Should you dump your free BA Amex for the new Amex Rewards card? Possibly.

Yes, you read that right.  If you have the free British Airways American Express card, I think you should consider dropping it for the new American Express Rewards Credit Card (“ARCC”).

I wrote about the American Express Rewards Credit Card yesterday (click here) – you may want to read that article first if you missed it.

Let me explain why the ARCC card may be better for you than the free BA card.

Do you spend £20,000 per year on your free BA Amex card?

I have long argued that no-one should have the free BA Amex card if they intend to trigger the 2-4-1 voucher for spending £20,000.

This HFP article explains my thinking in detail.

In summary, though:

The 241 voucher is only valid for one year, instead of two years for the BA Premium Plus voucher, which is a major issue if you want to book seats 355 days in advance!

The £10,000 of ‘extra’ spending required to trigger the voucher (£20,000 compared to £10,000 on the Premium Plus card) could be directed elsewhere, triggering sign-up bonuses on other cards

You earn an extra 0.5 Avios per £1 spent, which offsets much of the £195 annual fee on the Premium Plus card

If you spend £20,000 per year on the free BA Amex card, I strongly – very strongly – suggest upgrading to the Premium Plus card.

(You need to call Amex to do this and you won’t get any bonus for doing so, but it is worth it.  Your card year remains the same, and if you have already spent £10,000 this card year on the free card then your 2-4-1 companion voucher is triggered immediately.)

If you spend between £10,000 and £20,000 per year, so you don’t trigger a voucher at the moment but would with the Premium Plus card, it also logically makes sense to switch.

The only reason to have the free British Airways American Express card is if you spend LESS than £10,000 per year.  You don’t spend enough to earn a 2-4-1 voucher but you appreciate the high Avios earning rate.

Except ……

What if you don’t spend £10,000 per year on your free British Airways American Express card?

I know that a lot of people don’t spend large amounts on their free BA Amex card.  They don’t trigger the 2-4-1 companion voucher BUT they like earning 1 Avios for every £1 they spend.

If this is you, you are now better off with the new American Express Rewards Credit Card.

Amex Rewards Credit Card

What is the American Express Rewards Credit Card?

ARCC is a standard Amex-branded credit card.  It has no annual fee and no substantial benefits, except for the ability to collect Membership Rewards points at 1 point per £1 spent.

There are three versions of the card available:

LOW RATE – 5,000 Membership Rewards points bonus and a representative APR of 9.9% variable (click here)

or

BASIC – 10,000 Membership Rewards points bonus and a representative APR of 22.9% variable (click here)

or

PURCHASES – NO sign-up bonus but 0% APR on purchases for 18 months and a representative APR of 22.9% variable beyond that (click here)

The first two cards require a £500 (5,000 points version) or £1,000 (10,000 points version) spend within three months to trigger the bonus.

You will not get the sign-up bonus if you have had a Gold or Platinum Amex card – or any other Amex card which gives Membership Rewards points – in the last six months.  You can still apply for the card, however.

Why is the Amex Rewards Credit Card better than the free BA Amex card for low spenders?

Here’s the interesting bit:

The free British Airways American Express card earns 1 Avios per £1 spent

The free Amex Rewards Credit Card earns 1 Membership Rewards point per £1 spent.  These transfer 1:1 into Avios points if that is what you choose to do.

What you get with the ARCC card is flexibility.

Yes, you can use your points for Avios.  You can send them over to BA via the Amex website and they will arrive within 48 hours.

However, you have other options.  Membership Rewards points can also be sent to Virgin Atlantic, Flying Blue, Emirates, Etihad, Delta among other airline partners.  You can also send them to Hilton Honors (1:2), Starwood Preferred Guest (2:1) and Club Carlson (1:3).  You can convert them to Eurostar Frequent Traveller / Club Eurostar (15:1).  You can even use them for shopping vouchers.  You can see the airline partners here.

