ALL MBNA airline credit cards withdrawn – what are your alternatives?

Last week I ran this article suggesting that you should act immediately if you wanted to apply for any of the MBNA airline credit cards.

It was good advice.

All eight MBNA airline credit cards were pulled on Monday evening.  Slightly surprisingly, this included the new American Airlines card which is only a few months old and which did not have an American Express element.

These are the cards you can no longer get:

Lufthansa Miles & More

Emirates Skywards

Emirates Skywards Elite

Virgin Flying Club White

Virgin Flying Club Black

Etihad Guest

United Airlines MileagePlus

American Airlines AAdvantage

You should NOT assume that these cards will return under a new issuer.

We know that the two Virgin Atlantic cards will return shortly under the Virgin Money banner.  However, I know from some discussions I have had that you should not necessarily expect the other cards to return.  If you think that they are all primed to relaunch next week, you are very wrong.

Two linked events caused this.  The core driver was the European Union cap on interchange fees.  This restricted the fee that payment processors could charge retailers for accepting credit cards to 0.3%.   It is very difficult to run a successful mileage card on this basis.

The second driver was American Express being caught up in the 0.3% cap, even though it was originally expected to be exempt.  American Express decided to pull all of its licensed cards from the market, which means that MBNA, Lloyds, TSB and Barclays had to stop issuing Amex-branded products. (The Lloyds Avios Amex is still being issued but the end is nigh.)

I am a little surprised that the American Airlines card was pulled.  This had already been relaunched without an American Express element.  It combined a chunky fee (£70) with a very high earning rate (1.25 miles per £1 on a Visa).  I thought this might prove sustainable but MBNA clearly had other ideas.

So, overnight, one third of the UK airline and hotel credit and charge card market disappeared.

What are my alternatives?

If you currently hold these cards (I have the Lufthansa ones, my wife has the Virgin ones) they will continue to operate for a while.  Whether that is weeks, months or years I don’t know.

If you had been planning to get one of these cards but never got around to it, here are your options:

Lufthansa Miles & More / American Airlines AAdvantage

American Express Preferred Rewards Gold or American Express Platinum (points convert 2:1 into Starwood Preferred Guest, then 1:1 – or 1:1.25 for larger amounts – into Miles & More or AAdvantage)

or

Starwood Preferred Guest American Express (best choice – points convert 1:1 into Miles & More or AAdvantage, or 1:1.25 for larger amounts)

The only half-decent Visa / MasterCard option is via the IHG Rewards Club MasterCard (0.2 miles per £1, assuming you convert 10,000 IHG points into 2,000 airline miles) or, with the £99 IHG Rewards Club Premium MasterCard, 0.4 miles per £1.

Emirates Skywards

American Express Preferred Rewards Gold or American Express Platinum (points convert 1:1 into Emirates Skywards)

or

Starwood Preferred Guest American Express (points convert 1:1 into Emirates Skywards, or 1:1.25 for larger amounts)

The only half-decent Visa / MasterCard option is via the IHG Rewards Club MasterCard (0.2 miles per £1, assuming you convert 10,000 IHG points into 2,000 airline miles) or, with the £99 IHG Rewards Club Premium MasterCard, 0.4 miles per £1.

Etihad Guest

You can use the Amex Gold, Platinum or Starwood Amex options as per Emirates

or

HSBC Premier MasterCard (0.5 miles per £1) or HSBC Premier World Elite MasterCard (1 mile per £1) – these cards are only available to HSBC Premier current account holders

You can also use the IHG option for a Visa / MasterCard (0.2 or 0.4 miles per £1).

Virgin Flying Club

You can use the Amex Gold, Platinum or Starwood Amex options above as per Emirates

or

Tesco Clubcard MasterCard (0.31 miles per £1) or Tesco Premium MasterCard (0.62 miles per £1)

or

you can also use the IHG option for a Visa / MasterCard outlined above (0.2 or 0.4 miles per £1)

or

wait for new Virgin Money-issued Virgin Flying Club credit cards

United Airlines MileagePlus

You can use the Amex Gold, Platinum or Starwood Amex options above as per Lufthansa / American.  However, because Starwood has a poor transfer rate to United, you should move your Starwood points across to Marriott Rewards and convert from there.  The exact rate will depend on the amount you transfer.

You can also use the IHG option for a Visa / MasterCard (0.2 or 0.4 miles per £1).

Reviews and to apply

Here are my reviews of the cards mentioned above, which also explain the sign-up bonuses available:

American Express Preferred Rewards Gold – review, apply 

American Express Platinum – review, apply 

Starwood Preferred Guest American Express – review, apply 

IHG Rewards Club MasterCard – review, apply 

IHG Rewards Club Premium MasterCard – review, apply 

Tesco Clubcard MasterCard – review, apply 

Tesco Premium MasterCard – review, apply 

HSBC Premier MasterCard – review, apply 

HSBC Premier World Elite MasterCard – review, apply 

Please read this important interest rate information:

Starwood Preferred Guest American Express – representative APR 36.2% variable including fee based on a notional £1200 credit limit

IHG Rewards Club MasterCard – representative APR 18.9% variable

IHG Rewards Club Premium MasterCard – representative APR 41.5% variable including fee based on a notional £1200 credit limit

Tesco Clubcard MasterCard – representative APR 18.9% variable

Tesco Premium MasterCard – representative APR 56.5% variable, including the fee, assuming a £1200 credit limit

HSBC Premier MasterCard – representative APR 18.9% variable

HSBC Premier World Elite MasterCard – representative APR 59.3% variable including fee based on a notional £1200 credit limit

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. Does anyone know how you can view the taxes on Lufthansa flights with a low Miles and more balance? If I enter a journey in, it says I don’t have enough miles and sends me to its ‘mileage calculator’, but this only shows the miles needed for the journey, not the taxes as well.

  2. Does anyone know if the Lufthansa card may be replaced? Surely they’ll have a lot of disgruntled customers in the U.K. that this will affect now?

  3. Hi Rob, what are the best options for United? I looked at the options above, but for the Amex Gold/Platinum I couldn’t see how to convert points into United Miles, and the same for the Starwood. Also, do you know whether there will be a new United card or when current ones will be withdrawn? Cheers.

    • No good option as SPG to United is 2:1. Starwood Amex is best of a bad bunch.

      No idea if a card will return. Some ex MBNA clients (apart from VS) are planning new cards but we could be a year away – and that assumes the maths works.

      Word on the street is that Creation mispriced the IHG card.

      Heard an interesting story this week that cards may start to cap the miles you can earn. Big spenders wreck the economics now – Creation must lose a fortune on the vast slugs of tax, VAT etc I am putting through my wife’s IHG Premium. Tiny interchange fee but buying 2 IHG points per £1 ….

      • Damn – really hope it doesn’t change anytime soon, that would be a disaster!

        Capping is quite common in Oz though, along with fairly hefty card fees and no bonus if returning within 12-24 months – hopefully not a taste of things to come in the UK but I suspect it may be…

    • I’d say Marriott via SPG is the best option. SPG points transfer at 1:3 to Marriott, then Marriott convert across, currently with a 20% bonus – 112,000 Marriott gets 50,000 United. That would mean 37,333 SPG to get 50k United. Personally I’d still value the SPG higher though (£560 vs £375).

      https://www.marriott.com/rewards/usepoints/morerew.mi

      • Fair point, better than SPG direct.

        • Just had a look and Hilton Honors (through Barclaycard) might be a potential option as you can transfer HHonors miles to United? Very disappointed with MBNA’s decision to scrap.

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