Is the Lloyds Avios Rewards credit card about to be dropped?

(EDIT:  Even though I have it in writing from Lloyds that the refer-a-friend scheme has been terminated, the website has been updated this morning following my article – by Avios – to show a new closing date of 31st December 2017.   That said, I know that no referrals have been processed for at least two weeks, so who knows?!)

For clarity, this is a purely speculative article – but the smoke signals seem to be there.

When the Lloyds Avios Rewards credit cards were launched, I was initially sceptical – apart from the hugely generous offer of no FX fees on foreign spending.  Over time I came to appreciate the package, especially the way that the upgrade voucher benefits solo travellers who get no value from the BA Amex 241 voucher.

Feedback about Lloyds customer service was shocking.  It has not improved in the last four years.  My own experiences were just as bad – after I paid my wife’s bill from my bank account (a not uncommon thing, you might think) her cards were frozen for ‘suspected money laundering’.  They would only be unlocked when I went to a Lloyds branch and showed them a statement from my HSBC account showing the money going out – but my next HSBC statement wasn’t due for 3 weeks and they would not accept a print from an in-branch machine.

What prompted this article is that Avios has just withdrawn the refer-a-friend bonus it was offering for the Lloyds Avios Rewards cards.

This scheme has run for the last three years.  For Avios and Lloyds it was a very cheap way of recruiting new customers – and because Lloyds does not allow ‘churning’, they were likely to be long term customers too.

Why would Avios and Lloyds do this?  Potentially because the cards are about to be scrapped.

Lloyds Avios Rewards 2

Here are some more reasons why the cards may be on the way out:

Over the last few months we have seen Lloyds scrap the £140 Premier Avios card.  TSB has also scrapped its two Avios cards having dropped the ‘refer a friend’ scheme a few months earlier.  To be fair, these products were all stinkers.

I understand that American Express is cancelling all of its licensing agreements.  Lloyds, MBNA and Barclays will have to stop offering Amex cards in the medium term.  This means that the Lloyds Avios Rewards card would become a pure MasterCard package.

At 0.25 Avios per £1 on the MasterCard, with no companion Amex, Lloyds is going to struggle to get many people to pay £24 per year for the card

The core selling point of the Lloyds card – no FX fees and earn Avios on foreign spending – is not sustainable.  In a world of 0.3% interchange fees there are only three ways to make money with a credit card.  One is the annual fee (not sustainable as a pure MasterCard paying 0.25 Avios per £1), the second is interest charges (which are minimal on loyalty cards with a high income professional card base) and the third is the 3% fee on foreign spending (which Lloyds has voluntarily given up).

We know that American Express has agreed a wide-ranging credit card deal across IAG.  I understand this includes options for Ireland and a Vueling card for Spain.  The Lloyds card gets in the way of this.

We know from the recent Investor Presentation that all of the Avios schemes are to be merged onto the avios.com platform.  Aer Lingus AerClub shows how this works – your AerClub number is also an avios.com number, and when you want to redeem you have to visit avios.com.  When the distinction between avios.com and BAEC disappears, there is no need for both Lloyds and Amex credit cards.

Whilst probably not part of the original reasons why Avios may want to drop Lloyds, the fact that Lloyds will now also be issuing the Virgin, American, United, Lufthansa, Emirates and Etihad cards will not go down well.

As I said at the top of the page, this is pure speculation on my part.  If we’re honest, though, it is difficult to see how these cards could continue to exist in their current form.

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Comments

  1. Prematurely written article Rob? Offer seems to be extended!

  2. Nate1309 says:

    I still have the old Duo pack that has a different set of rules. Do you think these are for the axe too Rob? The MC is the one constant card in my wallet 🙁

  3. I wonder if this is why I received an email from Lloyds regarding my Duo credit cards. Asking if I would like to complete a quick survey regarding their cards!! Nearly at my £7k for this year so I hope it doesn’t get pulled. Especially as I’ve just cancelled my Amex Rewards and BA Amex cards

  4. Streetwise says:

    I am a big fan of this card but I wish Lloyds would show you on their website when you have reached the £7k a bit like AMEX has a countdown

    • It shows on the Avios website under “vouchers” and seems to update very quickly.

      • But only once you’ve actually hit the £7k spend. Nothing shows if you have spent <7k

        • Streetwise says:

          thanks ! i am going to have to call them because my total spend since anniversary has been more than £7k !

          • With Lloyds you can actually call them to request an anniversary/annual spent confirmation. However, you will need to get to speak to the right CS( hang up and try again is the approach), who will then send a request to the admin team. If you are ‘lucky’…you will receive a written confirmation as to how much you have spent so far…

            Lloyds customer services team could be really painful to speak to if you are used to the Amex CS in Brighton. This is a bit of lottery….might not worth your time. The CS are unfortunately generally clueless and will tell you this is not something they will do. They often want to transfer you to the Avios team as Alan mentioned earlier or even correct a request was sent through but nothing was sent out, you will need to follow up again. Last time I requested it I was told there was a backlog and waiting time was 2 months.
            To sum up, it is best to use your spreadsheet:))

  5. flyforfun says:

    Its the beginning of the end. Make hay while the sun shines is all I can say. 🙁

  6. the_real_a says:

    I would miss this card deeply. For the past couple of years i have used the voucher for a long haul J upgrade. This time

    LBA to SIN and BKK to LBA

    Total avios 162,000 but with the voucher i paid 84,000 a saving of 78k avios.

