Credit & Charge Card Reviews (12): Lloyds Avios Rewards American Express & Mastercard

This is my review of the Lloyds Avios Rewards credit cards.

It is part of my series of articles looking at the major UK loyalty credit cards and discussing whether or not they are worth applying for. These articles will be linked to the relevant sections of the ‘Credit Cards Offers‘ page. My other UK airline and hotel credit card reviews can be found here.

Key link: Lloyds Avios Rewards credit cards application form (no longer works, just an information page)

Key facts: £24 annual fee

The representative APR is 23.7% variable including the £24 fee, based on a notional £1,200 credit limit.

About the card

The Lloyds Avios Rewards credit cards are issued by Lloyds Bank. There used to be a second Premier version of this card, with a £140 annual fee, but this has now been scrapped for new applications.

The cards come as a twin-pack of an American Express and a Mastercard. You will receive both cards when you apply, although you will only receive one monthly statement with your combined spending.

The Avios Rewards cards are the only travel loyalty cards issued by Lloyds, so it is unlikely to conflict with any existing cards you hold. However, HfP reader experience is that it is not easy to predict whether or not you will be accepted whatever your credit standing may be.

What is the sign-up bonus?

There is no sign-up bonus.

All cardholders receive double Avios points for the first six months on your spending on the American Express card, up to £2,500 per month. If you were spending £1,000 per month on the Amex, that would effectively mean a bonus of 7,500 Avios.

Any other benefits?

There are two very interesting benefits on the Lloyds Avios Rewards £24 cards which make them stand out from all other travel credit cards.

No foreign transaction fees. This is a revolutionary move. 99% of UK credit cards – and ALL other travel loyalty cards – charge a 3% foreign exchange fee when you use your card abroad. The Lloyds Avios Rewards card does not. Even more impressively, you also earn Avios points on your foreign spending.

There are a handful of credit cards which offer no foreign exchange fees and have no annual fee – eg the Post Office Platinum Money card. None offer rewards points, though.

Flight upgrade voucher when you spend £7,000 across the two cards. The voucher allows ONE PERSON to book a return Avios redemption ticket whilst only paying the Avios required for the class below the one you booked.

Alternatively, you can upgrade two one-way flights. This only works if you upgrade two tickets on the same booking at the same time, with the cardholder as one of the travellers. You cannot use the voucher to upgrade two totally separate one-way flights on different days.

A Club World return ticket to New York on a peak date, for example, would only cost 80,000 Avios return (the World Traveller Plus price) instead of 120,000 Avios when using the voucher.

The voucher is valid for 12 months from the date of issue (you only need to book within this period, not travel) and you can only earn one voucher per year.

You only need availability in the higher class, not the lower one. Effectively, the voucher works by booking you a redemption seat for the discounted price of a seat in a lower class.

You cannot use the voucher to upgrade from Club World to First, on BA codeshares or on BA flights from City Airport except for New York.

You cannot use two vouchers on the same booking.  If you and your partner both have a voucher, or if you have two vouchers, you need to make separate bookings for each of you.  You cannot use two vouchers to updated a return flight for two people on the same booking.

You  CAN use the voucher on flights which do not start in the UK.  This allows you to, say, book from Dublin to Heathrow to somewhere to save Air Passenger Duty.  It is also handy if you can book a one-way out using miles from another scheme.

For the solo traveller, the upgrade voucher could have real value. It is less use if you always travel with a partner, although you could book a separate ticket at full Avios price for the other person. I wrote about the upgrade voucher in more detail here.

Note that if you cancel a flight which has been upgraded using the voucher, the voucher is lost. You do NOT get it back. Use with care.

What is the annual fee?

The Lloyds Avios Rewards cards have an annual fee of £24.

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

You receive 1.25 Avios per £1 spent on the American Express card. This is a very good rate of return given the modest annual fee.

The Mastercard only earn 0.25 Avios per £1. This rate is poorer that the FREE Tesco Mastercard at 0.3 Avios per £1. Even if you meet the very strict qualifying criteria, the HSBC Premier Mastercard only earns 0.5 Avios per £1. You need to pay a £195 fee for the World Elite version of the HSBC card which gives 1 Avios per £1.

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?

My default comparison card is the Amazon Platinum Mastercard which is free for life and offers 0.5% cashback. The representative APR is 21.9% variable.

On this basis, the American Express card supplied with the Lloyds Avios Rewards card performs well, earning 1.25 Avios per £1. The Mastercard at 0.25 Avios per £1 does not compare well to a cashback card – the only good reason for using it is that your spend will count towards triggering the upgrade well.

How does this compare to the free British Airways American Express card?

The Lloyds Avios Rewards card compares well for spending (1.25 Avios per £1 on the Amex compared with 1 Avios per £1 on the free British Airways American Express card). The BA Amex is better for fees (the BA card is free compared to £24 for the Lloyds card) and DOES carry a sign-up bonus.

The real differential, though, is the voucher on offer:

if you travel with a partner, you will value the 2-4-1 voucher for Avios redemptions that comes with the British Airways Amex

if you travel alone, you might find the upgrade voucher offered with the Lloyds card more attractive

Of course, if you spend a large amount on credit cards each year and could trigger both bonuses, you may want to have the Lloyds Avios Rewards card alongside one of the BA cards.

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

The obvious options are the British Airways American Express, the British Airways Premium Plus American Express card and the free Tesco Clubcard Mastercard.

Don’t forget these less-obvious options though:

The American Express Preferred Rewards Gold credit 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.

Conclusion

You won’t be getting this card for the attractive sign-up bonus, because there isn’t one. Based on your predicted level of spending, you can decide for yourself if the ‘double Avios on the Amex card for six months’ deal is attractive or not.

The on-going earning rate on the Amex card is attractive compared to competing products, especially given the modest £24 fee. 0.25 Avios per £1 on the Mastercard is poor – the free Tesco Clubcard Mastercard is more generous at 0.3 Avios per £1.

I feel that Lloyds deserves special credit for the ‘no FX fees’ feature on this card. Whilst there are cards with no annual fee which also have 0% FX charges – such as the Post Office or Halifax Clarity cards – if you spend more than £2000 abroad on the each year, the Avios earned via the Lloyds Amex will outweigh the £24 fee.

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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.