Comparing the two best options for a ‘no FX fees’ credit card

The Lloyds Avios Rewards credit card (representative APR 23.7% variable, including the £24 fee) was a game-changer when it launched in October 2013.  For the first time, we had a credit card which offered NO FOREIGN EXCHANGE FEE – AND gave you Avios points for your spending as well.

Historically, it was almost always a bad idea to use a mileage card for overseas spend.  This is because all other miles and points cards – and indeed almost all other UK credit and debit cards – charge a foreign exchange fee of 2.99%.

I want to use this post to compare the Lloyds Avios Rewards card with the The Post Office Money Platinum Credit Card (representative APR 17.8% variable, issued by Bank of Ireland UK).  This is one of the few free credit cards to charge no foreign exchange fees on purchases.

How do the two cards compare?

 The Post Office Money Platinum Credit Card stacks up like this:

no annual fee

0% charge on foreign purchases

2.5% fee (min £3) when you withdraw cash abroad

no rewards programme

no sign-up bonus

comes as a Mastercard

The Lloyds Avios Rewards credit card stacks up like this:

£24 annual fee

0% charge on foreign purchases

3% fee when you withdraw cash abroad

1.25 Avios per £1 spent on the American Express card and 0.25 Avios per £1 spent on the Mastercard

4,500 Avios points sign-up bonus if you are referred by fellow cardholder – email me at rob at headforpoints.com if you would like a referral link

comes as a double pack of American Express and Mastercard

Which card is better for you?

Which card works best for you is purely down to how much money you think you will spend abroad in a year, and how much you value an Avios point at.

Let’s assume you value an Avios at 1p.

The fee on the Lloyds card is £24 per year whilst the Post Office card is free.

The Lloyds Avios Rewards card is therefore a better deal if you will earn more than 2,400 Avios per year from foreign spending based on a 1p per Avios valuation.  This would require spending something between £2,000 (if 100% of your spend was on the Amex) and £9,600 (if 100% of your spend was on the Mastercard) per year.

If you do not think you will spend this much on your credit card abroad each year, you should go with the Post Office Money Platinum Mastercard instead.

The Post Office card is also a better deal if you simply don’t want to spend any ‘real’ money chasing more Avios points at the moment.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.