, the 2-4-1 is worth £750.  You also earn 15,000 Avios for spending that £10k (worth £110) with an annual fee of £150.  Net benefit for spending £10,000 = £710, or 7.1% of spend.

BA Amex - NEW

Runner-upBA American Express card

The standard, free, British Airways Amex gives you a 2-4-1 voucher when you spend £20,000, and a lower 1 mile per £1 on your spending.  Using the same maths as above, £20,000 of spend gets you £750 of 2-4-1 benefit plus 20,000 Avios for your £20,000 of spending, worth £150.  There is no fee.  The net benefit for spending £20,000 = £900 or 4.5% of spend.

However, it is important to note that I do not recommend that you get the free BA Amex if you intend to spend enough to trigger the 2-4-1 voucher.  You should focus on the British Airways Premium Plus Amex instead, not only for the higher earning rate but because the 2-4-1 vouchers lasts for two years instead of one.

Honourable mention, hotel categoryIHG Rewards Club Black Visa card - (unavailable until mid July 2014)

The premium version of the IHG Rewards Club card gives you a voucher when you spend £10,000 for a free night in ANY IHG Rewards Club property.  I am assuming you use this somewhere expensive, such as the InterContinental in London, Paris, Hong Kong, New York etc for a £250 room.  (I used mine at the InterContinental New York Times Square this year.)

In addition, you would have earned 20,000 points from your £10k of spend which I value at £100.  The card fee is £99.  Net benefit for spending £10,000 = £250 or 2.5% of spend.

Honourable mention, hotel categoryHilton HHonors Platinum Visa

This one really depends on your hotel stay pattern. Spend £10,000 on the card and you are given Hilton Gold staus for a year. Hilton Gold gets you free breakfast, free internet and a guaranteed upgrade, but this is still achievable for free via occasional promotions.  And, fundamentally, if you stay enough at Hilton properties to get real value from this then you probably stay enough to earn a Gold card.

Assuming that you and your partner spent 5 nights a year at a Hilton then the breakfast and internet benefits are worth £125+.  Add in £100 of value from the 20,000 Hilton points earned from your £10,000 spend and the £0 card fee, and you’d have a net benefit of £225 or 2.25% of spend.  This is VERY dependent on your Hilton stay pattern, though.

Honourable mention, airline categoryVirgin Atlantic Black Amex and Visa cards

The Virgin Black card comes with two benefits which may or may not work for you.  The one I do not value is the ‘free companion ticket’ voucher for spending £7,500.  This voucher is ONLY valid when the other person buys a full fare flight for cash.  It is therefore only beneficial to someone travelling on business on a fully flex ticket who wants to take their partner along.  Very few people will have the flexibility or lifestyle to do this.

The other benefit does have value.  For spending £5,000 you receive a voucher for an upgrade to Premium Economy when you book an Economy redemption flight.  A 2nd voucher comes at £10,000, which you would need if not travelling alone.

On a route such as UK-Los Angeles, the miles saving (based on the cost of Premium Economy versus Economy) would be 22,500 miles per ticket.  Assuming you can find availability (and Premium Economy is a small cabin), the value you get for £10,000 of spend is 45,000 miles which I value at £300.

You would also earn 20,000 Virgin miles for your £10,000 spend if it was on the Black Amex, worth £150.  The card fee is £140, so the net gain is £310 or 3.1% of your spend.

Honourable mention, airline categoryLloyds Avios Premier Rewards Avios Amex and MasterCard

This is a tricky one to value.  You earn 1.5 Avios per £1 on the Amex but only 0.3 Avios per £1 on the MasterCard, so your spending mix is key.

When you spend £12,000 across both cards, you receive a 2-4-1 voucher.  However, unlike the BA Amex voucher, this 2-4-1 voucher is only valid on economy redemptions, and is NOT refundable if you cancel your flights after booking.  It is also hard to value Avios when used for economy flights – they are almost worthless on long-haul flights due to the taxes, but Reward Saver flights can be an excellent deal.  The voucher can also be used on Eurostar and some other Avios partner airlines, but again only in economy.

