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Credit & Charge Card Reviews (17): Lufthansa Miles & More American Express & Visa

This is my review of the Lufthansa Miles & More UK 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.

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 6.4% variable on purchases and balance transfers.

Key link:  Lufthansa Miles & More credit cards application form

Key facts:  No annual fee

The representative APR is 22.9% variable.

About the card

The Lufthansa Miles & More credit cards – issued by MBNA (Bank of America) – come as a double-pack of an American Express and a Visa card.  This model may not continue into the future as Amex fees on co-brand cards to UK retailers are now capped at the same level as MasterCard / Visa at 0.3%.

MBNA also issues the United, Etihad, Emirates, American Airlines and Virgin credit cards, amongst others.  If you already hold one of these cards and are refused for the Miles & More card, they will often change their mind if you ring up and offer to reduce the credit limit on your existing card.

Whilst I tend to refer to this card as ‘the Lufthansa card’, Miles & More is technically the loyalty programme for a number of airlines, some owned by Lufthansa (Swiss, Austrian, Eurowings, Brussels Airlines) and some of which are not (LOT, Croatian, Adria, Luxair).

What is the sign-up bonus?

The current offer is 10,000 miles.  This is a major improvement on the usual bonus of 1,500 miles and is running until 30th November 2016.

You receive 1,500 miles with your first purchase and a further 8,500 after spending £1,000 within 90 days.

Any other benefits?

You earn 33% bonus miles for the first six months.  This could have some value if you are a heavy spender.

Even more important than earning miles, in my view, is that having the card and using it at least once a month stops your Miles & More miles from expiring.

If you are a base level M&M member, your miles will expire three years after you earn them whether or not you have credited miles to your account in the meantime. This is a particularly mean and nasty expiry policy.  British Airways, for example, simply requires that you credit 1 Avios to your account every three years to keep all your miles active.

I had the M&M card for a couple of year before I gained M&M status, and it was purely for this reason – to safeguard my 100k or so miles.  Note that you need to have had the card for three months before your miles are protected.

Miles More credit cards review

Is there an annual fee?

No, there is no fee.

What do I earn per £1 spent on the card?

You earn 1.5 miles per £1 spent on the Amex card and 0.75 miles on the Visa. 

This is at the high end of what you can earn on any miles credit card these days, especially the 0.75 miles on the Visa.  It is especially generous for a free card (free Avios MasterCard or Visa cards earn 0.2 – 0.3 points per £1) and, to be honest, I have some concerns about whether this rate is sustainable under the new EU merchant fee caps.

Remember that the Miles & More cards have an FX fee of almost 3% for foreign currency transactions.  You may want to consider getting a separate card to use abroad which charges no foreign exchange fees.  I recommend the Lloyds Avios Rewards card which also earns Avios points – even on your 0% FX transactions!  It comes with a 4,500 Avios sign-up bonus if I refer you.  My review of the Lloyds Avios Rewards card is here.

What is a Miles & More mile worth?

This is clearly a ‘finger in the air’ exercise. I would, however, flag some key pointers.

M&M miles are useless for short-haul.  Lufthansa taxes are so high that they are usually, amazingly, higher than the cost of a cash ticket!  (This happens because LH massages the taxes figure on cash tickets on short-haul routes so that its fares match competitors. On redemption tickets, you are hit with the full whack.)  How does 35,000 miles plus £130 of taxes for an Economy ticket from London to Berlin sound? Appalling, I imagine, given that BA only wants 8,000 – 9,000 miles and £35 taxes.

As with British Airways, long haul economy redemptions are also very poor value due to the high taxes imposed.

Long-haul premium cabin redemptions are more in line with BA’s taxes and the number of miles needed is often a bit lower, especially as children aged 2-11 get a 25% discount on their tickets.  There have also been some genuine improvements in seat quality recently with Lufthansa now finally ‘fully flat’ in business class.

The real benefit is availability, which in business is often far better than BA, especially during British school holidays.  Lufthansa Senator (Gold) cardholders also get a 50% miles discount for a 2nd ticket on the same flight.  This benefit can be used an unlimited number of times.

Lufthansa also has an excellent First Class product. The First Class Terminal / First Class Lounges in Frankfurt are amongst the best in the world (including private car transfer to and from the steps of your plane).

Miles & More members also get decent access to Lufthansa First Class redemptions – far better than Star Alliance partners.  Note, though, that Swiss First Class redemptions are no longer available to anyone except Miles & More elite members.

Recently Lufthansa has been running monthly mileage sales which have some attractive bargains.  Intra-Europe flights have been as low as 5,000 miles – although the high taxes still need to be paid.

