New credit card and City Centre lounge access? Virgin Money makes a Virgin Atlantic deal

Virgin Money made an interesting annoucement yesterday regarding a new partnership with Virgin Atlantic.

It was suitably vague, but clearly important enough to justify a press release and inclusion on their website here.

The only hard facts are:

The new partnership will offer customers “a range of benefits, including Flying Club miles and Virgin Group discounts”

and

“Collaboration on new financial products will begin in early 2018”

It “will offer customers a range of Virgin Atlantic benefits, as well as the advantages of being a Virgin Money customer including access to Virgin Money Lounges and a range of Virgin Group company discounts.”

Virgin Money

What could happen here?

The first thing worth noting is that Virgin Money already has a close relationship with Virgin Atlantic’s Flying Club.

We often write about the generous offers available for opening a stocks and shares ISA with Virgin Money – until 31st July, you’ll receive 8,000 Flying Club miles, as per this page.

They also did a trial of a money transfer offer which earned 3,000 miles – we wrote about it here – although this deal isn’t currently running.

Slightly oddly, you can also apply for the Virgin Atlantic credit cards via the Virgin Money website – even though the cards are issued by MBNA and not Virgin Money, and Virgin Money is basically persuading people not to apply for its own products!

So …. this is what I think will happen:

MBNA’s licence to issue American Express credit cards has ended, so the Virgin Flying Club credit cards will need to be relaunched anyway when the current contract expires.  I am assuming that MBNA loses this contract which will be a blow, as it must be many times the size of their United, Lufthansa, Etihad or Emirates deals.  I imagine Virgin Money will become the new issuer of a Visa-only or MasterCard-only Virgin Flying Club credit card.

A Flying Club angle – perhaps a reduced level of mileage earning – will be added to the Virgin Money 0% FX fees credit card (see here)

The Virgin Money ISA deals will continue

The Virgin Money International Money Transfer offer will return

The Virgin Money Prepaid Travel Money MasterCard will gain a mileage angle

Moneycorp will be dropped as Flying Club’s mileage earning foreign exchange partner and replaced by Virgin Money, who offer home delivery or pick-up at Virgin Money branches (expect to see a counter opening in the Heathrow and Gatwick lounges)

Here is a wilder guess:  I reckon Virgin Atlantic status cardholders will be allowed to use Virgin Money lounges even if they don’t have a Virgin Money product

I stress that all of the above is speculation on my part. I would be surprised if there was anything done with current accounts or mortgages – these have never been successfully linked to loyalty schemes in the past due to low margins and/or a core focus on price rather than rewards.

Tell me more about Virgin Money lounges …..

These are surprisingly pleasant.  As I have a Virgin Money ISA, I get access and you will occasionally find me working out of the one in Piccadilly.  It is halfway between my house and the HFP office and makes a good base before or after a West End meeting.

Here is a 2014 article I wrote on it.

This is quite a novel idea.  They are, basically, like very pleasant airport lounges.  They are more leisure focussed than the Regus business centre lounges I have discussed on here before – you don’t get a piano at Regus!  Neither is Regus open at the weekend – the Virgin lounges are open seven days a week.

You can visit if you have any sort of account with Virgin Money, although you need to register in advance here.  On your first visit, they will (on sight of photo ID and proof of your account) give you an access card.  You can bring in guests without problems.

Note that these are NOT bank branches.  You cannot undertake banking services even if you want to, and there is absolutely no attempt to sell you anything whilst you are there.

This is main relaxation area at Piccadilly. There is a piano (!) behind where I stood, plus some board games!  Coffee, tea, soft drinks and biscuits are free and self serve.  Click to enlarge:

Virgin Money lounge London

This is the ‘library’ bit.  In an impressive move, you can take an iPad from the shelf and use it for browsing whilst in the lounge.  (There is also free wi-fi for your own devices.)  There are 2 Macs as well as you can see, along with newspapers and magazines.

Virgin Money lounge London 2

Here is the oddest bit.  Here are a pair of fully functioning Virgin Upper Class seats!  The clever bit is that the TV monitor has been replaced with an iPad, so you can turn the seat into a bed and surf away to your hearts content!

