Comparing the 13 credit cards that now earn you Avios points!

(EDIT:  This article was updated in January 2017)

What is the best Avios credit card?  With 13 different cards now offering Avios points, and issuers starting to reduce the rewards on Visa and MasterCard products in response to the new EU rules on credit card fees, I wanted to look at all of the options and suggest your best strategy.

If you want to check your credit record before applying for a new card, click here for a free 30-day trial of Equifax’s online credit report service.   Note that a monthly fee of £14.95 will apply following the 30 day free trial of this product if you do not cancel within the trial period.  You can cancel your subscription at any time.

Travel rewards credit cards have high interest rates and are not suitable for you if you do not clear your balance in full every month.  You should focus on a credit card with a low interest rate such as the AA Low Rate Card. This has a very attractive representative APR of 6.4% variable on purchases and balance transfers.

There are now 13 UK credit cards which earn Avios points at a rate of at least 1 Avios per £1 on an American Express card or 0.2 Avios per £1 on a MasterCard or Visa.

This is what you have to choose from:

British Airways American Express (free, 9000 Avios sign-up bonus, 1 Avios per £1, my review)

British Airways Premium Plus American Express (£195, 25000 Avios sign-up bonus, 1.5 Avios per £1, my review)

Lloyds Avios Rewards Amex & MasterCard  (£24, 4500 Avios sign-up bonus if I refer you – see the review for details, 1.25 per £1 Amex & 0.25 per £1 MC, my review)

Lloyds Choice Rewards Amex & MasterCard (£24, no bonus, 1 Avios per £1 Amex & 0.2 per £1 MC, my review)

Starwood SPG Amex (£75, 10000 Avios sign-up, 1 Avios per £1 jumping to 1.25 Avios per £1 if you convert in chunks of 20,000 points, my review)

American Express Preferred Rewards Gold (free, 20000 Avios sign-up bonus, 1 Avios per £1, my review)

American Express Platinum (£450, 30000 Avios sign-up bonus, 1 Avios per £1, my review)

HSBC Premier MasterCard (free, no bonus, 0.5 Avios per £1, my review)

HSBC Premier World Elite MasterCard (£195, 40000 Avios bonus, 1 Avios per £1, my review)

IHG Rewards Club Premium MasterCard (£99, 4000 Avios bonus, 0.4 Avios per £1, my review)

Tesco Premium MasterCard (£150, no bonus, 0.6 Avios per £1, my review)

In addition, the best free MasterCard or Visa option – assuming you don’t qualify for HSBC Premier – is:

Tesco Clubcard MasterCard (free, 2400 Avios sign-up bonus (1000 Clubcard points), 0.3 Avios per £1, my review)

You could also include the free IHG Rewards Club MasterCard (my review), although at 1 IHG point per £1 (0.2 Avios if converted) you would be far better off getting the Tesco card.  You would receive 2,000 Avios by converting the 10,000 IHG points you receive as a sign-up bonus.

Frankly, it has gone a bit crazy. It would be madness to try to do a comparison chart, so instead I want to pick out the key reasons for getting each of the cards.

Cards with a specific ‘best in class’ reason to get them:

British Airways Premium Plus American Express – the No 1 attraction is the 2-4-1 voucher that you receive for spending £10,000 each year. This is valid on Avios redemptions in ALL classes and saves you, for eg, 150,000 Avios on two Club World peak day tickets to San Francisco. Coupled with a high earnings rate, all serious Avios collectors should have one of these.

(If you travel solo, though, ignore it as the 2-4-1 has no value to you – save £195 and get a free card with a lower earning rate. Similarly, if you cannot spend £10,000 per year on the Amex then look elsewhere and save £195.  You also need to be certain that you can generate enough Avios per year to use the 241 voucher effectively – although reading HFP will make that easier!)

American Express Preferred Rewards Gold – this card offers the most generous sign-up bonus for a free card.  You receive 20,000 Amex points for signing up (=20,000 Avios) and there is no fee for Year 1 (£140 thereafter).  You also receive two Lounge Club airport lounge passes.

Tesco Clubcard MasterCard – this 0.3 Avios per £1 if you convert your Clubcard vouchers into Avios.  This makes it the best free Visa or MasterCard for earning Avios for 95% of people (the HSBC Premier cards are better but this has very strict criteria for signing up).  There is also the potential to use the points for Virgin miles or a totally different Clubcard Boost deal.  You currently receive 1,000 Clubcard points (2,400 Avios) for signing up if you use this link – you won’t find this offer on the Tesco Bank website.

That said, 0.3 Avios per £1 is still not great unless you assume that there will be occasional conversion bonuses – and the nasty ’rounding down per transaction to nearest £8′ rule means that you will get less than 0.3 Avios is reality.