The new ARCC card gives you more choice.  You can still take Avios if you want, and at the same 1 Avios per £1 earning rate.  If you suddenly decide that you want hotel points, or that Virgin Atlantic miles make more sense, or even that you want to abandon Avios altogether, you can.  Simply move your Amex points somewhere else instead.

With the free BA Amex card, your points are sitting in Avios from Day 1 and you can’t do anything else with them.  If Avios devalues its rewards, if BA stops flying your preferred route, if reward availability suddenly gets a lot harder to find, if Reward Flight Saver fees jump up, if new surcharges get added ….. you’re stuck.

Swapping to the Amex Rewards Credit Card gives you more control over your points.

The only good reason NOT to drop your free BA Amex is that having the ARCC card means that you cannot get a sign-up bonus on an Amex Gold or Amex Platinum card at the same time.  On the other hand, once you have gone six months without the free BA Amex, you would be able to apply for either of the two BA cards again, purely to earn a sign-up bonus.

Conclusion

There are now good reasons for EVERY holder of the free British Airways American Express card to reconsider.

If you spend over £20,000 on the free card to trigger the 241 voucher, I think you’re making a mistake as my old article here explains

For lower spenders, who aren’t bothered about the 241 voucher, I now believe that the Amex Rewards Credit Card offers a compelling alternative

Even better, two versions of the FREE ARCC card – Low Rate and Basic – offer an attractive sign-up bonus if you haven’t had a Gold or Platinum American Express charge card in the last six months.

If you go for the ‘Purchases’ versionyou will also get 18 months interest free credit on everything you buy.

If you go for the ‘Low Rate’ version, you will be paying a representative APR of 9.9% variable.  This is far cheaper than the free British Airways Amex card which charges a whopping representative APR of 22.9% variable.  (Although, if you do pay interest on your credit card, you should get the Tesco Clubcard Low Rate MasterCard instead and pay a representative APR of just 5.95% variable whilst earning Avios via Clubcard points.)

Something to think about …..

PS.  Why is Amex putting its BA relationship at risk by offering a better card?  Simple.  As this card is not a co-brand card, Amex can charge its full interchange fee to shops.  The BA Amex falls under the EU caps on interchange fees, which means that Amex can charge a maximum of 0.3%.  It now has a big incentive to encourage people to move away from the BA, Starwood and Nectar co-brand cards onto its own products.

(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 financial products 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. Dave Barron says:

    OT – Has anyone got any experience of balance transferring from a BA Amex Card to another provider? I’ve had the free BA card for a year or two and have always paid in full each month. However I now have a £2k balance which will probably take me 3 or 4 months to clear. I have a Sainsbury’s Bank Visa with a promotional 0% rate however they couldn’t transfer a balance from Amex stating that they can only do so with cards which use the faster payment service (over the phone I gave them the first 6 digits of my Amex card number and they said not possible for that account!). I have a M&S Card and a Halifax Card I could try but want to know from H4P readers first what’s likely to succeed? I’d rather avoid a few hundred pounds of interest if I can! Thanks in advance.

    • I’ve done this recently with a Barclaycard (the Hilton one to be precise) and I believe a while ago with a Tesco card. The Tesco one might have been a transfer out of the old MBNA Diamond Club card so don’t quote me on that though!

      Barclaycard definitely worked absolutely fine though.

    • I’ve previously BT an Amex card to Barclaycard. Had to talk to two operators as yes – they seemed to have issues with Amex Card Number

  2. Michael Jennings says:

    I have recently transferred a balance from a Gold Rewards Amex Charge card to an MBNA balance transfer card. It may be that things are different for a BA Amex, but I can’t see why they would be.

  3. “The BA Amex falls under the EU caps on interchange fees, which means that Amex can charge a maximum of 0.3%.”

    Rob – is this now confirmed? Your previous coverage of this regarding a legal note from an EU judge was not legally binding for Amex. Interested to know if the advice was taken on by the UK court and Amex-issued cards now fall in the same legal bracket as e.g., MBNA-issued Amex cards.

