This is my review of the Lloyds Avios Rewards credit cards.
This article was updated on 18th January 2017 and is correct as of that date.
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.
If you want to check your credit record before applying for a new card, click here to get your free Equifax credit report and score. Your first 30 days are free then it’s £14.95 per month. You can cancel at anytime.
As with all rewards cards, this is not a suitable product 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 5.85% variable on purchases and balance transfers.
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 if you apply direct via Lloyds or avios.com
However, a bonus of 4,500 Avios points is available if you are referred for the card. If you want a referral link emailing to you, please contact me at rob at headforpoints.co.uk.
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 couple of other credit cards which offer no foreign exchange fees – eg the free Post Office Platinum Money card. None offer rewards points, though. I wrote more about the ‘no FX fees’ benefit on this card here.
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.
For the solo traveller, this 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!
How does this compare to a cashback credit card?
My default comparison card is the AA FuelSave Credit Card. This card is free in the first year and offers 0.5% cashback on all spending, 2%-4% cashback on fuel purchases and – in year one – free AA breakdown cover. The representative APR is 22.4% 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?
Don’t forget these less-obvious options though:
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.
If you let me refer you for the card, the sign-up bonus of 4,500 Avios points is acceptable for a free card.
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. If you only spend a small amount abroad on credit cards, you may be better off with the Post Office or Halifax Clarity cards which are free. If you spend more than £2000 abroad on the each year, though, and the Avios earned via the Lloyds Amex will outweigh the £24 fee.
The application form for the Lloyds Avios Rewards American Express and MasterCard can be found here.
(Want to earn more miles and points from credit cards? Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the 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.