Maximise your Avios, air miles and hotel points

Is Lloyds Avios Rewards now the best credit card for FX spend?

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The Lloyds Avios Rewards credit card was a game-changer when it launched in October.  For the first time, we had a credit which offered NO FOREIGN EXCHANGE FEE – AND gave you Avios points for your spending as well!

Historically, it was almost always a bad idea to use a mileage card for overseas spend.  This is because all other miles and points cards – and indeed almost all other UK credit and debit cards – charge a foreign exchange fee of 2.99%.  Most card issuers hide this fee so you don’t realise you are paying it, because they simply adjust their exchange rate by 2.99% rather than breaking the fee out.

The key question, then, is whether or not the Lloyds Avios Rewards card is worth getting.

Which cards charge no FX fees?

There are three main FREE credit cards in the UK which do not charge any fees on overseas transactions:

The Post Office Credit Card – no annual fee, 0% on FX purchases, 2.5% (min £3) cash advance fee on FX cash withdrawals, no cash advance fee when you buy foreign currency at the Post Office.  (Representative APR 17.8% variable, the Post Office credit card is provided by Bank of Ireland UK.)

Halifax Clarity – no annual fee, 0% on FX purchases, no ‘cash advance fee’ on FX cash withdrawals  (representative APR 12.95% variable)

Capital One Classic Extra (low credit limits) – no annual fee, 0% on FX purchase, 3% (min £3) cash advance fee on FX cash withdrawals.  This card also pays 0.5% cashback on all purchases!  You are unlikely to get a credit limit above £1,500 however. (representative APR 34.9% variable)

There is also a Saga card if you over 50.  This has a £2 / 2% cash advance fee but does not charge any interest on cash withdrawals if repaid immediately.  Nationwide also has a ‘no fees’ card but this is only available to its current account holders.  The Santander Zero card, which did perform well, is no longer available to new applicants.

There are also three debit cards worth considering, although you will need to open a current account with the relevant bank which is an added complication.  These are Norwich & Peterborough Building Society, Metro Bank (although they are limiting their ‘free FX’ deal to Europe from March) and Cumberland Building Society.

How does the Lloyd Avios Rewards card compare?

The Lloyds Avios Rewards card comes with a £24 annual fee which makes it worse than the Post Office and Halifax Clarity cards.  There is also a 3% fee on cash withdrawals abroad.

You will, however, receive 1.25 Avios per £1 spent abroad on the Amex card and 0.25 Avios per £1 spent abroad on the MasterCard.  The Post Office and Halifax Clarity cards have no rewards programme.

If you value an Avios at 1p, and assuming your foreign spend is 75% Amex (your hotel will take it) and 25% MasterCard, then the Lloyds Avios Rewards card is a better deal than the Post Office or Halifax cards if you spend over £2,400 abroad each year.

(Why?  Because your £24 annual fee will be offset by the 2,400+ Avios earned back)

Is it ever worth using another credit card abroad and swallowing the 3% fee?

You may not want to go to the trouble of applying for another credit card just for overseas transactions.  You may also want to increase your chance of getting further travel cards by not ‘wasting’ some of your credit score on a ‘no FX fees but no miles’ card.

There are some miles and points cards which are a decent choice for using abroad if you don’t want to go to the trouble of applying for a ‘no FX fees’ card.

The American Express Preferred Rewards Gold card (click for review) gives you double points when you use it abroad.  This means you get 2 Membership Rewards points per £1, which converts to 2 Avios per £1.  This does not fully offset the 2.99% FX fee, but comes close.  Amex’s home page for the card is here.

The free TSB Avios card (click for review) earns double Avios points when used abroad.  This means that Amex card (on the free version) earns 2 Avios per £1 which offsets much of the FX charge.

The IHG Rewards Club Black Visa card (click for review) gives you 4 IHG Rewards Club points per £1 spent abroad.  These can be redeemed for free nights at Crowne Plaza, Holiday Inn, InterContinental etc hotels.  I value these at roughly 0.5p per point, so 2p of value per £1.  This almost offsets the 2.99% FX fee.

Spending abroad also helps you to achieve spending targets

The IHG Rewards Club Black card mentioned above also gives you a free night voucher when you spend £10,000 per year.

The Virgin Atlantic cards offer upgrade vouchers when you hit specific spend thresholds.

And of course the BA Premium Plus Amex gives you a 2-4-1 voucher for Avios redemptions valid in any class when you spend £10,000 per year.

You may find it worthwhile paying the FX fee on your credit card in order to achieve some of your spending target.  After all, for most of us our holiday is one of the main expenditures of the year.


Unless you are struggling to hit an annual spending target, you should seriously consider adding the Post Office, Halifax Clarity or Lloyds Avios Rewards cards to your wallet, purely to use for overseas spending.

If you will spend over £2,400 abroad and are happy to pay the £24 fee, the Lloyds Avios Rewards card is a good choice – otherwise go for the free Post Office or Halifax cards.

Want to earn more points from credit cards? – December 2022 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher for spending £20,000 Read our full review

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

British Airways American Express Premium Plus

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

American Express Preferred Rewards Gold

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

The Platinum Card from American Express

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

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and 1.5 points for every £1 you spend 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:

American Express Business Platinum

40,000 points sign-up bonus and a £200 Amex Travel credit every year Read our full review

American Express Business Gold

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

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa

10,500 points bonus – the most generous Avios Visa for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.