Virgin Money lounge London 3

It is not a bad perk.  If Virgin Money begins to issue the Virgin Atlantic credit cards then cardholders would get access anyway, but I wouldn’t be surprised if – as part of this new partnership – Virgin Atlantic Gold, and possibly Silver, status card holders are allowed in anyway from 2018. Let’s see.

(Want to earn more Virgin Flying Club miles?  Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)

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Comments

  1. Would it be worth applying for the Virgin card with MBNA before they pull it ?

    • the real harry1 says:

      sure- and the Amex should still be working during this year’s Shop Small, you’ll clearly get a few months’ notice the card is getting cancelled

      • the_real_a says:

        Well… When the BMI card was cancelled, we were given 30 days notice – the letter arrived a week late. Transactions had to settle on the account before the end of the 30 days, so purchases needed to be made 5 working days before the closure date. So all in all I had about 14 days notice!

        • Andrew (@andrewseftel) says:

          It kept working for purchases though, just not earning miles.

    • Mr Cristian Saunders says:

      When will it end… Has a date been given?

  2. Alcatti says:

    Low margins on the mortgage!?

    These days, 2/3 of mortgages are done via the mortgage brokers who charge half a thousand.

    On top of that, the lender pays 0.3-0.4% of the loan amount to the broker.

    This is understandable because the brokers/intermediaries perform processing tasks and effectively, being FCA-regulated, they authenticate the documents for the banks.

    It is quite difficult to work with the bank on a mortgage directly (unless you know your local branch and outside of a busy populated area). Even to schedule an appointment is a one-two week affair.

    • Alcatti says:

      That said, if the lenders find ways to facilitate mortgage process, make it easier and workable for people, then there a decent margin to be had, which can be shared in terms of rewards/loyalty schemes.

      • Mr Dee says:

        Agree, there isn’t a real reason why things can’t be easier and save on the parties involved, it will take time but I am sure things will eventually get more streamlined.

    • Andrew says:

      There is no difficulty whatsoever in working directly with a bank for a mortgage. That’s just a tall tale put around by mortgage brokers who want to earn commission.

      They then layer their commission with the “If you don’t use xxx solicitors or yyy valuers” it’ll hold up the transaction. Worst of all is the brokers referred by new build developers.

      • Alcatti says:

        Try schedule an appointment to sit down with an advisor in London.

        From Guardian (can’t insert a link): “As recently as 2012, most mortgages were taken out directly from a bank or building society. Yet fast forward a couple of years and a combination of fewer bank and building society branches, a growing loss of faith in many banks’ ability to give sound advice and, more recently, more complex rules around taking out a mortgage, mean just over 60% home loans are now taken out through a broker.”

        • Complete tosh. I got a FTB mortgage direct last year, no hassle at all, everything was quick and easy, approved instantly, great communication back to me. In fact far less messing around than anyone I know who’s ever used a broker.

          I’m not super rich, just a normal mortgage for a normal flat.

          And last time I checked, Ealing was in London.

          • Alcatti says:

            No mortgage is “approved instantly”.

            Agreement in principal – that is easy and instant. Full mortgage application can be done over the phone, and one might even get the preliminary OK from the automated credit scoring. After that, the application with the underwrites 1-2 weeks minimum.

      • Peter K says:

        I don’t live anywhere near London but it took about 2 weeks to get an appointment in our nearest branch…or a little sooner if I travelled 45 mins away.

        It’s not just a mortgage broker thing but a bank thing in reality. That having been said, it was easier to work with a broker. It’s the same FCA rules they work by but the bank did things to the Nth degree whereas the broker was much more lax.

        • pauldb says:

          There are also, genuinely, mortgage products out there which aren’t offered directly because the speciality lender can’t justify the FCA. Approvals are also tighter, so for many going to one broker saves hassle/repetition. Many bank branches can’t justify having an adviser as the conversions aren’t high enough. It doesn’t seem like a desirable structure to me though either.

          • True, and there are some situations where brokers are very useful. Just not my case, I’m very glad I didn’t use one. But I’m smart (ish) and knew what I was doing.

            Nationwide has either an adviser in branch (as in my case) or a live video link to specialists in HQ. So you can apply in almost any branch.

            In my case they said ‘assuming nothing changes it’s approved and will confirm in a week’. And it did. They got a fantastic and well deserved 5* review in their survey afterwards.