I will assume you achieve the spend entirely on the Amex, and use the miles for a flight to Marrakech.  You would therefore save 20,000 Avios on the 2nd redemption, worth £150.

The Lloyds Avios Premier Rewards card also comes with an upgrade voucher when you spend £5,000.  This allows one person to upgrade a return Avios reward flight by one class.  I am assuming that the upgrade voucher is used to upgrade a World Traveller Plus ticket to New York to Club World, saving another 20,000 Avios.

You would earn 18,000 Avios, worth £135, for the £12k spend.

That means you will receive 40,000 bonus Avios (£300 value) plus 18,000 Avios for spending £12,000 on the American Express card, worth £135.  Deduct the £140 annual fee and the benefits are worth £295 on £12,000 of spending, or 2.4%.

Honourable mention, airline category - Lloyds Avios Rewards Avios Amex and MasterCard

The ‘other’ Lloyds card does not come with a 2-4-1 voucher, but you will still receive the upgrade voucher.  You earn 1.25 Avios per £1 on the Amex but only 0.25 Avios per £1 on the MasterCard, so your spending mix is key.

The basic Lloyds card requires a higher £7,000 spend to trigger the upgrade voucher.  This allows one person to upgrade a return Avios reward flight by one class.  I am assuming that the upgrade voucher is used to upgrade a World Traveller Plus ticket to New York to Club World, saving 20,000 Avios.

You would earn 8,750 Avios, worth £65, for the £7,000 spend.

That means you will receive 20,000 Avios of value from the upgrade (£150 value) plus £65 of Avios for spending £7,000 on the American Express card.  Deduct the £24 annual fee and the benefits are worth £191 on £7,000 of spending, or 2.7%.

Of value only to heavy spenders on non-Amex cardsTSB Premier Avios Amex and MasterCard

This offers an identical 2-4-1 voucher to the Lloyds card above, but is triggered at £15,000 rather than £12,000.  You earn 1.25 Avios per £1 on the Amex but only 0.25 Avios per £1 on the MasterCard.

I am assuming that the 2-4-1 voucher saves you 20,000 Avios (same calculation as per the Lloyds card).  You would earn 18,750 Avios, worth £140, for the £15k spend on the Amex.  Netting off the card fee, the net benefit for spending £15,000 is £240 or 1.6% of spend. This is not great.

(Note that there is a work around which allows you to use the TSB voucher to travel out in Economy and back in a higher class.  If you book via the general avios.com interface, and not via the link in the voucher, you can book an ‘Economy out, other back’ ticket. At the end of the process, it will ask if you want to use your voucher.  Say ‘yes’ and it will ticket OK.)

If all the spend went on the MasterCard, your return on £15,000 would be 3,750 Avios (worth £28) plus £150 for the voucher, so £178 of value less £50 fee.  This is a very poor 0.86% of spend – you are better off with the House of Fraser MasterCard.

Other contenders disqualified at the group stage:

Starwood Amex – upgrade to SPG Gold status for spending £15,000 and free weekend night for spending £25,000.  This is a poor deal considering that SPG Gold has only modest benefits and is often available for free, eg as an Amex Platinum benefit.  The free weekend night is valid only at Category 1-4 hotels, which limits its use considerably, and is a poor reward for such massive expenditure.

Virgin Atlantic White Amex & MasterCard – free economy to PE upgrade for spending £10,000 and companion ticket for spending £15,000.  The high spend level required is not worth the modest value of the rewards.  The ‘Economy to Premium Economy’ upgrade voucher on a redemption IS good, but you’re better off getting the Black card which gives two upgrade vouchers for spending £10,000 (and one for spending £5,000).

Ryanair MasterCard – up to 4 free flights when you spend £3,000 per year.  The value of the free flights is modest given that taxes etc must still be paid and these make up the bulk of Ryanair fares in most cases.

American Express Preferred Rewards Gold – 7,500 Membership Rewards points when you spend £15,000, paid when you next renew.  I would value the 7,500 points at £75, and you need to commit to paying your £125 renewal fee (admittedly pro-rata refundable on cancelling) for the next year to trigger it.  Unless you value the Lounge Club vouchers that also come with renewal, this is not a fantastic deal.

