Credit & Charge Card Reviews (17): Lufthansa Miles & More American Express & Visa

This is my review of the Lufthansa Miles & More UK credit cards.

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.

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: Lufthansa Miles & More credit cards application form

Key facts: No annual fee

The representative APR is 22.9% variable.

About the card

The Lufthansa Miles & More credit cards – issued by MBNA (now part of Lloyds Bank, but still run separately) – come as a double-pack of an American Express 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, Etihad, Emirates, American Airlines and Virgin credit cards, amongst others. If you already hold one of these cards and are refused for the Miles & More card, they will often change their mind if you ring up and offer to reduce the credit limit on your existing card.  They do not appear to be counting any Lloyds cards you have, despite the change of ownership.

Whilst I tend to refer to this card as ‘the Lufthansa card’, Miles & More is technically the loyalty programme for a number of airlines, some owned by Lufthansa (Swiss, Austrian, Eurowings, Brussels Airlines) and some which are not (LOT, Croatian, Adria, Luxair).

What is the sign-up bonus?

The current offer is 1,500 miles, triggered with your first purchase.

Occasional bonus offers see the bonus rise as high as 10,000 miles. The last bonus ended in December 2016.

Any other benefits?

You earn 33% bonus miles for the first six months. This could have some value if you are a heavy spender.

Even more important than earning miles, in my view, is that having the card and using it at least once a month stops your Miles & More miles from expiring.

If you are a base level M&M member, your miles will expire three years after you earn them whether or not you have credited miles to your account in the meantime. This is a particularly mean and nasty expiry policy. British Airways, for example, simply requires that you credit 1 Avios to your account every three years to keep all your miles active.

I had the M&M card for a couple of year before I gained M&M status, and it was purely for this reason – to safeguard my 100k or so miles. Note that you need to have had the card for three months before your miles are protected.  I have it again at the moment and have been paying my HMRC bills with the Visa.

Miles More credit cards review

Is there an annual fee?

No, there is no fee.

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

You earn 1.5 miles per £1 spent on the Amex card and 0.75 miles on the Visa.

This is at the high end of what you can earn on any miles credit card these days, especially the 0.75 miles on the Visa. It is especially generous for a free card (free Avios MasterCard or Visa cards earn 0.2 – 0.3 points per £1) and, to be honest, I have some concerns about whether this rate is sustainable under the new EU merchant fee caps.

What is a Miles & More mile worth?

This is clearly a ‘finger in the air’ exercise. I would, however, flag some key pointers.

M&M miles are useless for short-haul. Lufthansa taxes are so high that they are usually, amazingly, higher than the cost of a cash ticket! (This happens because LH massages the taxes figure on cash tickets on short-haul routes so that its fares match competitors. On redemption tickets, you are hit with the full whack.) How does 35,000 miles plus £130 of taxes for an Economy ticket from London to Berlin sound? Appalling, I imagine, given that BA only wants 8,000 – 9,000 miles and £35 taxes.

As with British Airways, long haul economy redemptions are also very poor value due to the high taxes imposed.

Long-haul premium cabin redemptions are more in line with BA’s taxes and the number of miles needed is often a bit lower, especially as children aged 2-11 get a 25% discount on their tickets.

The real benefit is availability, which in business is often far better than BA, especially during British school holidays. Lufthansa Senator (Gold) cardholders also get a 50% miles discount for a 2nd ticket on the same flight. This benefit can be used an unlimited number of times.

Lufthansa also has an excellent First Class product. The First Class Terminal / First Class Lounges in Frankfurt are amongst the best in the world (including private car transfer to and from the steps of your plane).  Here is my 2017 review of the First Class Terminal and the Lufthansa First Class in-flight service.

Miles & More members also get decent access to Lufthansa First Class redemptions – far better than Star Alliance partners. Note, though, that Swiss First Class redemptions are no longer available to anyone except Miles & More elite members.

Lufthansa runs monthly mileage sales which have some attractive bargains. Intra-Europe flights have been as low as 5,000 miles – although the high taxes still need to be paid.

I am happy to value Miles & More miles at my standard 0.75p valuation. The best value is in Business Class redemptions. First Class reward seats carry a disproportionate premium – although Lufthansa First Class is an exceptional experience – and economy rewards are pointless due to the taxes.

If you can redeem during the monthly ‘mileage sales’, you will receive an even better deal. These cover a lot of destinations but you do need to travel during the following six weeks or so.

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.

The Miles & More credit card is substantially more generous than this, even on the Visa card.

However, the sheer number of points needed for a long-haul redemption in Business or First Class – the only redemptions worth bothering with because of the taxes – means that this card is of little long-term use if you do not fly with Star Alliance and collect the bulk of your miles that way. The only exception would be if you had substantial amounts of credit card spend.

Other points to note

You need to apply a scarcity factor to Miles & More miles. They are not an American Express Membership Rewards partner and there are relatively few large-scale ways other than flying for a UK resident to earn miles. You can get 500 here, 250 there from a hotel stay or Heathrow Rewards conversion, but these are not the serious numbers required for a worthwhile redemption.

Lufthansa has even scrapped the sale of miles, so you can’t top up your account easily even if you are willing to pay.

