Credit Card Reviews 2014 (4): British Airways American Express

(EDIT, August 2014 – whilst originally written in April 2014, all of the information in this review is still accurate.)

This is the 4th 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 overviews can be found here.

Link: British Airways American Express official page

About the card

The British Airways American Express card is issued directly by American Express. This analysis is focussed on the free version of the card – I write about the Premium Plus version separately.

The general American Express rule is that you can hold two charge cards and two credit cards at the same time. Platinum and Gold are the two widely-held charge cards, whilst the credit cards include the Starwood SPG, Nectar, Costco and Harrods Amex cards.

Any American Express you may have which are issued by Lloyds, Barclays, TSB or MBNA will not directly impact on whether you are accepted for this card.

The representative APR is 15.9% variable.

BA Amex - NEW

What is the sign-up bonus?

9,000 Avios when you spend £1,000 within three months.  This offer runs until 30th September 2014 and is a substantial improvement on the usual bonus of 3,000 Avios.

A larger bonus of 10,000 Avios is available if you are referred by an existing cardholder. Please e-mail me at raffles [at] headforpoints.co.uk if you would like a referral. I also receive some bonus Avios for referring you, which helps offset the running costs of the blog.

Any other benefits?

When you spend £20,000, you receive a voucher entitling you to book two Avios redemption flights for the miles of one. This voucher is valid for one year.

I strongly recommend, however, that you do NOT get this card if you are interested in the 2-4-1 voucher. You are SUBSTANTIALLY better off getting the Premium Plus card instead! This post explains why the companion voucher on the basic British Airways Amex is not worth having (in my view).  The lower earning rate on this card and the one year validity of the voucher – compared to two years for the Premium Plus voucher – makes a huge difference.

What is the annual fee?

The basic British Airways American Express card is free.

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

You receive 1 Avios per £1 spent on the card.

You do NOT receive bonus Avios when booking BA flights. This benefit is only available with the Premium Plus card.

What is an Avios point worth?

How long is a piece of string!

This article is my best attempt to calculate the value of an Avios.

How does this compare to a cashback credit card?

The best cashback card on the market which offers a) a MasterCard or Visa, b) no annual fee and c) unlimited cashback is the Asda card, which pays 0.5%.  The best ‘pseudo cashback’ card is the House of Fraser MasterCard, which offers 1% of your spend in House of Fraser gift vouchers.

On this basis, the free British Airways American Express card performs OK, depending on the value you place on an Avios point.

Other points to note

You will not receive a sign-up bonus if you have previously held a BA Amex in the previous six months.  You will not have a problem if you have any other American Express card, including Amex Gold.

For clarity, you WILL receive the sign-up bonus if you currently hold, or have held, the Lloyds Avios Rewards cards – this is not a problem.

If you have the card, you can upgrade to the Premium Plus fee-paying version at any time. However, you will not receive another sign-up bonus. Any spend you have done towards the 2-4-1 voucher to date will be carried over.

You can also do this in reverse – once you have triggered your 2-4-1 voucher, you can call American Express and downgrade to the free card for a few months (receiving a pro-rata fee refund) until your new card year starts and your spend starts counting towards the new voucher.

There is a £20,000 household income requirement.

How else can you earn Avios points from a credit card?

The obvious options are the two Lloyds Bank-issued Avios cards and the two useless TSB-issued cards.

Don’t forget these less-obvious options though:

The American Express Preferred Rewards Gold charge card offers 20,000 Membership Rewards points for signing up and is free for the first year.  These convert to 20,000 Avios points.

The American Express Platinum charge card offers 30,000 Membership Rewards points for signing up.  These convert to 30,000 Avios points.  It has a £450 fee, refunded pro-rata if you cancel.

The Starwood Preferred Guest American Express credit card offers 10,000 Starwood Preferred Guest points for signing up.  These convert to 10,000 Avios points.  It has a £75 fee, refunded pro-rata if you cancel.

The Head for Points Verdict:

Score for the sign-up bonus – 9/10. 9,000 Avios (or 10,000 if I refer you) is an excellent deal for a free card and substantially higher than the usual offer of 3,000 Avios

Score for on-going earning – 5/10 1 point per £1 is not outstanding, and not giving double points on BA spending is unattractive. The 2-4-1 voucher is not worth having on this card, when you compare the terms and conditions to those of the Premium Plus card voucher.

