This is my review of the Virgin Flying Club Black 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 Update‘ page. My other UK airline and hotel credit card reviews can be found here.
((EDIT: This review was updated in July 2015 and all the information is correct as of that date. The refer-a-friend bonus is still available.)
Key facts: £140 annual fee
The representative APR is 52.1% variable, including the annual fee, based on a notional £1,200 credit limit.
About the card
The Virgin Atlantic Black credit cards – issued by MBNA (Bank of America) – come as a double-pack of an American Express and a Visa card. This has become a trend in recent years, with card issuers wanting to benefit from Amex’s higher merchant fees whilst at the same time not wanting to put off anyone who is concerned about limited Amex acceptance.
MBNA also issues the United, American Airlines, Emirates, Etihad and Lufthansa credit cards, amongst others. This may impact your ability to get the Virgin card if you already hold an existing MBNA product.
What is the sign-up bonus?
The current sign-up bonus is 18,500 miles. The bonus is triggered by your first purchase within 90 days.
There is a refer-a-friend scheme available which gives you an additional 3,000 miles on top of the standard 18,500 miles. If you would like a referral sending to you, email me at raffles [at] headforpoints.co.uk and I will arrange one.
Any other benefits?
Yes. The Virgin credit cards, both free and paid, come with two interesting bonuses:
When you spend £5,000 on the Black American Express card, you will receive an upgrade to Premium Economy (for one person) when you redeem your Flying Club miles for an Economy class redemption. A 2nd voucher is available when you spend £10,000. These vouchers are issued at the END of your card year, not when you pass the spend target.
Spend £7,500 on the Black American Express card and you will receive a free ticket for a companion (taxes apply) when you purchase a full fare cash flight. This voucher is issued as soon as you pass the spend threshold.
As I wrote about the White card, these offers are less interesting than you think. The Premium Economy upgrade is OK, but only covers one person per voucher. The free companion ticket is fundamentally useless, since very few people buy full fare cash tickets.
Note, too, that Visa spend does not count towards the vouchers.
Is there an annual fee?
Yes, £140 per year.
Unlike Amex-issued cards, you do NOT receive a pro-rata fee refund if you cancel.
What do I earn per £1 spent on the card?
The earnings rate on the cards is very good.
You earn 2 miles per £1 spent on the Amex card and 1 miles on the Visa. This is an excellent return – there are no Avios cards which reward you so well, even the paid ones.
Bookings with Virgin Atlantic or Virgin Holidays earn double miles. However, the Virgin Atlantic website charges a whopping 1.5% fee with no cap for using credit cards, and this is NOT waived when using the Virgin card – although you may find that earning 4 miles per £1 outweighs the 1.5% charge.
What is a Virgin Flying Club mile worth?
I covered this in my review of the free White card yesterday.
To recap: Virgin has a lot of partners now. You can earn miles by converting Tesco Clubcard points as well as Heathrow Rewards and American Express Membership Rewards points. Even if you never fly with Virgin, you could easily top up your credit miles with Tesco points to reach enough for an award. They also have particularly good earning rates with Hertz. There is also this on-going deal for 5,000 miles for opening a Virgin Money ISA.
The Little Red domestic services has also made small number of miles more useful. A return flight to London from Aberdeen or Edinburgh is just 7,500 miles plus £35 of taxes, albeit that these routes will be closed down during September 2015.
As with BA, long haul economy redemptions are often poor value due to the taxes and fuel surcharges. However, Virgin has recently reduced its taxes on economy redemptions and they are now up to £120 per person lower than BA would charge. Long-haul premium cabin redemptions are in line with BA in terms of mileage and taxes.
You can also transfer Virgin miles to Hilton HHonors at a 1 : 1.5 ratio which puts a floor under their value. You can also transfer to IHG Rewards Club at 1 : 1.
I would therefore be happy to value Virgin miles at 0.75p – 1p each, in line with 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.
Whilst this card does carry an annual fee, the earnings rate is still excellent. Even on the Visa card, 1 mile per £1 offers a decent return if you use the miles wisely.
How else can you earn Virgin miles from a credit card?
There are three options worth a look, one of which is initially free:
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 Virgin miles.
The American Express Platinum charge card offers 30,000 Membership Rewards points for signing up. These convert to 30,000 Virgin miles. 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 Virgin miles. It has a £75 fee, refunded pro-rata if you cancel.
18,500 miles, the current bonus, is a decent deal, albeit that you are paying a non-refundable £140 annual fee. This would increase to 21,500 miles if I refer you via the refer-a-friend scheme.
The on-going earning rates on these cards are as strong as anything on the market. 2 airline miles per £1 on the Amex is very impressive and is matched only by the Emirates Elite card. Only Emirates Elite can match £1 mile per £1 on a Visa or MasterCard – unless you qualify for the exclusive HSBC Premier – although even at that level it is not hugely better value than a 1% cashback card.
(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.)