Comparing the 13 credit cards that earn you Avios points!

What is the best Avios credit or charge card?  With 13 different cards offering Avios points, either directly or indirectly, and issuers starting to reduce the rewards on Visa and MasterCard products in response to the 2015 EU rules on credit card fees, I wanted to take another look at all of the options and suggest your best strategy.

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.

Avios-earning credit cards are not suitable 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.

What are my options?

There are now 13 UK credit or charge cards which earn Avios points at a rate of at least 1 Avios per £1 on an American Express card or 0.2 Avios per £1 on a MasterCard or Visa.

This is what you have to choose from, ranked in order of sign-up bonus:

HSBC Premier World Elite MasterCard (£195, 40000 Avios bonus, 1 Avios per £1, representative APR 59.3% variable including fee based on a notional £1200 credit limit, my review)

American Express Platinum (£450, 30000 Avios sign-up bonus, 1 Avios per £1, my review)

American Express Preferred Rewards Gold (free, 20000 Avios sign-up bonus, 1 Avios per £1, my review)

British Airways Premium Plus American Express (£195, 18000 Avios sign-up bonus, 1.5 Avios per £1, representative APR 76.0% variable including £195 fee based on a notional £1200 credit limit, my review)

Starwood SPG Amex (£75, 10000 Avios sign-up, 1 Avios per £1 jumping to 1.25 Avios per £1 if you convert in chunks of 20,000 points, representative APR 36.2% variable including fee based on a notional £1200 credit limit, my review)

Lloyds Avios Rewards Amex & MasterCard  (£24, 4500 Avios sign-up bonus if I refer you – see my review for details, 1.25 per £1 Amex & 0.25 per £1 MasterCard, representative APR 23.7% variable including fee based on a notional £1200 credit limit, my review)

IHG Rewards Club Premium MasterCard (£99, 4000 Avios bonus, 0.4 Avios per £1, representative APR 41.5% variable including fee based on a notional £1200 credit limit, my review)

British Airways American Express (free, 3000 Avios sign-up bonus, 1 Avios per £1, representative APR 22.9% variable, my review)

IHG Rewards Club MasterCard (free, 2000 Avios bonus, 0.2 Avios per £1, representative APR 41.5% variable including fee based on a notional £1200 credit limit, my review)

Lloyds Choice Rewards Amex & MasterCard (£24, no bonus, 1 Avios per £1 Amex & 0.2 per £1 MasterCard, representative APR 23.7% variable including fee based on a notional £1200 credit limit, my review)

HSBC Premier MasterCard (free, no bonus, 0.5 Avios per £1, representative APR 18.9% variable, my review)

Tesco Premium MasterCard (£150, no bonus, 0.6 Avios per £1, representative APR 56.5% variable including fee based on a notional £1200 credit limit, my review)

Tesco Clubcard MasterCard (free, no bonus, 0.3 Avios per £1, representative APR 18.9% variable, my review)

Frankly, it would be madness to try to do a comparison chart so instead I want to pick out the key reasons for getting each of the cards – if there is a key reason!

credit cards

Cards with a specific ‘best in class’ reason to get them:

British Airways Premium Plus American Express – the No 1 attraction is the 2-4-1 voucher that you receive for spending £10,000 each year. This is valid on Avios redemptions in ALL classes and saves you, for eg, 150,000 Avios on two Club World peak day tickets to San Francisco. Coupled with a high earnings rate, all serious Avios collectors should have one of these.

(If you travel solo, though, ignore it as the 2-4-1 has no value to you – save £195 and get the free card with a lower earning rate. Similarly, if you cannot spend £10,000 per year on the Amex to trigger the voucher then look elsewhere and save £195.  You also need to be certain that you can generate enough Avios per year to use the 241 voucher effectively – although reading HFP will make that easier!)

American Express Preferred Rewards Gold – this card offers the most generous sign-up bonus for a free card.  You receive 20,000 Amex points for signing up (=20,000 Avios) and there is no fee for Year 1 (£140 thereafter).  You also receive two Lounge Club airport lounge passes among other benefits.  This is best Amex card for beginners to the miles and points hobby.

Tesco Clubcard MasterCard – this earns 0.3 Avios per £1 if you convert your Clubcard vouchers into Avios.  This makes it the best free Visa or MasterCard for earning Avios for 95% of people (the HSBC Premier cards are better but this has very strict criteria for signing up).  There is also the potential to use the points for Virgin miles or a totally different Clubcard Boost deal.

That said, 0.3 Avios per £1 is still not great unless you assume that there will be occasional conversion bonuses – and the nasty ’rounding down per transaction to nearest £8′ rule means that you will get less than 0.3 Avios in reality.

HSBC Premier World Elite MasterCardas this article explains, this is an excellent product if you earn enough to qualify for HSBC Premier.  The high annual fee is offset, at least in Year 1, by a 40,000 Avios points sign-up bonus and 1 Avios per £1 spent.  The card also comes with airport lounge access via LoungeKey.  Similarly, the free HSBC Premier MasterCard is great – you earn 0.5 Avios per £1 on the MasterCard – but meeting the eligibility criteria is tough.

Cards that work for a niche market:

Lloyds Avios Rewards Amex & MasterCard – there are three groups of people who should pay the £24 fee for this card. The first is those with heavy foreign spend, as this is the only UK rewards card which charges a 0% fee on FX transactions. This saves 3% on all your foreign spend.

