I was updating the credit card database page on Head for Points yesterday and noticed some shocking changes to the interest rates charged on many popular travel credit cards.
Since the EU capped credit card interchange fees at 0.3% in December, it has become hugely difficult to make money out of average spenders. Whilst travel credit card holders are wealthier than average, this means that very few of them pay interest.
The upside, as I was told at the credit card conference I attended earlier in the year, is that when they do pay interest, they are paying it on a larger than average balance.
Here are the changes I noticed yesterday on a range of free cards. The rates quoted are for new applicants and may not necessarily have been imposed on existing cardholders:
American Airlines American Express and Visa (MBNA) – up 5% to 22.9%
Emirates Skywards American Express and Visa (MBNA) – up 5% to 22.9%
Etihad Guest American Express and Visa (MBNA) – up 4% to 22.9%
HSBC Premier MasterCard (HSBC) – up 7% to 18.9%
Lufthansa Miles & More American Express and Visa – up 6% to 22.9%
United MileagePlus American Express and Visa – up 4% to 22.9%
Virgin Atlantic White American Express and Visa (MBNA) – up 5% to 22.9%
Where these cards have a paid version (Emirates, Virgin) those have also gone up by just over 5%.
Marriott Rewards has also increased the rate on its MasterCard but that card is not currently available to new applicants.
In the short term, as card issuers are tied into contracts with the airlines, ramping up interest rates is the only weapon they have. Changes in annual fees or earning rates would require contract renegotiation – but those will be coming too over the next couple of years as deals are renewed.
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:
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 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 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
60,000 points, £200 travel credit and an unbeatable set of travel benefits – for a fee Read our full review
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:
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
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.