MBNA has launched its first enhanced credit card sign-up bonus of 2016 – and it is only October! (I am excluding the Virgin cards here, which tend to move around to match the British Airway Amex bonus.)
This is good news. The introduction of interchange fee capping seemed to signal the death of additional bonuses for signing up, as the cards already look unsustainable in their current form. The rewards on offer can no longer be funded by a capped 0.3% cut on transactions.
The excellent news is that MBNA has launched special deals on the Etihad card (covered today) and the Lufthansa card (see HFP tomorrow).
Etihad launched their UK credit card back in May 2013. Even accounting for the fact that the card was free, the sign-up bonus was a little underwhelming – 5,000 Etihad Guest miles.
Since then they have run various temporary promotions which saw the bonus pitched at 12,000, 17,000 and 20,000 miles. Just before the interchange cap came in last Winter, they launched the most generous mileage offer on a free UK credit card since American Airlines offered 35,000 miles back in April 2013 – 25,000 Etihad Guest miles.
I doubt we will be seeing 25,000 Etihad Guest miles again. However, the new bonus of 15,000 Etihad Guest miles – for a FREE credit card – is excellent.
There is also a second carrot. Applicants will receive a £50 voucher towards a hotel booking with Kaligo.com. There is no small print – no minimum spend, no minimum number of nights.
Full details are on the Etihad website here. The deadline to apply is November 30th.
The card has a representative APR of 22.9% variable. The interest rate was ‘just’ 18.9% until the interchange fee cap came in. You should NOT be getting this card – or any loyalty credit card, to be frank – if you are likely to run a balance.
Here are the key facts:
The cards are a double pack of American Express and Visa
There is no annual fee
You earn 1.5 miles per £1 on the Amex and 0.75 miles per £1 on the Visa
The issuer is MBNA, so no churning – it is likely you won’t be able to get another bonus in the future on this card if you apply now
And the rules for this promotion:
You receive the standard 5,000 miles for spending £250 within 30 days
You receive an additional 10,000 miles for spending £2,000 within 90 days
All in all, the targets are very reasonable, especially as spend on the both the Amex and Visa cards count towards the target.
That’s the good news – now for the bad
Etihad Guest underwent a major devaluation in July 2015.
You can find full details in my article here. These are the new prices for a redemption (return) between London and Abu Dhabi:
Before 8th July:
- Economy: 62,044 miles
- Business: 87,952 miles
- First: 110,452 miles
After 8th July:
- Economy: 62,044 miles plus $100 fuel surcharge
- Business: 131,928 miles plus $200 fuel surcharge
- First: 175,465 miles plus $300 fuel surcharge
If you want to check the pricing on other routes, the online Mileage Calculator is here.
These were big increases. There is no disguising it. An increase of 50% in the miles required for a business class redemption – plus introducing a surcharge – was having a laugh. The Avios devaluation only resulted in a 25% increase in Club World pricing if you flew off-peak.
Of course, you should look at these numbers in the context of Avios. Given a choice between using 120,000 Avios + £500 of charges to fly Club World to Abu Dhabi or Dubai, versus 132,000 Etihad Guest miles + around £350 of charges to fly the A380 or Boeing 787 Business Class Studio it is still no contest. Etihad Guest also gives you free chauffeur transfers in Business Class and First Class at both ends as well.
What can you now do with your 15,000 sign up miles?
There is no point in earning these miles unless you have a plan to spend them. Etihad has a number of airline partners you can redeem on but most are impractical for a UK resident.
If you thought that you could put through enough spend to reach a total of 66,000 miles, you would be able to redeem for a one-way Business Class Studio flight to Abu Dhabi on the A380. I genuinely believe that this is the best business class experience currently available. I recommend reading my review of the Business Studio on the new A380 aircraft.
A 20% bonus on partner miles conversions
Etihad is currently offering a 20% bonus if you convert miles from selected third parties into Etihad Guest.
The downside is that American Express in the UK is NOT included. Etihad partners with American Express Membership Rewards and you can top up your account via them at 1:1 but you will not get a bonus.
You WOULD get a 20% bonus on transfers from Heathrow Rewards and the major hotel schemes. Even Starwood Preferred Guest is included, so you get the standard 5,000 bonus miles for moving 20,000 Starwood points and then a further 20% on top.
HSBC Premier is also a partner although not included in the 20% deal. You can get 20,000 Etihad Guest miles by signing up for the £195 HSBC Premier World Elite MasterCard and a further 20,000 miles after a year if you managed to spend £12,000. You must be a HSBC Premier current account customer to apply for this.
Is it worth pushing spend into Etihad Guest?
If you are starting from scratch, this promotion is probably best if you are a solo traveller and have access to some Amex Membership Rewards points to top up your account.
Some other points to think about:
Remember that Business Class and First Class redemptions come with free chauffeur transfers in Abu Dhabi (they will take you to Dubai if you want) and at 25 of their other outstations, including London.
You can use American Airlines miles to book Etihad flights. If you got enough miles via this promotion for one ticket, you could potentially use any AA miles you have for a second person or to come back.
Etihad has PointsPay. If you can’t redeem for a flight, you can transfer them to a ‘virtual’ (or indeed physical) Visa card at the rate of 0.41p per mile. Not great, but you are effectively trading them for cash, making the sign-up bonus worth £60.
The miles will expire after two years – this will happen even if you have further activity on your account.
If you decide to apply, I recommend you join Etihad Guest first via this link and put your number on the application form. If you don’t, Etihad will open an account for you and it may take you a lot of telephone calls to find out the number and PIN.
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 even though MBNA does not pay me a penny! Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.