Emirates Skywards Elite Amex & Visa – free companion ticket when you spend £10,000.  However, you need to buy a full-fare ticket to receive your companion ticket, and even then there must be reward availability on the flight.  This will be almost impossible for most people to use.

I am happy to hear arguments for and against my views here – many of these rewards are subjectively valued, dependant on your travel patterns.  There is also, I know, a lot of info in this post so please do post below if you want anything clarifying – you are probably not alone!

(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.)

No Tesco / Avios conversion bonus ... but a competition instead!
5,000 mile sign-up bonus in MilleMiglia, 'the world's worst FF programme', worth €25 off an Alitalia flight
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Comments

  1. Paul Ingles says:

    Don’t forget the HSBC Premier Credit Card- I just had a mailshot confirming the £1 = 1 avios transfer you’d mentioned earlier; pretty good considering its a fee free MasterCard.

    Everything I have goes on either my BAPP or PRG (depending on category- I’m still in the 1st year for the PRG) and then everything else goes on the Premier MasterCard.

    I’m not sure which other partners HSBC offer but the Avios redemption seems about the best non-Amex you can get.

    • Yes, agreed. I am playing down the HSBC card on HFP though (although it is on the main cards page and I will do a full review next time I update those) because of the stiff qualifying criteria. Don’t want to keep banging on about a card that 90 per cent of the readers cannot get.

  2. On a tangent: as a Masters student as well as a business owner and Avios milion miler, my NUS student card gets 5% off a large part of the Amazon range, as well as 20% discounts in stores as high brow as Ted Baker or A|X.

    Add in the 10% off all spend in Cooperative supermarkets, and the canny shopper with expensive tastes in clothes and a high food bill might find paying for a part-time distance learning course a good investment, just to get the NUS card.

  3. “”Add in the 10% off all spend in Cooperative supermarkets,””

    Does the 10% off include Gift Cards.

    • Just imagine! Sadly not:

      “10% off food, drink, household products, newspapers and magazines, confectionary and flowers, exclusive to NUS extra cardholders.”

  4. 1) Regarding the BA 241 via BA Amex Plat. If I spend £10k on something refundanble; get the voucher, then cancel the purchase – is the voucher still mine to keep?

    2) Whats the cheapest way to get the NUS card?

    • “In order to purchase the NUS extra Card you must be aged 16 or over and be in part or full time education. Certain exceptions apply.”

      See how far you’d get applying here https://cards.nusextra.co.uk/. I can’t remember if you require an email address with an academic institutions – I think there are two sorts of card, an ISIC (which has full international recognition) and an NUS Extra card (UK only). The latter may not require anything academic, but you might want to sign up to do a night class (?!).

      It’s great being a student. Cheaper cinema tickets, student railcard etc, 20% off that expensive suit. But it’s best if you use it only if you a student. “NUS reserves the right to cancel any card where incorrect or fraudulent information is provided. In the event that information is found to be incorrect, you shall not be entitled to a refund.”

      Although how they can withdraw a card which someone is using fraudulently… who knows?

    • Yes, the vouchers do not get withdrawn

      • Is it worth doing that, though? I imagine Amex would take a dim view of this, and Amex are very much our allies in the hunt for avios. I actually talk through with them whenever I’m changing/adding/canceling cards to make sure that what I’m up to does not cause offense.

  5. Back on the subject of sign up bonuses, for the IHG card the link on HFP to the 40,000 sign up bonus points was still working a couple of months ago when I joined, combine that with some spend on the Big Win promotion and its easy to quickly accumulate well over 100k in points.

    On the BA redemption, I have been a bit more ambitious and aiming to use it at the max value I can get out of it – a First class redemption to SIN, this is 210,000 avios (£1575 value), you could also value at it the cash price – in this case that could be approx. £4000 per ticket after tax.

    • Glad the 40k link worked. I have left it on the cards page even though it is getting on for a year old.

      • Damn – I forgot all about that and applied with a 30,000 signup bonus a week or so back!

      • Chris1922 says:

        Can I just sign up for this, then transfer my Priority Club points to my BA Avios account ? 8000 Avios for £99 sounds like a good deal.

