10 UK travel credit cards hike their interest rates sharply

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.

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

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

Until 9th April 2021, American Express is running the biggest sign-up bonuses ever seen on a UK payment card.

You will earn 100,000 Membership Rewards points on American Express Business Platinum (apply here) and 50,000 Membership Rewards points on American Express Business Gold (apply here) which is FREE for your first year. Points transfer 1:1 into Avios. Here are links to our reviews:

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:

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.