          • Alcatti says:

            I can confirm two things,

            1. Getting a mortgage interview became easier than in the past, as lenders started to use the online video interview platforms. But do not expect to get things done in one session.

            2. The lenders do use and exploit their perceived monopolistic position, e.g., if you apply directly to the lender you are more likely to be quoted the rate worse than the market.

            If your mortgage is specialised, then the headline rates disappear for you.

            It is counterintuitive but I believe that approaching the lender directly signals predisposition to them (whichever the reason) and the lender does exploit that.

        • Alcatti says:

          Typically, with the banks mortgage advisor you end up bickering over each item of your outgoings. That is to the n-th degree.

          They also end up listing each and every open credit card account (can be a hassle for us, at HFP) and disclose the balance in the last 30 days. This is regardless that the same information will be pulled from the credit record and will be more accurate than a customer’s recollection.

          • They glanced at one month’s bank statement and payslip, didn’t look at either for more than 30 seconds. I started explaining about my multiple credit cards (both points and 0% BT offset in savings accounts) and she said ‘don’t care, don’t need to know that’. If they checked balances it was entirely from credit report. They did check savings statements to prove source of deposit. I was a bit upset I didn’t get grilled about restaurants, phone, supermarket and other outgoings, I’d gone prepared with answers!

            Are you a mortgage broker by any chance?

          • Alcatti says:

            I’ve read all your responses above, Nick. I thought that checking three months worth of payslips and statements is a standard though, not one month.

            Nationwide has always been good, and I suppose getting better. If you have a long-term relationship with them I suppose that helps.

            Santander/Halifax — both require the exact list of credit accounts/balances and detailed review of outgoings.

            No, not a mortgage broker.

  3. Rob, you can already get access to the lounges if the only product you have is the Virgin Atlantic card, not sure if that’s clear but the article suggests that would only become a perk once VM issue it?

    Also, the Sheffield lounge does have a branch which you can access from the loung. Although it is technically “next door”, there is an internal joining door.

    • Can you? I never knew that. How can you register if you are not on the Virgin Money database?

      • I’ve seen people try to get in with a VAA MBNA card while I was there – the staff seemed to have switched from saying they weren’t entitled to just letting them in rather than disappoint/argue with them.

        Virgin Money lounge access isn’t much of a perk when anybody can open an account with a £1 balance. I went off them a bit when on two different visits the lounge was being used by customers at nearby tables to sell pyramid schemes to victims they had invited to ‘meetings’ as guests. I’d rather it was explicitly a leisure lounge rather than them encourage people to think of it as a meeting space.

        • It’s obviously a perk, it just isn’t a perk restricted to high value customers.

          • Yes, I meant it isn’t much of a perk for VAA status holders if they could otherwise get it by putting £1 into a bank account

      • My OH went into the lounge and just asked to register there, took her Driving License and VS CC and that was all!

        • pepperpot80 says:

          Another data point – I only hold the VS CC. I registered online after application and only had to show my driving licence and credit card on arrival at the Haymarket lounge. I don’t use it often but it’s a nice option if I’m in central London for an hour or so.

  4. JamesB says:

    I would guess your speculation on the lounges is headed in the wrong direction. Given how crowded they can be and the difficulty of getting access at times it seems more likely that entry will be restricted to customers with appreciable business than open to those who maintain unused cards or accounts purely for lounge access.

    • How would you define “appreciable business”?

      • ‘Appreciable business’ means little in banking. The £75 fee on an unused credit card will generate more profit than £100,000 in a competitive savings account.

        • Genghis says:

          £250 at BOE over the year vs £70 income? costs on a savings account + share of OHs etc cannot be materially more than a credit card

          • JamesB says:

            @Genghis 10,000 nectar points for £350 Sainsbury spend On their credit card, left a comment on yesterday’s bits post around midnight.

          • Saw this on MSE. Compared to 20k Nectar for nothing on the Amex Nectar card ….

          • Indeed, the Sainsbury’s spend requirement was too high for me, I only shop there occasionally. Need to spend some Nectar points at Pizza Express though!

          • Genghis says:

            Thanks @JamesB. Will take a look.