Barclaycard Select Cashback credit card

1% cashback and no annual fee Read our full review

Comments (35)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Worzel says:


    Thank you for your prompt reply clarifying things for me-I hope that Amex are not against rekindling an old relationship!!

    Good luck and thanks again,


  • mike turnbull says:

    Couple of recaps on the Lloyds Avios Card/s
    Double Avios points on the Amex card ONLY (for 6 months)
    0% Interest for 13 months for any purchases made on either card.
    The Avios / Lloyds number is 0845 606 2177….very helpful, the guy I spoke to knew all the ‘Rules’ !
    And don’t try to use it as a cash card…any withdrawals, even if you are in credit, will cost you.

  • Juha says:

    One point that often appears to be overlooked is the different exchange rates used by the different card issuers. When you buy something abroad, the card issuer and not the bank converts your purchase amount into GBP. MasterCard and Visa are generally very close to each other (and both close to the wholesale rate), while Amex has some funny T&Cs on how it calculates FX rates. This may lead to a hidden small FX commission on all Amex cards.

    It is hard to quantify of course whether Amex exchange rates cost you any money and if so how much. You can call Amex to ask for their current exchange rates, and you could then compare that to the MasterCard and Visa rates (which are available online) but I’ve been too lazy so far. It might be something around 0.5%, which is not too bad if you get 1.25 Avios per pound. It is less nice when you already pay a 3% fee however.

    • Andrew says:

      Amex, Visa and MasterCard all publish their exchange rates online. Their rates for EUR/GBP yesterday were:

      Amex 1.197
      Visa 1.194319
      Mastercard 1.216199

      So Amex are actually better than Visa in this example. I’m surprised by how much better the MasterCard rate is. It’s close to 2% better than the Visa one!

      • Juha says:

        You’re right, I found the Amex FX rates after some searching. You need to log into your account first. Checked again for rates, and as of yesterday they show me:
        Amex 1.202 (only three decimal places)
        Visa 1.202500
        MC 1.205280
        The bad Visa rate yesterday must have been an outlier. Looks like Amex is only marginally worse, if at all, than Visa and MC. With my numbers Amex is 0.3% worse than MC with your numbers it is 1.6%, which would be significant. I would discard it as an outlier though.
        Anyone keen to grab a few months’ worth of exchange rate and run a proper comparison?

  • craig says:

    A word of warning for those considering the debit card options – I opened a Norwich & Peterborough account just to use abroad, but there are a number of fees and conditions, like being charged £5/mth if you go overdrawn and having to pay a £5/mth fee unless you fund it with at least £500/mth. In the end I had money going in to avoid the fee and the straight back out with a different standing order, which was just a pain. So avoid unless you want it as your main current account, and even then there are others who don’t charge you for being overdrawn.
    I’m much happier now with the Halifax Clarity card.

  • pauldb says:

    Sorry to go OT but as the PC Visa is mentioned, can anyone shed any light on the voucher issuance:
    I got me card last January 22nd, and passed the target last week. The website now says I will get the voucher 6-8wks )mail or email?) after my next statement, which will be issued about the 9th. I’m not in a rush for the voucher but if it hasn’t arrived can I cancel the card – don’t want to pay the new year’s £99 fee. Is the voucher issued by Barclaycard or IHG: I would think I’m safer if it’s the latter.

    • Thywillbedone says:

      The voucher appeared on my online account with Barclaycard within a week or two IIRC of hitting my target. I booked my redemption of the voucher and accumulated points through the IHG website using the webchat booking system…fairly painless although I was booking three nights at IC Cannes which necessitated (for some reason) three individual bookings…all handled by the same agent though.

    • Rob says:

      Voucher will show online in your IHG Rewards Club account when available.

  • Mark says:

    Exactly. We won’t be taking up the new Aqua card, and will instead by using the Clarity Rewards card which I already have and is also good for ATM withdrawals.

    To be honest you’d have to spend a lot to get much worthwhile at 0.5%. Using Raffles’s example you’d earn £12 per year on £2,400 even if that were possible without exceeding the credit limit. Though we travel for leisure quite a bit we tend to prepay hotels on in sterling for the combination of cash back, reward stays and generous Amex Gold reward points so probably spend less than that in foreign currency transactions.

    Assuming it is split over three or more billing periods in a year with at least £300 spend (which is likely for us) the Clarity Rewards will get a greater return, even though spend over £300 on each statement doesn’t get any extra cash back. It is also credited to the account monthly.

  • hedgie99 says:

    hsbc premier a/c holders get fee-free fx now on cash withdrawals on their debit cards. spending still attracts a fee (2.75%) and the prem mc also attracts a 2.99% fee however

  • Josef says:

    Just found it in T&C for these Lloyds cards:

    “..When you make a Transaction abroad with an American Express Card and the Transaction is not in U.S. dollars, the conversion will be made through U.S. dollars, by converting the Transaction amount into U.S. dollars and then by converting the U.S. dollar amount into sterling. If the Transaction is in U.S. dollars, it will be converted directly into sterling. ”

    I don’t like this …are we still sure that the exchange rate for the Amex is good if I spent lets say in euros?

    • Rob says:

      That is the defacto Amex wording. I have never seen any proof that this leads to a worse situation than you would otherwise be in, because both transfers are done at the inter-bank rate. You may lose literally 0.02% or something but that is it.

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