    • Agreed. It is a serious perk. Take it they could drop the existing agreement on existing cards? I’m definitely going to keep it in the locker.

  7. the_real_a says:

    Also don’t forget – if you have the AMEX plat insurance you can pay for your flight and hotel with LLyods AMEX (and benefit from the 0% FOREX) and still qualify for the insurance benefits.

    • You sure?

      1.2 CANCELLING, POSTPONING AND ABANDONING YOUR TRIP
      For the benefits under this section to apply transport and/or accommodation must have been Purchased in full using:
      I. the Card;
      II. American Express Membership Rewards® points; or
      III. Any travel rewards programmes provided the taxes
      and/or surcharge

      “Card” means any card or other Account access device issued to a Cardmember (or a Supplementary Cardmember) for the purpose of accessing the Account.

      “Account” or “Card Account” means your consumer and small business cards issued by American Express in the UK, excluding corporate cards and any American Express Cards issued by bank partners.

      http://www.americanexpress.com/uk/content/pdf/card-products/platinum-charge-card/UK_Platinum_Charge_Insurance_Documentation_v1_0.pdf

      • the_real_a says:

        I was 100% sure before you commented, but i have looked back through the policy document and come to question myself.

        It looks like i may have been mistaken 🙁

        • I’m afraid so – you can use any *AMEX-ISSUED* Amex card, but not any Amex at all.

      • the_real_a says:

        Thanks for questioning my comment, i may have made an expensive mistake in the future!

        • No problem 🙂

          • Take it that is the whole holiday so if you’re booking multiple components or any single part of the hotel, flights etc not booked through Amex and the insurance is void? Just for that particular component or the whole lot?

  8. We took this card out in December and got the refer a friend bonus no problem, however the first months points have not transferred. LLoyds have said this is a known issue and that there is a problem with linking the Lloyds a/c to the Avios account. The referral bonus comes from Avios which is why it paid in ok. Was told we will get the points eventually but it could be months. I know from past comments that others were having this problem – has anyone had it resolved and their points credited. Will phone them again at the 2nd statement if it doesn’t work again.

    • You will get them eventually.
      I would recommend leaving it a few months as they will pay you compensation.leave

    • TGLoyalty says:

      Chase up they will give you some compensation for your trouble 🙂

      I called to query 1200 miss Avios a couple ties and ended up getting 10x the value of my avios in compensation, with no prompt from myself, and then the Avios a few days later 🙂

    • Stephen Reid says:

      I had this exact same problem, it took about 4-5 months to get it sorted. Escalate it to a complaint if the points don’t appear soon. I had my fee refunded plus compensation making it up to £96. You have to ask for it. Lloyds regularly phoned me with updates and once the complaint was resolved they gave me another £100 for my trouble.

  9. what does “Lloyds does not allow ‘churning’,” mean ?

    churn is the process of leaving one provider and taking your custom to another. So Lloyds doesn’t allow you to give up the card and you must keep using it forever? How can they enforce that?

    I don’t consider “churn” to be leaving for a while and THEN going back to the same supplier later. this is not what “churn” is.

    • You might not consider it churning but it is 😉 Clearly a provider can’t force you to keep the card, but they can certainly either refuse a subsequent application or can say you can have the card but without the sign-up bonus.

      • doesn’t match the explanation of “churn” I find on the internet. it’s explained as “leaving”, not “leaving and then going back”.
        https://en.wikipedia.org/wiki/Churn_rate

        • Well with Wikipedia we can always edit it. I’m afraid I still don’t get your point though – the key thing is opening a card, hitting a target to receive a bonus then closing the account. Whether you then sign up with another provider or after a period reopen the same card is irrelevant, you are still opening the account only for the benefit. The problem is if the card issuer doesn’t want previous customers to reapply – as now happens in the USA with Amex (although they still get much bigger sign up bonuses and better cars benefits so I’m not feeling that sorry for them).

  10. Rob – re. Virgin MBNA – was shocked by the credit limit of £2k given to my wife. Is this a trend for new applicants or she is being given special treatment? She earns pretty well & on an NHS income so I would have thought a surer than surer risk profile?

    • My wife just got £20k from Virgin, a month after they gave me £20k on my Lufthansa card (and I still my BMI card at that point with £20k on it!).

      • Luck you!! Maybe the public sector doesn’t get the stable rep it used to?

        We have just moved so maybe that’s factored into their assessment?

        Maybe I’m just reading too much into it but it does rather reduce our earning.

        • Does your wife have any other cards with MBNA (or even Lloyds though I seriously doubt they are that speedy to integrate anything…)?

  11. As a former Lloyds Bank customer who was shunted over to TSB, I have the TSB dual Amex/Mastercard Avios card (which they’ve now scrapped) and despite phoning and emailing them for months now, I’ve not received any Avios points for the £14K spend I’ve made on these cards. Anyone else experiencing problems getting their points credited or can offer advice? Sick and tired of being fobbed off by TSB customer services – Avios say it’s an issue with the bank.

    • Just include the words “formal complaint” somewhere and after 8 weeks you can go to the Financial Ombudsman

  12. When does the Lloyds takeover of MBNA take place? I’m quite excited about that option. Would it be farcical to think other airline partnerships might offer upgrade or 2 for 1s?