The second group is solo travellers. If the BA Amex 2-4-1 voucher doesn’t work for you, the upgrade voucher on this card when you spend £7,000 probably will.  You can read more about the upgrade voucher in this article – since the Avios devaluation, it is more valuable than it was.  Importantly, MasterCard spend counts towards the voucher so it is easier to reach the target.

The third group who may benefit from the card are families of three, where two can travel with a BA Amex 2-4-1 voucher and the third using the Lloyds upgrade voucher.

British Airways American Express – the free BA Amex has a decent (for a free card) rate of 1 Avios per £1. However, do not get this card if you are planning to spend the £20,000 required to earn the 2-4-1 voucher – this post explains why.

American Express Platinum – you should seriously consider applying for this card. Don’t focus too much on the £450 fee, as it is refunded pro-rata if you cancel. Focus instead on the 30,000 Avios sign-up bonus, the Priority Pass for airline lounge access, Eurostar lounge access, the Starwood hotels Gold card (which also gets you Marriott Gold following the merger), Hilton Gold, Shangri-La Jade, Melia Rewards Gold and the Club Carlson Gold cards.  Many people find that they end up keeping the card despite their initial intentions because of the value of the travel insurance, lounge access and other perks.

IHG Rewards Club Premium MasterCard – is it worth paying £99 per year for this card, earning 0.4 Avios per £1 (ie 2 IHG Rewards Club points), when the Tesco MasterCard is free and give 0.3 Avios?  Potentially yes, because if you put £10,000 through the card you also get a free night at any IHG hotel potentially worth £250+.  This covers all InterContinental, Crowne Plaza and Holiday Inn hotels globally.  Cardholders also receive IHG Platinum status.  The £99 fee for the first year is offset by the 20,000 IHG points you earn as a special sign-up bonus.

Starwood SPG American Express – the day-to-day earnings rate of 1 Starwood point (= 1 Avios) per £1 isn’t bad and you get the flexibility to convert to 30 different airlines as well, of course, as using your points for Starwood or Marriott hotels.  You also get an enhanced conversion rate of 1.25 Avios per £1 when you convert in chunks of 20,000 points.  The sign-up bonus is 10,000 points, which converts to 10,000 Avios.  The £75 annual fee is refunded pro-rata if you cancel.

Tesco Premium MasterCard – as I explain in this article, this card MAY work for you if you spend £5,000 at Tesco per year, including Tesco Fuel.  This is because you receive 5,000 bonus Clubcard points – 12,400 bonus Avios – for hitting this target.  It is unlikely to work well for other people.

Cards which are not ‘best in class’ in terms of benefits:

Lloyds Choice Rewards Amex & MasterCard – it comes with a £24 fee, but the earnings rate (1 Avios per £1 on the Amex and 0.2 Avios per £1 on the MasterCard) can be beaten by free cards and there is no long-term spending bonus.

IHG Rewards Club MasterCard – this card is OK if you want to earn IHG Rewards Club hotel points, but if your aim is to convert the points into Avios then you are better off with the free Tesco credit card (0.3 Avios per £1) than this one (0.2 Avios per £1).  The only trade offs are that you get IHG Gold status for having the card and the points you earn also count towards your IHG status renewal. There is a sign-up bonus of 2,000 Avios (10,000 IHG points) but that should not influence your decision on the long term value of the card.

Don’t forget that our directory of all UK airline and hotel credit cards can be found here.

PS. If you are a sole trader or run a small business, you may also want to check out the American Express Platinum Business Card and the American Express Gold Business Card.

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.

Get airport lounge access via The Gourmet Society
Bits: Win a stay in a castle for you and 20 guests, cheap Sofitel T5 deals
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.

Comments

  1. If I have purchased flights using my British Airways Premium Plus American Express (or any other Amex for that matter), which I then cancel (as I have hit the £10K spend for 2-4-1 voucher) do I lose the right to Global assist and travel insurance on that booking?

    The T&Cs suggest that: “You may cancel this insurance by cancelling your Card at any time.” but do not refer to losing cover for existing bookings?

    In this case I will probably take out a new Gold Amex, but this is probably irrelevant.

    Any info will be most appreciated.

    • the real harry1 says:

      I think your insurance depends on continued card ownership, it is a benefit of owning the card, not a benefit given on bookings purchased with the card

      IANAL though, just my opinion – happy to be shown to be wrong

      • That would be my understanding too – they’re trying to provide a benefit that encourages customers to continue to hold the card.

  2. Hi,
    Is my reading correct that the offer on HSBC is now: 40000 upon sign up and another 40000 if you spend 12000,- per year?
    Where it reads HSBC account, are first direct (HSBC parent company) ok as well?

    • TGLoyalty says:

      Though 40k HSBC rewards points = 20k Avios

    • You can’t get it through the First Direct accounts as it’s a HSBC Premier exclusive for which you need a minimum of £50k in savings with them or £100k/pa income with investment, mortgage or protection/life insurance.

      The additional 40,000 points (20k Avios) looks to be a one time deal during your first card year if you spend £12k which makes this card best unless you can’t spend £12k or meet the Premier criteria.

  3. Tony Burns says:

    Have used the Tesco card for 15 years or more to collect Avios points. Had many flights and hotel stays.
    Use my IHG card to collect points for hotel stays.

  4. RE Lloyds Avios
    I can’t work this out: If two people are travelling together, with 2 return tickets – can you upgrade one leg for both people? Or is it strictly one way tickets?

Add your comment here:

*