Maximise your Avios, air miles and hotel points

More on the HSBC Premier Mastercard, earning 1 Avios per £1

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I ran a ‘breaking news’ piece yesterday on the changes to the HSBC Premier MasterCard.  Now its time to dig down a bit deeper.

The rewards scheme for the HSBC Premier credit card has generally been weak.  I have a HSBC Premier bank account from my days working there, and never, for a second, considered taking out a credit card.

This is not a totally radical move for HSBC Premier, since it has credit cards in other parts of the world which issue airline miles.  What surprises me, to be honest, is how it has negotiated with British Airways to award Avios points given its existing deals.  Obviously the contracts with Amex and Lloyds are not as tight as I imagined.

Historically, the HSBC Premier rewards scheme gave 1 point for every £5 spent.  This is still the case, with each point now being worth 5 airline miles.  (Do not be confused into thinking that £1 = 1 point = 5 miles – it doesn’t!)

Your points are awarded based on your TOTAL monthly spending, divided by 5.  It doesn’t matter if individual transactions are smaller than £5 or not – I confirmed this today with someone who has the card.  This is different to (and fairer than) the Tesco Mastercard, which gives 1 Clubcard point per £4 but PER TRANSACTION – so a £3.99 spend earns nothing and a £7.99 spend only 1 Clubcard point.

You can transfer your HSBC Premier points into the following airline schemes:

5 Avios per £5 point

5 Asia Miles (the Cathay Pacific scheme) per £5 point

5 Singapore Airlines KrisFlyer miles per £5 point

5 Etihad Guest miles per £5 point

The geographic base of these airlines is, perhaps not surprisingly, a good fit with HSBC’s main business focus these days.  Note the lack of any US partners.

Full details of the airline transfer scheme can be found here.

What is interesting is that the airline miles option is substantially better than their other rewards.

If you take shopping vouchers, for example, you only receive £5 to spend at Boots, Debenhams, M&S, B&Q, Amazon or Sainsbury for every £750 spent.  You are effectively buying Avios points for 0.66p each when you choose Avios over a shopping voucher, which is an excellent deal.

How does this compare to other non-Amex cards?

The main alternative Visa or Mastercard is the Tesco Mastercard.  This offers the equivalent of 0.6 Avios per £1 spent (ie 0.25 Clubcard points).

The HSBC Premier card is clearly better than this by a long way.  However, if you assume a 25% transfer bonus to Avios from Tesco every 18 months, then the difference shrinks sharply – 0.75 Avios per £1 from Tesco vs 1 Avios per £1 from HSBC.

Each route has upsides.  The HSBC Premier card would transfer the Avios each month, whilst with Tesco you’d have to wait for a conversion bonus to get full value.

On the other hand, Tesco has a wide range of alternative partners, and you retain the option of using your Clubcard vouchers for a different deal entirely if a good offer comes along.

Compared to the Lloyds Duo Avios cards, the HSBC Premier card knocks them into a hat.  You earn 500% more Avios than the Lloyds Duo Mastercard and 400% more Avios than the £50-fee Lloyds Premier Duo Mastercard!

Do I qualify for the HSBC Premier credit card?

See here and click on the Eligibility button to trigger a pop-up.

There is no minimum income.  However, to get the HSBC Premier Mastercard, you need a HSBC Premier current account into which you pay your salary.  You must ALSO have £50,000 invested with HSBC, either in a savings account or via an investment product.

Alternatively, if you earn over £100,000, you qualify if you just have a HSBC mortgage or any investment or insurance product.

What is the easiest way to trigger this?

You should note that the credit card is free, and HSBC Premier has a lot of other benefits which may be of value to you.  It comes with travel insurance for the under 70’s, for instance.

There is also NO FEE for a HSBC Premier current account as far as I know (I don’t pay one anyway!) so if you currently pay for a ‘packaged’ current account with another bank you may save money by moving across.

