Maximise your Avios, air miles and hotel points

Part 1: The two new Lloyds Avios Rewards cards – my review

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

For the first time, I have dedicated all three posts today to the same topic – the new Lloyds Avios credit cards.  They have a couple of unique features which need to be explained fully, and that means multiple posts!  The bottom line, though, is that these cards will – for a lot of people – be a ‘must have’.  Although not necessarily as a main card ….

This post will focus on a general overview.

Lloyds Bank unveiled an overhaul of its Avios-earning credit cards yesterday.  It is ‘goodbye’ to the old Duo credit cards, although the free version is still available via TSB.  You will remember that these came in two versions – free and with a £50 fee.  The difference was the Avios earnings rate and a 2-4-1 voucher (economy flights only) on the £50 card.

These two cards have been replaced by the Lloyds Bank Avios Rewards Credit Card (home page here) and the Lloyds Bank Premier Avios Rewards Credit Card (home page here).  Here is my review.

To cause extra confusion, Lloyds launched a third card yesterday – the Choice Card – which also offers Avios as a redemption option.  I will focus on the Choice Card tomorrow.  Do not apply for anything until you’ve read about all three cards!

Lloyds Avios Rewards 2

Here is a quick summary of the changes on the new Avios cards compared to the old cards:

There is no longer a free Avios earning card from Lloyds.  The basic card has a £24 fee.  The ‘Premier’ card has a whopping £140 fee.

You can still get the free version of the ‘old’ Avios Duo cards by applying via TSB.  Here is the link.  For simplicity, I won’t discuss this card again in this article.  Everything I say refers only to the new Lloyds cards.

Both cards come as a double pack of an American Express and a MasterCard

The earnings rates are improved over the old cards.  The Premier card (£140) offers 1.5 miles per £1 on the Amex and 0.3 Avios per £1 on the MasterCard.  The basic card (£24) offers 1.25 miles per £1 on the Amex and 0.25 Avios per £1 on the MasterCard.

No foreign transaction fees.  This could be a game changer, and I will discuss it in more detail in a separate post.  Never before has a mainstream UK reward card, of any sort, offered to waive the 3% foreign exchange fee.

Double Avios points on the Amex card for the first six months.  This is instead of a sign-up bonus.  This is capped at £2,500 of spending per month.

Flight upgrade voucher when you spend £7,000 (£24 card) or £5,000 (£140 card)Post 3 today looks at the terms and conditions attached to this voucher, and whether it is worth aiming for.

A 2-4-1 voucher when you spend £12,000 per year on the £140 card.  This is valid ONLY on Economy class bookings.  It is valid on British Airways, Flybe, Aer Lingus, Monarch, American Airlines, Air Malta and Aurigny, plus Eurostar.

0% on purchases for the first 13 months.  This means that, if you choose not to repay your balance in full, you will not incur any interest.  You will still need to make the minimum 1% monthly repayment, though.

So, should you get either of these cards?

You should read my other two posts today, to fully understand the ‘no foreign exchange fees’ and ‘flight upgrade voucher’ rules, before carrying on reading here.

Question 1:  Do I recommend the £24 card (Lloyds Avios Rewards) ?

Yes, I do.

If you can answer ‘Yes’ to any of these questions then I think this card is worth adding to your wallet.

Do you spend over £800 per year on your credit card outside the UK?

If so, then get this card.  The foreign exchange fees on any other credit or debit card are 3%, whilst this card is 0%.  Spend over £800 and you are in ‘profit’ as your saving on FX fees has covered the £24 fee.

Do you spend over £2,000 per year outside the UK on a ‘no FX fees’ credit card?

If you already have a card with no foreign exchange fee, like the Post Office MasterCard, it may be worth switching as this card also earns Avios points.  The break-even point is around £2,000 of foreign spend.  Put that through the Post Office card and you earn 0 Avios.  Put that through the Lloyds Avios Rewards card and you get 2,500 Avios points which justifies the £24 fee.

Do you travel on your own?

The biggest issue with the 2-4-1 voucher on the British Airways Amex card is that it requires two people to travel.  For solo travellers, the voucher that comes with the Lloyds Avios Rewards card is better, as you can upgrade both legs of one flight.  You might find the Avios Rewards card a better choice than the BA Amex.

Are you a heavy Amex spender (up to £2,500 per month)?