HSBC World Elite MasterCardas this article explains, this is an excellent product if you earn enough to qualify for HSBC Premier.  The high annual fee is offset, at least in Year 1, by a 40,000 Avios sign-up bonus and 1 Avios per £1 spent.  The card also comes with airport lounge access.

Cards that work for a niche market:

Lloyds Avios Rewards Amex & MasterCard – there are three groups of people who should pay the £24 fee for this card. The first are those with heavy foreign spend, as this is the only UK rewards card which charges a 0% fee on FX transactions. This saves 3% on all your foreign spend.

The second group is solo travellers. If the BA Amex 2-4-1 voucher doesn’t work for you, the upgrade voucher on this card when you spend £7,000 probably will.  You can read more about the upgrade voucher in this article – since the Avios devaluation, it is more valuable than it was.  The upgrade voucher can also help families of three, allowing two to travel with a BA Amex 2-4-1 voucher and the third using the Lloyds upgrade voucher.

British Airways American Express – the free BA Amex has a decent (for a free card) rate of 1 Avios per £1. However, do not get this card if you are planning to spend the £20,000 required to earn the 2-4-1 voucher – this post explains why.

American Express Platinum – if you meet the £40,000 household income criteria, you should seriously consider applying for this card. Ignore the £450 fee, as it is refunded pro-rata if you cancel. Focus instead on the 30,000 Avios sign-up bonus, the Priority Pass for airline lounge access, Eurostar lounge access, the Starwood hotels Gold card (which also gets you Marriott Gold following the merger), Hilton Gold, Shangri-La Jade, Melia Rewards Gold and the Club Carlson Gold cards.  The hotel benefits will run for a full year even if you cancel your Platinum card after triggering the bonus.

IHG Rewards Club Premium MasterCard – is it worth paying £99 per year for this card, earning 0.4 Avios per £1, when the Tesco MasterCard is free and give 0.3?  Potentially yes, because if you put £10,000 through the card you also get a free night at any IHG (InterContinental, Holiday Inn, Crowne Plaza etc) hotel.  All cardholders also receive IHG Platinum status.  The £99 fee for the first year is offset by the 20,000 IHG points you earn as a special sign-up bonus.

Starwood SPG American Express – the day-to-day earnings rate of 1 Starwood point (= 1 Avios) per £1 isn’t the best, although you do get the flexibility to convert to 30 different airlines.  You also get an enhanced conversion rate of 1.25 Avios per £1 when you convert in chunks of 20,000 points.  The sign-up bonus is 10,000 points, which converts to 10,000 Avios.  The £75 annual fee is refunded pro-rata when you cancel.

Tesco Premium MasterCard – as I explain in this article, this card MAY work for you if you spend £5,000 at Tesco per year, including Tesco Fuel.  This is because you receive 5,000 bonus Clubcard points – 12,400 bonus Avios – for hitting this target.  It is unlikely to work well for other people.

Cards which are not ‘best in class’ in terms of benefits:

Lloyds Choice Rewards Amex & MasterCard – it comes with a £24 fee, but the earnings rate (1 Avios per £1 on the Amex and 0.2 Avios per £1 on the MasterCard) can be beaten by free cards

(Don’t forget that our directory of all UK airline and hotel credit cards can be found here.)

PS. If you are a sole trader or run a small business, you may also want to check out the American Express Platinum Business Card and the American Express Gold Business Card.

Representative APR rates for the cards above can be found on our ‘Credit Cards Update’ page.

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.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

1,000 bonus Avios with Amex Currency Exchange this Christmas
Bits: £100 Qatar discount, Starwood / Design Hotels competition
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Comments

  1. Has anyone received the 4500 Avios from the Lloyds refer a friend offer recently?

    Reason I ask, although it is still shown on the Avios website, in the small print at the bottom of the page it says you need to apply before 16th October. Thanks.

  2. Re: the Lloyds card. Do bookings have to made via the Avios site or can it be a redemption via BAEC?

    • Has to be via Avios.com or directly with Avios over the phone, so you need to transfer any points across from your BAEC account via Combine My Avios first.

    • Must be via the Avios site. That makes no difference (they should see the same BA availability) unless you are BA Gold in which case you lose access to the extra economy availability.

  3. Harry – it does work, just you don’t get the instant email confirmation :)

  4. It’s interesting reading about the contactless issues on here – with ShopSmall AU I did contactless for over 80% of them (some of the card readers would only do MC/Visa contactless, had to do C+P for Amex) but in all those cases I got confirmation emails fine – they must be processing things differently on the UK terminals for some reason. Sounds like credits still post OK though, the issue is just the confirmation emails not arriving?