          • JamesB says:

            @Rob, why have one or the other when you can have both? 31 months interest free so can tie to a curve, withdraw and save £200/month in regular saver @5% returns £165 before card needs to be repaid. Cannot do that with the amex. If using ATM at Sainsbury’s might that go through as Sainsbury spend on the card? If so then another 4800 nectar points per year. Taking things to the extreme I know but perhaps possibilities for some although I guess most of us using 5% regular savers already.

          • Given there’ll be a Curve prefix on the ATM transaction I doubt it would go through as Sainsbury’s spend. If you can meet the spend requirements agree its worth a look though.

        • JamesB says:

          Seriously? Are you saying the banks cannot make more than £1075 a year from a £100000 deposit at 1%? I would have imagined they were doing a whole lot better than that.

          • You’ve never worked for a bank then. Fees go straight to the profit and loss account. Loan income has to be offset by the increased capital ratios required by regulators plus loss provisions etc.

        • Andrew (@andrewseftel) says:

          @JamesB: Banks are in many cases doing better than that, but it’s the wrong optic. Value of a savings account is essentially lower cost of funds relative to the next cheapest form of funding. There is a ton of cheap money flowing around – banks aren’t particularly constrained by funding at the moment.

          A £100000 deposit at BOE probably does dilute operational costs sufficiently to be good business. A ‘competitive’ savings account in Rob’s example, less likely. VM in particular is a low-margin bank – they do mortgages and predominantly-0% credit cards. No overdrafts or personal loans to bump up revenue yield.

          • JamesB says:

            Banking 101 today, hardly a day goes past I don’t learn something new at HFP, thanks guys :)

          • pauldb says:

            Indeed, a growing bank like VM can currently fund as much as it can eat from the Term Funding Scheme at base rate. They specifically said yesterday they are preferring that option to deposits – it increases their average funding costs over below-base-rate deposits, but once the op costs/effort are factored in deposits clearly don’t appeal.

      • JamesB says:

        As an example, HSBC limits on who can apply for the premium products.

        • Yes, but the Virgin Lounges are not really a premium perk. Since most people are at work during the hours they are open, they are generally a drop-in centre for the self-employed like myself and the retired. It is quite a smart move to keep the OAP market happy, since they generally have the highest level of savings.

          • JamesB says:

            Ok, I get your point. Thinking about it, it’s not just the lounges. Last year I popped into a branch and whilst they were doing some paperwork for me the offered me tea or coffee and some biscuits while I waited. Every other high street bank just keeps you waiting at the counter or to see somebody at a desk.

          • Lounges are clever in that they give the appearance of luxury but must be cheaper rent-wise than an extra branch when they are in office space (like Eagle Place) rather than retail space.
            I remember when Eagle Place opened, the fridges were stocked with Cokes etc. Sadly, for a cold drinker, they didn’t take long to get rid of all that and have jugs of cheap cordial. :)

  5. Andrew (@andrewseftel) says:

    I wonder whether Virgin Money will do something similar to the Manchester United tie-up where there is a specific plastic and some minor perks, but no particular ‘Manchester United card’.

  6. Thanks for this. I have just opened an easy access savings account to ge access, though I have the Virgin Atlantic credit card, so this may not have been necessary!

  7. guesswho2000 says:

    “I would be surprised if there was anything done with current accounts or mortgages – these have never been successfully linked to loyalty schemes in the past due to low margins and/or a core focus on price rather than rewards.”

    I don’t disagree, but interestingly in Australia, NAB/Virgin Australia have previously offered a small fortune in Velocity miles with mortgages, so it’s not unheard of on a global level, at least. http://www.pointhacks.com.au/deals/deal/news-just-in-nab-offering-250000-bonus-velocity-points-for-new-home-loans-over-250k

    • Tesco give Clubcard points on mortgages, but I would be very wary of promoting such an offer given the scale of the financial commitment. It definitely isn’t something you should do just for miles!

    • NAB were doing it with qantas points around about this time last year too.

  8. It’d be infinitely more useful if VS status would give you access to Virgin Trains lounges! After all say you’re a weekly Edinburgh – London business traveller but your company has an economy only travel policy you’d find BA attractive as you could reach silver but with the train there’s no concept of status and so you’re unable to gain access to the lounge unless you pay for an upgrade yourself.

    • JamesB says:

      It would only end up with the same problem as the airport lounges … overcrowding.

    • TGLoyalty says:

      buy another cheap short hop first ticket just for access?

