Credit & Charge Card Reviews (9): Etihad Guest American Express & Visa

This is my review of the Etihad Guest UK credit card.

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.

As with most 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 Tesco Clubcard Mastercard Low Rate card. This has a very attractive representative APR of 5.9% variable – and you can transfer your Clubcard points into Avios or Virgin Flying Club miles.

Key link: Etihad Guest American Express and Visa application form

Key facts: No annual fee

The representative APR is 22.9% variable.

About the card

The Etihad Guest credit cards are issued by MBNA (now part of Lloyds Bank) as a double-pack, with recipients receiving an American Express card 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, American, Miles & More, Emirates and Virgin credit cards, amongst others. If you already hold one of these cards and are refused for the AA card, they will usually change their mind if you ring up and offer to reduce the credit limit on your existing card.

What is the sign-up bonus?

Etihad is offering a sign-up bonus of 5,000 Etihad Guest miles with your first purchase within the first 90 days.

Occasional special offers see this increase to as much as 15,000 miles. The most recent offer ended in June 2017.

Any other benefits?

There are three interesting extra perks which come with the card:

Double miles on Business Class flights purchased on the card within 90 days of account opening

Triple miles on First Class flights purchased on the card within 90 days of account opening

Promotion to Etihad Guest Silver status after one return flight within your first year of card membership – in theory, you must pay for the flight with the card

If you are a regular Etihad flyer in premium classes, the first two benefits may be more valuable to you than the sign-up bonus. The Silver status upgrade is a ‘nice to have’ but is not much use if you are only planning one flight with them.

Interestingly, this is the first card promotion that actually gives you a bonus for flying the airline concerned instead of simply using their card! Someone at Etihad has realised that this card will only appeal to a niche market and has set out to target those people with useful benefits.

Etihad Guest credit card holders receive a free upgrade to the premium level in the Heathrow Rewards shopping programme. This doubles your Heathrow Rewards earning rate to 2 points per £1.

There are two financing offers available as well:

0% interest on all Etihad transactions in your first year

0% interest for six months on balance and money transfers made in the first 90 days (3% fee)

What is the annual fee?

There is no annual fee.

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

Cardholders earn 1.5 Etihad Guest miles per £1 spent on the Amex and 0.75 miles per £1 on the Visa. MBNA has a good reputation in my experience for posting points punctually.

This is a very good earnings rate for a free card – in fact, as good as it gets these days.

Note that you can actually beat the earnings rate on the Visa card (0.75 miles) with the HSBC Premier World Elite MasterCard. That card earns 1 mile per £1 and the miles can be transferred into four airlines, including Etihad. You need to meet the tough financial criteria for HSBC Premier in order to obtain the card, however, and there is a £195 annual fee – offset by a generous bonus in Year 1.

What is an Etihad Guest mile worth?

This is a tricky one, especially from the perspective of someone living in the UK.

Remember that Etihad is not a member of any of the major airline alliances, although it does allow you to redeem on a range of partner airlines.

Following the devaluation in July 2015 you will need according to their calculator 131,928 Etihad Guest miles for a return Business Class flight to Abu Dhabi and 175,465 for First Class. One-way redemptions are available for half price.

Ironically, redemption rates are cheaper when you use American Airlines miles to redeem on Etihad than using Etihad miles directly.

These are marginally more expensive than peak day Avios redemptions. Taxes are lower, however, and Etihad includes its free chauffeur service in Abu Dhabi.  The chauffeur service is no longer free at any other airports which represents another stealth devaluation.

Etihad is also planning a further devaluation later this year as I wrote here.  I can’t recommend starting to build up Etihad Guest miles until the situation is clear.

There are some deals available. Under the old reward chart, I flew a friend from Abu Dhabi to Istanbul, one way, for just 30,000 miles + £13 tax in First Class. That was for a 5 hour flight and included a chauffeur car in Abu Dhabi.

Etihad has a good network of flights from the UK regions with Edinburgh being the latest city added.

Here is my review of flying London to Abu Dhabi in Business Class on the new A380 and Abu Dhabi to London in First Class. It is an impressive package.

Since a UK-based Etihad collector is likely to be comparing the scheme with BA, I am happy to use the same conservative valuation as I do for Avios – 0.75p per mile. On this basis, the 1.5 miles per £1 on the Amex is equivalent to a 1.1% rebate on your spend. The Visa returns 0.55%.

How does this compare to a cashback credit card?

My default comparison card is the ASDA Cashback Credit Card which is free for life and offers 0.5% cashback. The representative APR is 19.9% variable.

On this basis, the American Express card offers value. If you feel that you can get 1p from your miles – and the quality Etihad package, at least on the A380, means that redemptions are a good deal – then the Visa is also worth using.

How else can you earn Etihad Guest miles from a credit card?

There are three alternative ways of earning Etihad Guest miles from your credit card spending:

The American Express Preferred Rewards Gold charge card offers 20,000 Membership Rewards points for signing up and is FREE for the first year. These convert to 20,000 Etihad Guest miles.

The American Express Platinum charge card offers 30,000 Membership Rewards points for signing up. These convert to 30,000 Etihad miles. It has a £450 fee, refunded pro-rata if you cancel.

The Starwood Preferred Guest American Express credit card offers 10,000 Starwood Preferred Guest points for signing up. These convert to 10,000 Etihad miles. It has a £75 fee, refunded pro-rata if you cancel.

Etihad Guest also has family accounts allowing you to pool the miles earned by various people in one pot. This makes it easier to reach the required amount for an award more quickly if other members of your household also take out their own cards.

Conclusion

5,000 miles is an OK sign-up deal for a free airline card.

However, the miles are not much use if you do not have a plan for redeeming them – less easily done with Etihad than with, say, British Airways.

The on-going earning rate is very generous. 1.5 miles per £1 on the Amex is as good as it gets at the moment on any free airline card. The same goes for the Visa at 0.75 miles per £1.

The application form for the Etihad Guest credit cards can be found here.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.