The BA Amex 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.)

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!

Credit cards

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.

(EDIT:  I was wrong!  There are actually two cards which offer a 0% on new purchases deal.  The Lloyds Avios Rewards card offers 0% on purchases for the first 12 months.)

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.

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.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated ‘Credit Cards’ page or use the link in the menu bar at the top of the page.)

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Comments

  1. 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.

    • 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.

      • 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.

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