If you have 120,000 miles in your account with no flying planned, and want to get to 140,000 for 2 business class tickets to India, the credit card would be a more cost effective way of earning them than converting hotel points.

That said, one way of getting a slug of Miles & More miles cheaply is via the Starwood Preferred Guest American Express card. This offers a sign-up bonus of 10,000 Starwood points which convert to 10,000 Miles & More miles.

You can also indirectly earn M&M miles via the Starwood Amex at the effective rate of 1 mile per £1, or 1.25 miles per £1 if you convert your SPG points in 20,000 point chunks to get the 5,000 mile bonus.

Conclusion

A bonus of 1,500 miles is neither here nor there, to be honest. It isn’t worth signing up just to get it.

The additional 33% miles bonus that you receive for the first six months does have real value on top of whatever sign-up bonus you get.

The on-going earnings rate is also very strong. 1.5 miles per £1 is as good as it gets in the current market for a free American Express airline card. 0.75 per £1 on the Visa is also very good. The fact that using the card stops your Miles & More miles expiring if you have no status also adds value.

The application form for the Lufthansa Miles & More American Express and Visa cards can be found here.

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.

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Comments

  1. The miles are not useless for short haul. You can pay the fees and taxes with additional miles and then the cash price is zero. You cannot do with this BA.
    Also for short haul they reduce the miles needed if there are redemption seats in the two weeks before the flight and they often do have availability.
    Putting these together I could get a short haul return flight to UK from Helsinki in two days time for 35,000 miles and zero cash.
    LH also don’t price each part of a reward with a connection separately and (this might not be believable for UK readers) it’s possible to have 30 minute connections at places like Munich and at this time of year they don’t close the airport when there is 2cm of snow unlike in the UK.

    • Hi Richard,

      Interesting post! Could you elaborate on the connections? Is it like a stopover?

      • All true, but most people don’t book short haul redemptions 2 weeks in advance.

        Using miles to pay the taxes is also, effectively, just selling LH your miles at a poor rate and you’d be better holding them for a long-haul redemption where you get real value.

        Connections – LH prices point to point, so a ticket from London to Geneva costs the same irrespective of whether you fly SWISS direct or fly Lufthansa with a connection in Frankfurt. That doesn’t (for a UK resident living near Heathrow) make LH better than BA, however, because BA already flies to all of these places directly so you don’t need to mess about with connections! It may be beneficial if you live outside London and would otherwise use more Avios for a BA connection to a short-haul flight at Heathrow.

        • RussellH says:

          Yes, we got return flights MAN to Dresden in June for 30 000 miles and zero cash. Maybe not the greatest value in absolute terms, but not at all bad when you have a total of around 32 000 miles in total and not much chance of getting many more, which was my partner’s situation. I was a little better off, but even though I used to fly LH at least a couple of times a year, the flights that they provided to the National Tourist Office were always in a class that that earned no miles at all.
          🙂

        • Just one point – I would caution on saying “most people’ don’t book short-haul redemptions two weeks in advance” – and the idea of this being of relevance.
          A significant number of people use their points/miles badly – indeed this is the raison d’être for HFP in the eyes of some readers, so what most people do is not necessarily what the smart people do.
          Plus the arguments of everyone being different.

          The bulk of my flights are short haul, the bulk are booked less than 2 weeks in advance, and therefore the bulk of my redemptions are too. Indeed, some of the best leverage I can get out of miles is by using them last minute when prices are high. If I had the luxury of knowing when I wanted to travel long in advance, I’d use cash on short-haul which is generally cheap if booked long in advance.

        • “most people don’t book short haul redemptions 2 weeks in advance” – whether you do this also depends on the availability. When I used to earn a lot of LH miles I would always book redemptions two weeks in advance since they almost always had availability. At worst I would end up having to book a business class redemption 2 weeks in advance for the same points as an economy booking 6 months in advance.

  2. Richard is spot on regarding paying miles for taxes. I recall I’ve chosen to buy less tickets for miles, but instead paying by miles for taxes for as many family members as possible due to the fact that the value you get for a mile while paying taxes is substantially higher than when you pay with miles for the ticket itself.

  3. Hi Rob,

    Minor correction: these articles shouldn’t say MBNA (Bank of America), since the LBG transaction was completed in June 2017

    Source:
    http://otp.investis.com/clients/uk/lloyds_banking_group/rns/regulatory-story.aspx?cid=1273&newsid=878699

  4. Rob, just one correction: Lloyds bought MBNA last year from Bank of America and the transaction was finished last June.

  5. Have this card, haven’t used it over a year.
    Got 17k M&M to expire end of Dec.
    Will I prevent their expiry by starting to use card every month from now on? Or will this only protect miles earned now (I. E. Not it the past)?

    • Does protect old miles but I think you need to have it for 3 months before it kicks in.

      You may need to transfer them to Heathrow Rewards instead.

  6. Are there any referral bonuses for the card currently going on? I am happy to be referred when you have a minute. Thanks

  7. What is the best way to book M&M redemptions? online? or through the call centre?
    If cancelled, what is the penalty & do we get the miles back? How about monthly bargains? what is the catch?

  8. Aviosgirl says:

    Thanks for the post. A very good option for short haul flights is to redeem the M&M points via Eurowings. I had some great bargains flights to Germany that way..