On 31st August, the very long-term relationship between Travelex and BA / Avios came to an end. This partnership has been going for years, and was deep enough for Travelex to have occasional built-in FX booths inside BA lounges, including Terminal 5 at Heathrow.
(Very long term miles collectors will remember a crazy promo that Travelex ran in 2005. They offered 3 BA Miles for every £1 you spent on Travellers Cheques. Foolishly, they forgot to exclude Sterling Travellers Cheques. They also forgot that Gatwick offered Travellers Cheques for a flat fee of £3 rather than the usual 1.5% commission.
This is what you did. You withdrew £3,000 in cash from the bank. You popped down to Gatwick. You bought £3,000 of Sterling Travellers Cheques for £3,003. You pocketed 9,000 BA Miles. You paid the travellers cheques into your bank account the next day. You repeated as many times as you wanted. Fun times!)
Anyway, back to the point! Travelex has now been replaced by American Express Currency Exchange, and this is now the only way to earn Avios points on foreign currency.
(OK. Technically that is not true. You can still collect 1 BAA WorldPoint for every £10 you exchange at Travelex at Heathrow and other BAA airports. However, that only earns you 10% of the Avios you would get for changing the same sum at Amex.)
Clearly, as anyone who has ever checked the exchange rates will know, buying currency as the airport is almost always a bad deal unless you pre-order. Only buy currency at the airport without pre-ordering if you are using someone elses money!
With American Express Currency Exchange, you earn 1 Avios point per £1 exchanged. This is the same rate that Travelex offered. (Amex also offers 1 Virgin Flying Club mile per £1 as an alternative.)
The downside to the Amex switch is location. According to this website, Amex Currency Exchange offices can only be found at Heathrow, Glasgow, Edinburgh and Birmingham. Virgin Flying Club gets around this by also partnering with Moneycorp, which fills the gap at Gatwick. The Avios deal is just with Amex, however. Tough luck for BA flyers out of Gatwick!
Travelex was infamous for offering poorer exhange rates on its micro-site for BA customers than it was for the general public.
Let’s take a quick look at the cost of buying $1,000 pre-ordered. Please note that I did these sums a couple of weeks ago so do not try to compare them with any rate you see today.
At the time of doing my research, pre-ordering online for airport collection via the BA portal cost £631. Interestingly, using the Amex / Virgin website (processed by Moneycorp), it came to £638.
The main Travelex consumer website was charging £631, so (at least for pre-ordering) there is no difference. However, if the old batravelmoney.com website was still going, it would have come out higher than £631!
For comparison with other options for buying currency, the moneysavingexpert.com tool showed the cheapest delivered cost to be £626. Ironically, this is via Moneycorp who charged £638 via the Virgin Atlantic portal.
This small experiment shows that, actually, as long as you pre-order the Amex Currency Exchange offer is not a bad deal. For $1,000, you would be earning 631 Avios and only paying £5 more than the cheapest alternative, with the added advantage of not having to wait around at home or work for a currency delivery – you collect at the airport instead.
Meanwhile, a final word on why you shouldn’t buy at the airport with no pre-order. The day after I did the calculations above, I was at Heathrow T5. Travelex was selling US$ at a shocking rate of 1.458, meaning that your $1,000 would cost you a scary £686 … £48 more than you would have paid for pre-ordering! If you are spending your own money, avoid buying at the airport (without pre-ordering) at all costs.