(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. I think whether this or the premium is better if you’re able to get the voucher depends on how much you run through your cards each year.

    You clearly get the best return on your spend if you (and your partner) hit all the signup targets on the ‘churn’ cards, but if you can do that and still spend £20k (each) during the year, then the question changes to simply whether the 1.5x miles plus extra year to spend are worth the annual fees. For couples with slightly lower spend, one partner could have the card, the other stay with the basic. (This is what we do and it also means you have a voucher which you can use on those high demand flights)

    Alternative strategy for those not sure would be to run with the basic until they get an idea of whether they’ll hit the targets and upgrade to premium if they’re not. This way they get the voucher and the 2 year spend, although they wouldn’t get the 1.5x miles (although on £10k that’s only 5k miles so not the end of the world).

    In short, think this card is slightly underrated here :)

  2. Just on the spend you are getting an extra 10,000 Avios if you trigger the companion voucher.
    If you are trying to find redemption seats at busy times, long haul, then you have to book 10-11 months in advance, generally, so you pretty much have to redeem the voucher as soon as you receive it. That doesn’t leave a lot of flexibility.

    • ankomonkey says:

      So is the 1 year voucher lifespan just to book something or to book AND fly?

      • Yes it must be used with one year…so better upgrading to premium plus when near your ten k spend

        • scottnothing says:

          From my own experience): If you start on the no annual fee and then upgrade to the Premium Plus fee-paying version, yes the qualifying spend threshold reduces to £10,000 and yes your prior spend is counted, but once hit, you only have 12 months (and not two years) to redeem the 2-4-1 voucher. In successive years the 2-4-1 voucher has a 2 year life.

          So timing is everything when you are deciding to upgrade (to ensure both maximum potential value out of use of the voucher and to ensure your spend over £10k isn’t going to waste).

          • So when should we upgrade to the premium plus to benefit? . I am into my second year on the BACC, and planned to upgrade last 4 months, so my then 10 k total spend would yield me a two year 241, is this not possible now? A one year one is useless for long haul redemptions, too short a time to plan, find flights, and use one within the time frame. Help!

            • Did you challenge that with Amex? No way would I have allowed that to go through.

              To be honest, I have never heard of this issue before and you are not the first person to do this by a long way. Perhaps it was an isolated Amex IT issue?

      • Yes – well, fly the outbound anyway. This is why I recommend the fee paying card. Not only do you get the extra 0.5 Avios per £1 AND halve your target spend to just £10k, but you get two full years to book and use the voucher.

      • Are they from the fee-free BA Amex though or the fee-paying one?

  3. I’d just point out that there is a cashback card with no fee, no limit and a Mastercard – the Asda Bank credit card. You get a 0.5% statement credit on the next month’s statement. My wife chose this card for its simplicity.

  4. Speedbird_ABZ says:

    I have a Platinum card, so do I have to have cancelled that one for 6 months before I go for one of the credit cards or will that be classed totally differently?

  5. I just redeemed my 241 over the weekend, a rather exciting moment to use my first voucher (sad I know!). I know Raffles always says to value points at circa 0.75-1p per avios. Well as an avid follower of his blog he would be pleased to know that it worked out at just over 7p per avios!

    Booked one way first class to DEL on a 777, but to be honest the value of the points is slightly academic as otherwise there is no way we would be flying First Class, but are looking at pay economy (i.e. taxes), get First Class. Coming back on a paid for ticket from KTM with Qatar in Business on a A320 and then A342 to LHR so will be an interesting comparison.

    • Good that you were excited about your recent redemption Lloyd and not at all sad-part of what the hobby is all about.

      I made a redemption booking recently and (with my O level Maffs :) ) came out at 3.66p per avios – you’ve done well !

    • Well it’s not academic, just think about what you would have done if you hadn’t had the voucher

    • We understand your excitement, these tickets are usually very hard won by those of us not having the flights, so enjoy it all. It’s such a fun hobby, that actually yields results! We loved our HKG a 380 in first return, a big dream come true for us.

  6. Does anyone know whether I will get 3 MR points / £ if I use my premium plus amex card to pay the taxes etc for a BA 2 4 1 voucher redemption or will it just be 1.5 MR? Many thanks!

  7. Yep and The Times subscription that ended yesterday was a good example!
    £1 spent £26 cashback(if paid)