I am happy to value Miles & More miles at my standard 0.75p valuation.  The best value is in Business Class redemptions.  First Class reward seats carry a disproportionate premium – although Lufthansa First Class is an exceptional experience – and economy rewards are pointless due to the taxes.

If you can redeem during the monthly ‘mileage sales’, you will receive an even better deal.  These cover a lot of destinations but you do need to travel during the following six weeks or so.

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.

The Miles & More credit card is substantially more generous than this, even on the Visa card.

However, the sheer number of points needed for a long-haul redemption in Business or First Class – the only redemptions worth bothering with because of the taxes – means that this card is of little long-term use if you do not fly with Star Alliance and collect the bulk of your miles that way.  The only exception would be if you had substantial amounts of credit card spend.

Other points to note

You need to apply a scarcity factor to Miles & More miles.  They are not an American Express Membership Rewards partner and there are relatively few large-scale ways other than flying for a UK resident to earn miles. You can get 500 here, 250 there from a hotel stay or Heathrow Rewards conversion, but these are not the serious numbers required for a worthwhile redemption.

Lufthansa has even scrapped the sale of miles, so you can’t top up your account easily even if you are willing to pay.

If you have 120,000 miles in your account with no flying planned, and want to get to 140,000 for 2 business class tickets to India, the credit card would be a more cost effective way of earning them than converting hotel points.

That said, one way of getting a slug of Miles & More miles cheaply is via the Starwood Preferred Guest American Express card.  This offers a sign-up bonus of 10,000 Starwood points which convert to 10,000 Miles & More miles.

You can also indirectly earn M&M miles via the Starwood Amex at the effective rate of 1 mile per £1, or 1.25 miles per £1 if you convert your SPG points in 20,000 point chunks to get the 5,000 mile bonus.

Conclusion

The current sign-up bonus of 10,000 miles, running until 30th November, makes this card very interesting for anyone looking to boost their Miles & More balance.

The additional 33% miles bonus that you receive for the first six months has real value on top of whatever sign-up bonus you get.

The on-going earnings rate is very strong.  1.5 miles per £1 is as good as it gets in the current market for a free American Express airline card.  0.75 per £1 on the Visa is also very strong. The fact that using the card stops your Miles & More miles expiring if you have no status also adds value.

The application form for the Lufthansa Miles & More American Express and Visa cards 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.

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Comments

  1. Personally I use my M&M for;
    a) Upgrading Lufthansa flights.
    b) For US domestic on united as the rates are good and taxes almost non-existent.
    I made a UA BusinessFirst redemption LAX-EWR (which is a premium service lie-flat flight) last week on 48hrs notice for 17,000 M&M miles + $7 in taxes, or you can do any two sector domestic F for the same rates. Y is 12,000.
    It also gives good redemption rates from the US to central america, the caribbean, and hawaii- all of which you can do three sector trips – and good rates between Hawaii and NZ/Australia – all with the same minimal taxes.

  2. If you can get available seats on Hawaii routes you’ll be lucky. You know, taxes are really low on Eurowings/germanwings miles tickets, which makes short notice redemptions a plausible good deal.

  3. > How does 35,000 miles plus £130 of taxes for an Economy ticket from London to Berlin sound?
    > Appalling, I imagine, given that BA only wants 8,000 – 9,000 miles and £35 taxes.

    A couple of things to remember here, though.

    a) At short notice, the price often drops signficantly.
    b) M+M does have a sort of equivalent of Reward Flight Saver – 15 000 instead of any taxes on short haul
    c) Berlin taxes do seem very high, compared with some other places, and the same will apply to London.

    Two at random:

    Just checked MAN-MUC for later this month: out 15 Nov, in 20 Nov.

    Cost 20 000 miles + 15 000 (or £64.84 taxes).

    which is actually not that far out of line with BA’s offering for the same route,
    which would 2 x 9 000 miles + £70 taxes.

    Plus, of course, the LH offering is direct.

    Perhaps more interesting, for exactly the same number of miles (or a small increase in taxes to £74.14 you can get MAN-BRU-TLL (Tallinn).

    There are also, in theory, flights to Geneva for just 15 000 miles at certain times.

    I do not reckon that M+M miles are generally worth as much as Avios, though.

    • Lufty First Class is exceptionally good, though. One of the best experiences you can have if you go via Frankfurt and the First Class Terminal. After a fairly average – to put it politely – BA F experience today I am very keen to give it another go.

  4. I wonder if I can route a £4k HMRC payment through the AmEx card from this pack at Visa interchange rates. I was planning to use the Visa card.

    • I don’t see how – the Amex card has a different number that will identify it as an Amex and you’ll be charged the relevant interchange fee for that rather than Visa.