A 1 year fixed rate bond pays 1.4% on £50,000.  The best on the market from a ‘sensible’ institution appears to be 2% from Birmingham Midshires (ie Lloyds).  The gap is £600 of interest per year – £360 after tax – which is a high credit card fee!  This route does not seem to make much sense.

If you earn over £100,000, it is easier.  I’m not sure what the minimum investment is in an ‘investment product’ but I’m sure you could find something which would accept £1,000 or so.  They may even treat ISA’s or fixed rate bonds as ‘investment products’ – the definition is not clear online.

Conclusion

Clearly, this is not a product for everyone.  If you are high earner, though, you may want to take a look – especially as HSBC Premier, and HSBC in general, is well regarded compared to the service levels of the other big banks.


Want to earn more points from credit cards? – June 2021 update

If you are looking to apply for a new credit or charge card, here are our June 2021 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the other top current deals:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and the most generous non-Amex for day to day spending Read our full review

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.

Amex American Express Business Gold card

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

Earn both Avios and BA On Business points with your business spending Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

Comments (30)

  • Rob says:

    I don’t think Amex Gold is worth the £125 fee after year 1 with the current benefits, agreed.

    For the first FREE year, though, I would keep it for the full 12 months. 2 points per £1 on supermarkets, petrol, travel and foreign spend can’t be beat.

    You would also get the 7,500 bonus points on your anniversary if you spend £15,000. Nothing to stop you cancelling after that and getting 90 per cent of your Year 2 fee refunded.

  • Rob says:

    By the way, forget ‘50,000 points gets £200 off your bill’. That is a daft redemption, compared to 50,000 Avios or Virgin miles, 100,000 Hilton points, 25,000 SPG points or 150,000 Club Carlson points. Or even £300 of train tickets via East Coast evouchers.

  • CWK says:

    Can you recommend any other non-Amex credit card which rewards Avios?

    Was thinking about getting a Tesco Mastercard but after reading that it only gives 1 Clubcard in multiples of £4, it doesn’t seem good value. In fact most of my non-Amex spending is under £4 anyway where I usually only buy a coffee and a sandwich or something from non-Amex accepting places such as Costa, Pret, etc.

  • Keith says:

    I had a few points hanging around on my Premier Card and converted them to Avios when you reported this a couple of days ago.

    They arrived in my BAEC account today, along with a 30% bonus. The description states 0% bonus but it is 30%.

    By the way, you can get a Premier Account if you are a director of a company which banks with HSBC.

  • Jon says:

    For HSBC premier with £49.99k it is cheaper to open a 5 yr bond, and break it with 90 days interest penalty after one year. This gets you a better interest rate than the one year bond on its own. It also offers you a chance to lock in rates for longer if rates drop, and if rates rise you can just break the bond with noting extra lost. Currently you can get 1.45% for 1yr done as a 5 year broken bond after 1 year, and get 1.4% done as a simple 1 year bond. There is not that much difference at the moment, but I did it back when interest rates were back at 3.5%, so slightly better.

    The Premier card also offers ‘extended warranty’. Although many cards offer this, only HSBC includes accidental damage to your product for 3 whole years. Especially for laptops this is exceptional value, as 3yr accidental damage standalone policy would cost £hundreds. (and you get avios!). Travel insurance is not great. Excludes about every existing condition.

  • George says:

    Barclays has an equivalent Premier customer tier for their personal banking with similar entry criteria. I wonder if they will follow suit with an avios Barclaycard in the UK. I generally find UK Barclaycards quite poor value with not many exciting rewards, but a direct competitor to the HSBC card could trigger some interesting products in the future!

  • HSBC (UK) Premier MasterCard rewards now transfer to BA, CX, EY and SQ - FlyerTalk Forums says:

    […] very well covered in Raffles' own blog last week: https://headforpoints.com/2013/10…1-avios-per-1/ As well as the current 30% promo running alongside: […]

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