Maximise your Avios, air miles and hotel points

What credit card should I use to pay for my holiday?

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By the time you read this article, I will be back in London.  However, as I edit this article, I am still sitting in Dubai pondering how to pay the hotel bill.

It’s not that I can’t afford it – I was more concerned with which ‘miles and points’ credit card I should use to settle the bill!  I thought I would run through my thinking.

UK Rewards credit and charge cards

There was a MASSIVE shift in the market last October when Lloyds introduced the Lloyds Avios Rewards credit card (representative APR 22.7% variable, including fee).  For the first time in the UK, we had a credit card with NO foreign exchange fees (saving you 3% compared to 99% of UK credit cards) and gave you reward points at the same time.

There is a £24 fee on the Lloyd Avios Rewards card, but if you spend more than £2,000 abroad then the Avios earned will offset the fee.  Alternatively, there are some great free cards with no FX fees such as the Bank of Ireland UK-issued Post Office card (representative APR 17.8% variable).

However, for one reason or another, I never got around to applying for either.  I simply have too much plastic already.  Our hotel room this week is also being paid for on points, so our spending will be lower than usual.

Comparing the options

Here is what my wife and I have in our wallets and what we would get for every £1,000 of foreign spend:

American Express Platinum – would earn me 1,000 Membership Rewards points per £1,000. Good for 1,000 Avios or a variety of hotel schemes.  I am not short of Membership Rewards points at the moment, however, so the marginal value of another 1,000 is modest.

British Airways American Express Premium Plus (representative APR 56.4% variable including fee) – would earn me 1,500 Avios.  My new British Airways Amex card year started in February, so I am working towards my new 2-4-1 voucher.  A bit of overseas spending would certainly help.  However, I have a huge pile of Avios so, again, another 1,500 per £1000 doesn’t add much.

Priority Club Black Visa  (not available again until June) – As I wrote recently, I have just successfully applied for this card again.  The Priority Club Black card earns 2 points per £1, but you get double points for foreign spend.  Given that I value IHG points at 0.5p, that would be the equivalent of 2% back.  We only have about 300,000 Priority Club points between us, so the points we would earn are more meaningful.

More importantly, the Priority Club Black Visa has a ‘free night certificate’ which is triggered when you spend £10,000 on the card.  If I used that at the InterContinental in Paris, London or Cannes (not unlikely) I’d be getting at least £250 of value from the voucher.

bmi Platinum MasterCard (no longer available to new applicants) – would earn me 2,500 Avios per £1000 spent. I have the old-style version which pays 2.5 miles per £1.

Tesco Clubcard MasterCard (representative APR 18.9% variable) – would me earn me a poor 250 Clubcard points per £1000 of spending.

Marriott Rewards MasterCard (representative APR 16.9% variable) – this card does offer double points for foreign spend.  However, the earnings rate is so poor that even then I would only get 2,000 Marriott points, worth about £10, for every £1000 of foreign spending.  Not worth it given that I need to pay the 3% foreign exchange fee.

Starwood Preferred Guest American Express card (representative APR 36.2% variable) – would earn me 1 SPG point per £1 spent.  There is no bonus for foreign spend or for staying in a Starwood hotel, so no additional perks for using it abroad.  SPG points convert to airline miles at a 1 : 1.25 ratio based on converting 20,000 at a time.

House of Fraser Mastercard (representative APR 19.9% variable) – a card my wife has. It is not bad, paying 1% cashback in House of Fraser vouchers. We would therefore get £10 back per £1000 of spending if we used this card.

NatWest MasterCard (no longer available to new applicants) – my wife also has one of these, it pays out in useless YourPoints worth about 0.5p per £1 spent. I can’t even be bothered to work out how little I would get!

What did I decide?

On the face of it, it seems to be a toss-up between the British Airways Premium Plus, the bmi Platinum MasterCard and the Priority Club Black Visa.

In no case, of course, do the direct benefits offset the 3% foreign exchange fee I have to pay – I am fully aware of this.  However, the spend we do would help push me towards my next 2-4-1 voucher on the Premium Plus Amex or the free night voucher on the Priority Club Black Visa.  This nudges them ahead of the bmi card, despite it paying 2.5 Avios per £1!

Because of the double points for foreign spend on the Priority Club Black card, I think it just wins.  I will have no trouble hitting the £10,000 target on my BA Amex via UK domestic spending, so I might as well take the foreign spend bonus on the Priority Club card.

I will also make a mental note to ensure that one of us gets a ‘no FX fees’ card before our next overseas holiday where we will not be getting our accommodation for free …..

Want to earn more points from credit cards? – August 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.

EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.

British Airways BA Premium Plus American Express Amex credit card

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 Amex Gold

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

60,000 points, £200 travel credit 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 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:

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

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 card

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 (3% on business travel for four months) and no annual fee Read our full review

Comments (38)

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

  • oyster says:

    Have only just got myself the Post Office credit card just for personal spend overseas. It’s going to feel ‘unrewarding’ using it for spend so I have to try and convince myself that somehow I’m getting Avios on it.
    Let me see; 3% saving on a £1,000 spend is £30. For £30 I could buy 4545 Avios from BA.
    So net result is approx 4.5 Avios per £ – beats all the ‘reward’ cards.

    • Sandgrounder says:

      You can buy Avios for .66p each? Put me down for 100k! For starters!