If so, get this card, at least for the first year.  You get double Avios on your Amex spend for the first 6 months, on up to £2,500 per month.  That is 2.5 Avios per £1, which is 1 Avios per £1 more than the British Airways Premium Plus Amex.  The additional Avios will easily cover your £24 fee.

Question 2:  Do I recommend the £140 card (Lloyds Premier Avios Rewards)?

In general, ‘No’.

Let’s compare the £140 card to the £24 card:

  • Both cards offer the ‘no foreign exchange fees’ benefit, so there is no need to pay for the expensive card
  • The difference in earnings rate is minimal (1.5 vs 1.25 Avios per £1 on the Amex)
  • The MasterCard earnings rate is a joke on both cards – 0.3 per £1 and 0.25 per £1 – and you would be substantially better off using a cashback card or the Amazon MasterCard (1% back) instead
  • Both cards offer the ‘upgrade’ voucher, and the difference in spend required is only £2,000
  • I do not value the 2-4-1 voucher highly

The key, of course, is the last point.  I do not value a 2-4-1 voucher which is only valid on Economy redemptions.  Long-haul Economy redemptions are generally a waste of Avios points, and short-haul redemptions mean that you do not save much from the voucher given the £12,000 of spend required.  My personal view is that you are better off with the BA Premium Plus 2-4-1 voucher which is valid in ALL travel classes.

Let’s compare the £140 Lloyds Premier Avios Rewards card to the £150 BA Premium Plus Amex:

  • The BA Premium Plus (BAPP) Amex does have a 3% FX fee, but you can escape that by getting the cheaper £24 Lloyds Avios Rewards card and using that just for foreign spend
  • The BAPP Amex has the same earnings rate
  • The BAPP Amex has a £10 higher fee
  • The BAPP Amex does not have the ‘upgrade’ voucher, but this is also available via the £24 Lloyds Avios Rewards card
  • The 2-4-1 voucher with the BAPP Amex is valid in ALL travel classes.  This offers a saving of up to 300,000 Avios (First Class return to Australia) and realistically 100,000+ Avios if used for a Club World return.

As you can see, the 2-4-1 voucher – and the ability to use it in premium classes – is the deal breaker.

What will you do Raffles?

The ‘no foreign exchange fee’ benefit is a huge one for me, a game changer.  My gut feeling, at this point, is that I will apply for the £24 Lloyds Avios Rewards cards and use it purely for overseas spend.  (For the first six months, whilst it offers double Avios, I may put other spend through it as well).

I have no interest in the Lloyds Premier Avios Rewards card.  The £140 fee is not justified by the additional benefits, in my view.

I will retain my British Airways Premium Plus Amex and I will ensure that I continue to spend £10,000 on it each year to trigger the 2-4-1 voucher.  I will continue to use these for premium class redemptions.

Your comments

I know that there is a huge amount to take in across these three posts today.  It is also possible that there are some intricacies to these cards that I have not yet picked up on.  Please share your thoughts and questions below.

(To see our complete list of all current credit card bonuses, click here to visit our ‘Credit Cards Update’ page or use the link in the menu bar at the top of the page.)

Comments (63)

  • callum says:

    “Never before has a UK reward card, of any sort, offered to waive the 3% foreign exchange fee”

    The Aqua reward card and Halifax Clarity reward does. Neither provide cash back on foreign spend though so this could still be better.

    • Roger says:

      Callum: which part of ‘UK REWARD card’ don’t you understand? 😉

      James: it DOES. Mine does, and I use it exclusively outside the UK. 🙂

      • Roger says:

        Sorry, perhaps, but Raffles was probably thinking of ‘Rewards’ being miles or points rather than a discount. I do anyway.

    • callum says:

      Sorry my mistake. I regret using my Clarity instead of Aqua card abroad so much now!

      Roger – I understand it perfectly well thank you very much… I suggest you consult a dictionary to get the definition of “reward” though. From other posts raffles has made in response to people pointing out these cards, it seems like he was genuinely unaware of them and wasn’t restricting it to miles and points cards only.

    • Andrew (@andrewseftel) says:

      The Aqua most certainly does pay 3% on foreign spend – I barely used it in the UK last year.

  • Trevor says:

    I’m glad the beast is out the bag for those of us waiting to see what Lloyds would offer. Thanks, Raffles, for such a details explanation across 3 posts!

    Having now read all posts, all comments, the flyertalk thread and had some time to contemplate it, if you can stand Lloyds notoriously bad service and frequent stuff-ups, then this isn’t a bad offering, though no marvel either.

