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The future of loyalty credit cards is here and it’s not a pretty sight

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MBNA launched a new rewards credit card yesterday.  This is not a travel rewards card.  The reason I am writing about it is that it shows you what the future of free non-Amex reward credit cards will be like.

To put this card into context, you need to remember that MBNA has historically been the most generous player in the market when it comes to credit card sign-up bonus.  Back in 2013 it offered 35,000 American Airlines miles with the FREE UK AA cards.  As late as September 2015 it was offering 25,000 Etihad Guest miles with the FREE UK Etihad cards.

What is fascinating about this card is that it is possibly the first brand new free UK rewards card launched since interchange fees were cut to 0.3% last December.   It is a sign of what the card companies can now afford, and a sign of what you will see on existing cards once the current contracts expire.

The new card is targetted as customers of intu shopping centres across the UK.

The first thing to notice is that it only comes as a Mastercard.  

Historically MBNA has offered double packs of Amex and Visa / Mastercard products with higher rewards on the Amex card.  This is now dead because third-party Amex cards (ie MBNA, Lloyds, Barclays ones) are subject to the same 0.3% fee cap as Visa and Mastercard.

American Express is believed to be in the process of cancelling its licensing agreements with MBNA etc since those contracts are now pointless.

The second point to note is that the rewards are unexciting.  

This is what you get back from Year 2:

a £10 intu Gift Card when you spend £3,000 on card purchases
an additional £10 intu Gift Card when you reach £5,000 on card purchases

The best possible return you can get is 0.4%.  However, in order to achieve 0.4%, you need to stop spending on the card as soon as you hit £5,000.  The more you spend above £5,000, the lower your overall return will be.

These rewards are doubled in Year 1 but that is just a way of making the sign-up deal sound more interesting.

The third thing to note is that the card has a lot of soft offers which cost MBNA nothing.

These include one year of Gourmet Society membership, 30% off main courses at Pizza Express and free buggy hire at Intu shopping centres.

On the positive side, it is worth noting that the interest rate – at 16.9% – is lower than the 22.9% which is now charged on most of the MBNA airline cards.

Conclusion

This package – a maximum return of 0.4% on your spending and, realistically for most cardholders, less – is the best that MBNA thinks it can afford in the new credit card world.

Coming from the company that brought you hugely aggressive sign-up bonuses in the past, it is a vision of where all rewards card, including airline ones, will end up when the current contracts come up for renewal.

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:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

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.

British Airways American Express Premium Plus

25,000 Avios and the famous annual 2-4-1 voucher Read our full review

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express

40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review

Virgin Atlantic Reward+ Mastercard

15,000 bonus points and 1.5 points for every £1 you spend Read our full review

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.

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

American Express Business Platinum

40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Capital on Tap Business Rewards Visa

Huge 30,000 points bonus until 12th May 2024 Read our full review

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.

Barclaycard Select Cashback Business Credit Card

1% cashback uncapped* on all your business spending (T&C apply) Read our full review

Category

General

Comments (157)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • rams1981 says:
    6 Sep6 September 15:43

    OT anyone used supercard domestically to see if they correctly charge for £ spending?

  • harry says:
    6 Sep6 September 17:53

    I missed it before but I see that we can carry on using the MBNA ex-BMI cards after the BMI Club destination miles finish posting on 30 September.

    For those who don’t have the letter, MBNA will set up a new rewards scheme for our existing Diamond Club cards, so interesting to see what that looks like, can’t wait 🙂

    I did realise that as long as Amex runs Shop Small again this year, it will be good to have that extra Amex card in the armoury – could be worth a fair few quid in itself.

    Nil desperandum!

    • Yuff says:
      6 Sep6 September 18:13

      The more cards the merrier as far as shop small is concerned 😉

    • Andrew says:
      6 Sep6 September 19:21

      An important part of the letter is:-

      “You can contnue to earn yoru usual miles on card purchases that *post* to your account on or before 30 September 2016”.

      So be careful about making a large purchase on the last few days of the month – it might not “post” until 1st October. or later.

    • flyforfun says:
      6 Sep6 September 20:54

      I expect the “exciting offers” MBNA have lined up for the Diamond Card to be recycled from the above selection of soft and useless deals. I found the Gourmet Society and other meal club cards to be restrictive and not good value. I haven’t eaten in Pizza Express for around 10 years i if not more now. Far better pizza places, particularly non-chains.

      I think it will be a case of make hay (points) on this and other cards while we enter their final twilight days and then search for either a cash back card or something else that gives something back while shopping.

      • Rob says:
        6 Sep6 September 20:56

        I will be pushing for a fee refund and then potentially switching to the Lufty card.

        • harry says:
          6 Sep6 September 21:04

          If Amex cancels its licensing agreements with MBNA (by mutual agreement, I assume), will the old BMI Amex card just cease to exist, do you reckon? With the duo card (Visa in my case) hanging on if people want it?

          • flyforfun says:
            6 Sep6 September 23:07

            Maybe not as doomed as we thought. Just got an email from Amex pushing the BAPP card with bonus points for recommendations. There must be some life left to that one at least!

  • Nick M says:
    6 Sep6 September 18:20

    RE BA Spend £5/10k extra bonus – is this just showing in the main offers list? Or was it in an email? (Not showing on either of ours and we haven’t used the cards for a couple of months – keep meaning to cancel!)

  • Brian says:
    6 Sep6 September 19:13

    Re the IHG free night voucher with the Creation credit card, can anyone advise the following;

    1. How long the voucher lasts before expiring?

    2. if it expiries, for example, in September 2016, can I book before the expiration date for a date afterwards e.g. January 2018 ?

    Thanks

    • Rob says:
      6 Sep6 September 20:34

      Voucher lasts 12 months from issue date, which will be your card anniversary it seems.

      The Barclaycard version can be used for a stay after the expiry date but, as I found, you cannot amend or cancel the stay in that case.

      • Mark e says:
        7 Sep7 September 01:26

        Thanks Raffles , that’s something I’ve been interested to know as I have the Barclaycard version

  • Clive says:
    6 Sep6 September 20:53

    Triple Avios Offer – Book and Fly between September 6th – Dec 11th 2016

    http://www.ba.com/tripleavios

  • TripleB says:
    7 Sep7 September 17:50

    I know that different companies have different criteria for determining an applicant’s credit score – but I’ve only been in the country a year (so have limited credit history) and I was carefully nursing my credit score (monitored via equifax) and took a massive hit (good to poor) when in the same month I changed my electric supplier (I hadn’t not paid a bill on time – just switched to a provider with a cheaper tariff) and had a closing balance on my one and only credit card of £375 (of a £500 limit) – so was classed as using a very high percentage of my available credit (notwithstanding that the £375 was paid off in full before the due date).

    Having said all that – assuming that you have been up to date with payments on everything, is 3 months between credit applications generally enough to not be classed as being of poor credit for applying for too much credit. It’s been 3 months since I switched my electric supplier and 7 months since I applied for credit proper and was going to apply for the Hilton card in the not too distant future. I’m keen to get on board this game – but will wait another couple of months if the general consensus is that 3 months is too soon. For some reason the Barclays eligibility check doesn’t show your chances of the Hilton card (my chances on all the others are 8s and 9s out of 10).

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