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

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.

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Want to earn more points from credit cards? – June 2021 update

If you are looking to apply for a new credit or charge card, here are our June 2021 recommendations based on the current sign-up bonus. 

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the other top current deals:

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.