    Mark

    • Agreed – I don’t think the Court of Justice has actually ruled on this. All there currently appears to be is an advisory opinion from the Advocate General. In the usual course that means the CJEU will take that into account in reaching its decision, but they are not bound to follow it. The UK courts would no doubt follow the ruling provided by the CJEU in so far as the issue depends on a interpretation of EU law, but the CJEU have not provided any such ruling yet (unless I have missed it).

  4. o/t – is it better to fly in Business Class on a BA 777 aircraft or a 747 aircraft to New York? I’ve only tried the 747 and normally love being in the upper deck cabin as its more private. What are people’s own opinions and favourites?

  5. 1 thing to notice though, ba amex is 4/5 rounding, amex rewards always rounds down. if you purchase something for 1.6GBP, you get 2 avios from ba card, but 1 reward point from amex rewards, plus there are some ba specific offers only available on ba amex card.

  6. What about the ARCC versus the Lloyds Avios cards? I would be really interested in people’s thoughts.

    • You get no welcome bonus from Lloyds but higher earning rate plus no FX charge. Cash back if you also have Lloyds current account.
      But I don’t understand all these comparisons between cards; have both!

    • It’s a good card and worth having. Most people will offset the £24 fee by the FX savings abroad and the upgrade voucher works well, especially for solo travellers.

      • Thanks! I have both cards, and was thinking about moving Amex spend on to the ARCC. My question is whether you think the flexibility of Amex reward points offsets the extra 0.25 Avios on the Lloyds Amex. I would be really interested in your thoughts.

  7. I know BA uses a 747 on some of its Chicago flights. Is there any way way of finding out which flights it operates on?

  8. Anyone got a 6000 bonus when upgrading from free BA Amex to BAPP recently?

  9. OT – I’m about to trigger my companion voucher and wondered two things:
    1) Am I right in thinking that if I book with the companion voucher and subsequently cancel both tickets I’ll get all of the Avios and the voucher back, as well as all of the taxes etc. But there is a cancellation fee of… £50? And are some of the surcharges kept?
    2) Am I able to combine this with the Lloyd’s upgrade voucher? I’d ideally use that to get my return in business class and then 2-4-1 that booking. That sounds too good to be true…

    • 1) Cancelation is £35 per person (or cash component, whatever is lower), and you will get Avios and voucher back. I cancelled a regular redemption and Avios were returned almost instantly, not sure what the timescale is for the 2-4-1.
      2) Doubt it, but if it works then do report back!!!

    • 2) no – one is booked via BA and the other via Avios so cannot be combined.

      • Thanks both! Shame re 2).

        One other random thought… Does the expiry date reset on the companion voucher after cancellation? Thinking if it was a week before the expiry date I could just book flights, wait a couple of weeks then cancel… Do I then get a whole 2 years more for £70? Again… Sounds too good to be true!

  10. O/T just received my 9000 avios prize for the avis/iberia giveaway, didnt really think it would come through so a very nice surprise 🙂

    • 10k for me.. Happy Bunny.

      • the real harry1 says:

        possibly should have taken those codes I culled from the internet just a bit further, got quite a few big wins but worried I’d end up in some Spanish jail… 🙂

  11. I guess the poor retailer has no choice re. Amex interchange fees…either they accept Amex or they don’t, and if they do, they have to accept all Amex charges, high (BA)or low, the non co brand card…..quite confusing for them ?

  12. I tried to cancel my BA Premium Card let year because the fee went up to £190 but was told I would lose my 2-4-1 vouchers as I had to pay the tax with a BA Amex Card. I stupidly believed them, but have now got a free BA Amex in its place. Robs (as usual brilliant) article suggests dumping the BA fee card for this new one but why not keep both ?

  13. do i still get 18months at zero % interest if i had another membership rewards card in the past 6 months ? the amex website isn’t clear

  14. MARCELO C CORREA says:

    One point to note is that considering your credit score, having a credit card is better than having a charge card, as charge cards don’t have utilisation rate. For people that has only BA as a credit card, it should consider this into the equation too.