  9. OT but would like to hear other people experience on this.

    I got the Hilton status challenge till end of next weekend. So far I got 5 stays (paid by myself) shown in my HHonor account. However I also got a biz function stay (paid by company directly).

    I am wonderibg whether the company paid one will be considered as part of HHonor status challenge stay as this didn’t show as a stay within the HHonors summary page although it has been recorded?

    My original plan is to do 2 stays mattres run in order to obtain the HHonors diamond status rather than 3 night stays.

    • Genghis says:

      Are you saying the stay has happened? Even my stay a few weeks ago where another organisation paid the bill (but my HH no added to booking on check in) was classed as a stay

  10. Roger I* says:

    From Rob:
    We often write about the generous offers available for opening a stocks and shares ISA with Virgin Money – until 31st July, you’ll receive 8,000 Flying Club miles, as per this page.

    From the VM T+Cs:
    1. This offer is open to Virgin Atlantic Flying Club members who open a new Virgin Money Stocks and Shares ISA from 23 May 2017 to 31 July 2017 inclusive. This offer is not available to Virgin Atlantic Flying Club members who make a payment into an existing Virgin Money Stocks and Shares ISA.

    Just checking. Mrs Roger and I bought VM ISAs for 2016/17 and both received miles. Is it safe to assume that we would qualify for bonus miles by opening new 2017/18 ISAs? Thanks.

    • Genghis says:

      Yes. Assuming you’ve not paid into an existing ISA this tax year

      • Roger I* says:

        Thanks. Now to do some checking on value, results etc.

        • the real harry1 says:

          there’s not a lot to check – Virgin play a very straight bat with low costs etc

          if you’re going for drip feed / pound cost averaging into the lowest risk category, ie the 6x £100 option, you are highly unlkely to get a safer, lower cost option anywhere else – with an £80 buffer against market downturn

          any other investment choice, ie 6x £100 into a higher risk investment category or the lump sum option into any category – here past performance is absolutely no guide to future performance & neither would it be time well-spent comparing Virgin to other providers

          all IMHO etc :)

          point being that you are presumably investing for 6 months only – if not, then compare & contrast/ research as much as you like but I think you’d be wasting the points opportunity, which (almost) guarantees a good outcome if you go for 6x £100 into lowest risk choice

          • Nick M says:

            I wouldn’t say Virgin are particularly low cost – 1% AMC is not competitive…

            However, as Harry says – if you are only looking at £100 x 6 for the miles, it is a completely different calculation

  11. Optimus Prime says:

    OT – Amex seems to start changing T&C’s to discourage churning: https://www.americanexpress.com/us/credit-cards/personal-card-application/terms/delta-gold-credit-card/26129-10-0/?print

    “If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit the welcome bonus to, we may freeze the welcome bonus credited to, or we may take away the welcome bonus from your account. We may also cancel this Card account and other Card accounts you may have with us.”

    • Genghis says:

      In US it’s been like that for a while I believe

    • When did that appear? Does it apply to something issued by Delta or is that unrelated?

    • That’s in the USA though. They have much bigger sign up bonuses and made that change many months ago…

    • AIcatti says:

      They can at any time extend the window of eligibility for a new bonus from 6 months to 12 or 24 months.

  12. Darren says:

    OT,
    Re: Tesco Clubcard, anyone know when Tesco clubcard transferred points will appear in my BA account? Looks like they are enroute.

  13. In all my years of reading HfPs this must win the prize for most boring comments section ever….

    • ankomonkey says:

      You must have missed Nick’s comment about his disappointment at not being “grilled” about his restaurant spend.

    • Alistair Todd says:

      I scrolled up and started reading to see what you meant…..

      You weren’t joking and I regret my decision!

  14. Does anyone know if I can convert my tesco clubcard vouchers to someone else’s VS flying club account? My wife is 3000 miles short for a redemption and our tesco vouchers are in my name…..

    • It shouldn’t be a problem. I have converted family members vouchers into my accounts before when they have spare. (Avios however) Try £2.50 if it works okay, then try a larger amount.

  15. So could it be possible that the MBNA Virgin Atlantic AMEX Black Card is pulled? What would that mean for current holders of the card?

  16. Am looking to transfer my Tesco voucher to Flying Club miles. Do they always give 10% bonus?