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.)
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? – January 2021 update
If you are looking to apply for a new credit or charge card, here are our January 2021 recommendations based on the current sign-up bonus.
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
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
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
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
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:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
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
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
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.