        • Yes, works fine. However, 40,000 IHG points also gets you 80% of an InterContinental hotel night (worth £250 in many places) or 2 x Holiday Inn nights in a lot of places. That would be worth more than 8,000 Avios ….

          • Do you get the 30/49k bonus for signing up if you already have the existing ihg card?

            I am about to expire on platinum and move to gold but I received an email saying I needed to make 2 nights stay to keep gold as well, so I believe there could be a minimum number of nights stay required to have the benefit from the credit card,

            • You mean if you upgrade from the free card? Probably not, I reckon you’d need to cancel and wait a few months – and even then there is no guarantee that Barclays would give a 2nd bonus.

              I wouldn’t worry about that email about retaining Gold, I reckon it is an automated thing.

        • Also by signing up to this card you will get Platinum status with IHG, if you look back at previous Raffles posts you will find a big list of promo codes the biggest bonuses being for Platinum members, on my very first hotel stay with Platinum status I received 38,000 points, this is before any Big Win points.

          So in some ways this card has been my favourite as I am on track to have enough points to stay at the IC Hong Kong (45,000 per night) on a forthcoming trip which would otherwise have cost over £250/night.

    • OT – just got 22000 IHG points for my first big win stay (cost: £55) using the 4-digit codes. The big win points haven’t even posted yet.

  6. ankomonkey says:

    Anyone know the length of time you have to use the Virgin Black upgrade vouchers?

  7. Nesburrito says:

    Thanks for all the work on this, Raffles! I caught the collection bug last year and already enjoyed my first two flights in club due in no small part to you!

    As a solo traveller, I find it hard to sort out what would be the best for me as I have absolutely no use for the 2-4-1 vouchers (yes in theory I could take friends but they all have families). Any suggestions for long term spending for leisure travellers who do all of their travel solo?

    • Hi

      That is a really good point, and there is a lot I could write about it. I will do a special post on this late next week, once I’m back in the UK.

      • I’m in the same position and would be interested in the post as well, it looks to me for a solo traveller the Virgin cards might be the best.

        I’m in my first year of having a Gold Card and thanks to finding over 300 3V cards I should hit the £15,000 a year spend, once I get the bonus points I’ll transfer them to Avios and cancel the card.

        On the subject of posts I’d like to read about I’d be really interested in your opinion of booking hotels via Hotels.com (with their effect 20% off thanks to cashback & welcome rewards) vs booking the hotel directly and getting the points.

        • Another post I keep meaning to write ….!

          I know some people who by swear by this route and avoid hotel status.

          Not really possible for the business traveller who gets his hotels booked via an agent, though.

    • if you have a friend with a wife and one child, you could both get 241s and then all fly together (you don’t have to spend the rest of the holiday with the friend/family)

  8. what about tesco clubcard credit card?

    • I only looked at cards which offer a specific bonus for spending £x,000, which the Tesco card doesn’t. I do like the Tesco card though, and it remains the best Avios-earning Visa / MasterCard for people who cannot obtain the HSBC Premier card (ie most people).

  9. Thanks for this Raffles – once again very useful.

    I am trying to work out if I should spend £10k on a BAPP for a companion voucher or spend £10k on Virgin Black for 2 upgrade vouchers.
    Would like to get flights to Vegas in PE and by using tesco vouchers would have points for either Virgin or BA.
    The only differences I can see are that BA taxes are slightly higher but we would need 10,000 less points.
    Virgin Economy 42,500 X2 pax then use 2 vouchers to upgrade to PE;
    BA WT+ 75,000 for 1 then use companion voucher.

    • Thunderbirds says:

      Remember that spend of £10k gives 15k Avios but 20k Flying Points. Also when you pay your taxes you get x3 on BAPP and x4 on Virgin AMEX. These differences should make up the 10k extra points needed for Virgin. Then it is simply a matter of which airline you prefer!
      I’m saving in both and am trying to schedule a trip to Boston on Virgin next year. I haven’t flown on them for at least 10 years so I’m looking forward to it.
      If you get the two Virgin E to PE upgrades you will also have the companion voucher which may be of value if you buying tickets outside of a sale, otherwise not much value.

