Maximise your Avios, air miles and hotel points

The BA American Express interest rate goes up, and why I hope you couldn’t care less

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If you have a British Airways or British Airways Premium Plus American Express card, you should have received a letter in recent weeks informing you that the interest rate on purchases was increasing to 22.9% APR variable.

As of yesterday, this rate is also being applied to new applications.  On the free BA card, the rate has jumped by a whopping 7% from 15.9% to 22.9%.

The sign-up bonus on the cards has also increased, but I want to cover that tomorrow in a separate article.

British Airways BA American Express Amex credit cards

The headline rate on the Premium Plus card is now a whopping 60.7% APR variable, because credit regulations mean that Amex has to factor the £150 annual fee into the calculation.

I am hoping that you couldn’t care less about this change.

If you pay interest on your credit card, you should NOT be using a ‘miles and points’ card for your spending.  These cards are good for sign-up bonuses and are good for rewarding your on-going spending, but in general they do not offer a good deal on interest rates.

A quick look at Moneyfacts shows a long list of credit cards which offer 0% interest deals on purchases.  At the time of writing, there is a 24-month interest free deal from Virgin Money which tops the list.  If you are paying interest on your credit card balance, this is a far better deal for you than earning a few miles but paying 22.9% interest for the privilege.

There is only one ‘miles earning’ card that I know of which offers 0% on new purchases.

This version of the Tesco Clubcard Mastercard (click) offers 0% interest for 28 months on new purchases.  The interest rate is 18.9% variable after 28 months.

You would also earn 1 Clubcard point for every £4 you spend.  This equates to 2.4 Avios per £4 spent if you convert your Clubcard points across to British Airways.

Want to earn more points from credit cards? – February 2024 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

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

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £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.

Virgin Money is offering double points on spending until 14th April (£5,000 cap) to new customers when you apply for the Virgin Atlantic Reward+ Mastercard. Click here to learn more.

British Airways American Express Premium Plus

25,000 Avios and the famous annual 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

40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review

Virgin Atlantic Reward+ Mastercard

15,000 bonus points 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:

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

American Express Business Platinum

Crazy 120,000 points bonus (to 9th April) and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

Huge 60,000 points sign-up bonus (until 9th April) and free for a year Read our full review

Capital On Tap Business Rewards Visa

Get a 10,000 points bonus plus an extra 500 points for our readers 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

2% cashback on all your business spend for 3 months (1% thereafter) and no annual fee Read our full review

Comments (54)

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

  • Rob says:

    Thanks for that. That is only for balance transfers, though, and not new purchases, unlike the Tesco card.

    • Rob says:

      Sorry Gavin, you’re right. I looked at the wrong part of the website.

      Article updated, thanks for your help.

  • Tom C says:

    Rob, I really wish you mentioned about this before now. I’ve signed up for 94 credit cards this year all based on your advice and pay it all back at 50p a month. Unfortunately the interest got out of control, so I now pay off it off a monthly basis with a combination of Wonga loans, begging and stealing from family and friends and drug trafficking. I was lonely before starting to read your website, yet now I get regular visits from my new friends. Sure, they turn up and threaten to murder me if I don’t pay them back, but they’re just jokers like that.

    Now does anyone have a fiver they can lend me?

  • Lumma says:

    Quick one which I’m not sure of the answer, as I get paid weekly I pay my balance on my ba card back sporadically throughout the month while also using it to buy things. As a result the balance due from the previous statement is paid but there is rarely the total balance at zero as I’ve purchased new things. Will I be charged interest or not? Ive only had the card 2 months and haven’t had my second bill yet

    • cheekychappie says:

      If you pay off the previous month in full, you won’t incur interest charges.

      Obviously the balance will not be nil as you continue to use the card on an ongoing basis.

    • Rob says:

      As long as the total you pay before the ‘payment due date’ is greater than what you had outstanding at your last statement cut-off date, you are fine.

      So, if you happened to owe £300 on July 31st when your statement was printed and you ‘payment due’ date for August 25th, and you paid £100 on August 8, 15, 22 and 29, then you would be OK as £300 was paid by the £25th.

      If you paid £100 on August 15, 22 and 29 you would NOT be OK.

      • Lumma says:

        Thanks for clarifying that. I thought that was how it worked but didn’t want to be gaining about 500-1000 avios a month and paying a fortune in interest.

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

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