      • liam says:

        £31 per 1000 avios when purchased through BA. No? Or are you referring to earning through flying?

        • oyster says:

          Yes – maths fail there!.
          But with the ‘saved’ £29.50 on a £1,000 spend I could buy 7 Visa gift cards from Tesco which would earn me 1050 Clubcard points and hence 2520 Avios plus £1.85 in change. (plus right now you’ll also get 14p off a litre of fuel for that spend which could be worth a further £8+). Invest that saved £8 in 2 more Visa gift cards and you’re up to 3240 Avios.

          And I forgot to add the credit card Avios. So for 9 gift cards it’s a further 970 Avios using an Amex Gold.

          Grand sum of 4210 Avios for a £1,000 foreign spend.

          Now I need to get back to my proper job!

          • avidsaver says:

            Sorry but how do you buy 7 visa gift cards at Tesco for £29.50? The 3v’s cost £25 each
            and the fee carrying Visa Gift cards cost either £25 of £50 each PLUS the fee! Or am I missing something here?

          • Andrew S says:

            I think he iis talking about the visa card with the 3.95fee that can be used anywhere.

          • avidsaver says:

            Many thanks Andrew S. I understand now!!!!

  • ADS says:

    I use the Halifax Clarity card for my overseas spending. I also take out cash on this card – and then pay it off the next day to avoid immediate interest payments. I need to clear any outstanding balance as well – but if there’s a month between foreign trips, and I take cash out at the start of my trip, it works out ok.

    • whitenoise says:

      Indeed the Halifax Clarity is the card I use abroad as well. If I withdraw money from the card whilst abroad, I don’t worry about paying it off until I come back. While there is no fee for cash withdrawals, you get charged 12.9% APR on this, including if you pay it back in full. However this works out at around £1/month per £100 withdrawn, so isn’t worth worrying about 🙂

    • Andrew says:

      Another thumbs up for the Halifax Clarity card. Hundreds of pounds of spend + paying balance off ASAP = commission of a few pennies.

  • Jason says:

    If you use Amex in the US do you still get charged the 3% fee.
    I used Amex to pay a Disney cruise bill last year and there was no 3% fee.

  • Vardster says:

    I too have the Halifax Clarity Card. If I take cash out abroad and pay it off the next day does it save the 12.9% APR?

    • Andrew S says:

      Yes it does

      I recently had a weekend away and took a few hundred euro`s out of the ATM and settled the hotel bill with the clarity card. Returned home, waited for the transactions to apply to the account (this takes upto a week) and set up a bank transfer (“pay a bill”) for the full amount.

      Was charged about 80p interest. The cash advance charge % is annual.. Mind you i have a perfect credit score and only managed an APR of 20%, so dont assume you will get accepted at 12%

  • George says:

    I recently faced the same question and I decided to go with the Amex Gold, because it triggers triple points on the combination of travel and foreign spend. Settling my Malta stay at the Corinthia triggered the triple points bonus. I don’t consider me either MR- or Avios-rich, so it made sense to get the most of it. Had I had the BMI card, I think I might have gone for that one though…

    • rakehey says:

      I use the Amex Gold too for all foreign spend (including hotels booked in this country that are charged in foreign currency). Seems best deal for getting avios to me…

  • Sandgrounder says:

    I have a Citi current account, no reward points but having accounts in three currencies, good travel insurance and an interest free overdraft for no charge is a great deal. I have to thank another reader who pointed out that interbank transfers into the currency accounts attract no commission at all. I’m a little shamed to admit that I had never tried, presuming a fee would apply, and have been paying the 2% or so adjustment Citi apply between their own accounts for years. There are no fees for ATM withdrawals in the same currency as the account, transfers from your Euro account to any bank in the Eurozone are free, and you can have a USD cheque book which clears through New York for free.

    • idrive says:

      Actually, the best pair witi a CITI currency account is to go via a third party money transfer (I use Currencyfair) and send the funds back to the destination account. otherwise, CITI is eating the spread

  • Brian says:

    I have a trip to the US coming up with plenty of hotel spend. I did seriously think of getting the Lloyds Avios card, but wasn’t sure how often I’d be using it otherwise, since I have a European credit card for Euro spending. And since I’m in the first year of my AMEX Gold, I’ll get three points per pound – I tend to value Avios at 1p, so that more or less sets off the 3% foreign transaction fee. Plus, the spending will probably help to push me towards the £15,000 for the 7,500 bonus points, so overall it’s worth it.

    It probably makes sense to have a fee-free card like the Post Office one for foreign spend, however, once the first AMEX Gold year is over.

  • Kiran says:

    I used the Lloyds Rewards Avios Amex for paying hotel bill in Algarve recently. No FX fee and 2.5 Avios for every pound (for the first six months) is a pretty good deal I thought.

    • idrive says:

      ok, you say no FX fees and they claim it too. BUT are we sure that the FX rate is the one Masterd or Visa applies for that day? maybe i lost this in the flow of information. or they apply a rate they decide?

      • Rob says:

        It is the standard MasterCard / Visa rate which is the inter-bank rate to all intents and purposes.

        • Idrive says:

          Thanks Raffles!

        • Luke says:

          And the American Express exchange rate, which I’ve actually found to be better in some currencies than the MasterCard one.

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

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