    The points I am considering:

    Opening bonus: It sounds ok to get double points, and to take advantage of it all the way auto-qualifies you for the upgrade voucher, even the 2-4-1 on the premium, but is it worth it? While Lloyds are also known for low credit limits, many may find they can’t even reach a £2.5k target per month, though by paying money into the account through the month, this is possible to circumvent. So let’s say you get the maximum 18,750 Avios “bonus” disguised as double-points in the form of £1 spend targets. You can’t really count the original 18,750 earned, as you’d get that anyway for the spend, on this card or at least that on many others. And on that point, with many readers hanging onto their old BMI cards, a number of us can earn at least 2 Avios/£1 with no effort or special bonus. The difference of 0.75 Avios/£1 therefore reduces the effective bonus of this offer to only 11,250 Avios. Not such a fancy bonus now, is it, and for a spend of £15k??? You could trigger 7 x £2k spend targets for that amount of money on a number of other cards to net, say, 7 x 15k bonuses (just a thumb-suck average, in reality it could be more with the likes of the Amex Plat offering 35k bonuses!) = 105,000 Avios. So by itself, the double-points bonus is very weak.

    Upgrade voucher: With a family of 4 and normally travelling together long-haul, this isn’t worth much to me.

    2-4-1 voucher: Opposing Raffles’ views, I think this is worth something if taking out the premium card. I would rather pay economy taxes and charges for a family of 4, despite getting better value per Avios when redeeming the BAPP 2-4-1 in premium cabins. But what makes the BAPP “better value” is because BA charges in economy are so high already and you can’t use it elsewhere – it is therefore its own restrictions that give that sense of upgrade value. This 2-4-1 is available for redemption on other airlines (Flybe, Aer Lingus, Monarch, American Airlines, Air Malta and Aurigny, plus Eurostar) which charge far less in fees, so suddenly economy redemptions using a 2-4-1 have become a lot better value for money/avios! An economy redemption LHR-JFK return using 40k Avios and BAPP 2-4-1 would cost you £716 (staggering!), but an AA redemption using the Lloyds 2-4-1 would possibly cost £242! The 2-4-1 has just increased its value by nearly £500! But since the 2-4-1 is only bookable on avios.com which doesn’t show AA as an option, how do you book these?

    Free FX fee: This is a definite game changer, as remarked, to earn points and save on FX, but would you be able to put all your foreign spend through on your Amex? Unlilely, so you are hardly going to recover your card fee this way. Its benefits are therefore very much determined by your personal trips and usage, leaving it, for some, no better than other 0% FX load cards.

    So, some definite enhancements, though not outstanding, but how much does it take to entice back disgruntled customers who currently can’t even apply!

  • Nick says:

    I’ve had a think about these new Lloyds cards and I have to say that I’m really underwhelmed. The prizes for reaching the spending thresholds are lame and the 6 months of bonus avios is not as good as most sign-up offers. Unless I’m missing something, the mastercards are not even as good as the free Tesco Clubcard.

    The zero currency charges is good but in general not worth going through the hassle of dealing with Lloyds for, as I already have a (free) Zero card. I get that it doesn’t accrue avios but I spend maybe £500 a year abroad, and for me the max 1,250 avios < £24+dealing with Lloyds. I would have to spend thousands a year abroad before it was worth going through the hassle of signing up for a card (especially with Lloyds). I can see that it's different if you didn't already have a card that waived the FX fee.

    The only reason I'd have for taking one out has nothing to do with Avios – I want a card with an interest-free period because I'm buying a car and it's a cheap way to finance it, but Lloyds credit limits are so measly that it wouldn't really help.

    So despite my initial excitement, my wallet will be staying the same. Amex Gold PR for supermarkets and travel; BA PP for everything else; Tesco clubcard for Screwfix and other daft places that don't take Amex yet; and Santander Zero for foreign spending.

    • Gill says:

      I have a BMI visa that I use for generating Avios on non AMEX spend. Since this is no longer available for new customers is the Lloyds one now the best card to use at outlets that don’t accept AMEX.

      • Rob says:

        No, the Tesco card is better, and it is free.

        However, the upgrade vouchers etc may make the Lloyds card more interesting, but only if you are sure you’d use them.

  • Rob says:

    I am responsible for that! I emailed my contact there yesterday, as they were still showing the Duo link. The text is still wrong, though ….