  10. Andrew (@andrewseftel) says:

    Just launched today: Luma Cashback MasterCard (issued by Capital One). 4% long-term cashback on Supermarkets and Petrol. Monthly cashback is capped at £225 spend/£9 cashback. It’s subprime-targeted, so probably £1k lines for most guys here and 35.9% APR. Cashback paid out each January.

    http://www.luma.co.uk/cashback-credit-card/

    • Thats certainly an interesting one Andrew. Looks a good option for the first £225 of spending on fuel/groceries each month, especially as I often spend about double that by buying Visa gift cards (unfortunately not 3v) in Tesco to trigger money off coupons that they love sending me (£13 off £90 spend etc)

      • Is there a certain way to trigger money off coupons at Tesco? If so, please can you describe how to get maximum benefit.

        • I meant trigger as in buying the gift cards so that my spend is over £90 so that I can use the coupons, but I have no idea why they get sent to me in the first place. Possibly a demographic or geographic group that I fall in to.

  11. Hi Raffles, how do you believe the winning card mentioned stacks up against using a Tesco credit card for a 10K spend (assume all in Tesco) and converting clubcard points into Avios/Virgin miles?

    • No comparison. £10,000 on a BA Premium Plus Amex gets you 15,000 Avios plus a 2-4-1 voucher which could save you 100,000+ Avios.

      £10,000 on a Tesco MasterCard (whether you use it in Tesco or anywhere else) earns you 6,000 Avios and nothing else.

      (Don’t be fooled by Tesco when they advertise ‘use your Tesco credit card in Tesco and get 5 points per £4 spent. What they mean is that you earn the USUAL 4 points per £4 spent, plus an extra 1 per £4 via the credit card. You do NOT earn a higher rate on the Tesco credit card for Tesco spending, except when you buy petrol at a Tesco garage.)

  12. I think you’ve been a bit harsh on the Amex Preferred Rewards Gold Card. When evaluating the BA Premium Plus Amex you counted the base miles (15,000) that you earn from the spend to trigger the voucher, but you didn’t do the same with the Gold Card. Spending £15,000 per year on this card nets you at least 22,500 MR points. Deduct 12,500 for the £125 fee and, assuming 1p per Avios, you’re still getting £100 worth of points for a £15,000 spend. Not great, but if you have a lot of travel and forex spend then you get double miles for that. If you can manage the full £15,000 in travel spend you’re getting £250 back for £15,000, and that’s without counting the fact that you sometimes get triple or even quadruple points for no obvious reason.

    • It’s the last sentence that keeps me hooked on my gold amex. I love it. I assumed that the multiple points thing just worked in the first year, but does it happen on older cards too? I just use mine for petrol, foreign spend and supermarkets, and I average 3 points per pound.

  13. Lost Antipod says:

    Nice work Raffles – and I’m quietly rejoicing that I reached the same conclusions as you. (Yes, I admit it, I have a nerdy spreadsheet for comparing card offers to see if I should switch… it was, for example, easy for me to see the much-touted Santander 123 Cashback card just doesn’t cut it in terms of rewards – in my case, at least.)

    Using the BA PP Amex, my wife and I are getting a F redemption to Asia every year (and in the past, CW to SYD) so the value of this perk is immense.

    One other small tip – I’ve kept a Lufthansa Miles & More Visa card for years now. While I focus my air travel on adding to my Avios balance, there are times when I need to fly Star Alliance – but it is infrequent, so my M&M balance is at risk of expiry if I don’t pay attention. Thus I have a small monthly recurring debit on the M&M Visa, which keeps those miles alive without me thinking about it. One day in the future all those odd trips on *A will add up to another nice mileage redemption.

  14. Can you churn the Hilton visa? I closed my one 8 months ago after using the free night, can I apply again and get another free night after meeting the target spend?

    Thanks

    • Barclays are not known for letting you churn. I certainly think they’d want a 1-2 year gap before letting you reapply and take the bonus, but that is purely gut feeling.

    • Yes, I did this after about 8 months, however I find the stumbling block is trying to get the application approved in the first place – they seem very picky about who they take and I’m suspicious a good credit history actually counts against you!