Maximise your Avios, air miles and hotel points

Holiday Tips 2 – the best ways of earning miles with your credit card abroad

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In Part 1 of Holiday Tips on Wednesday, I looked at ways to earn points when booking airport car parking.  Today I want to provide an updated look at the best ways to earn points when using your credit card abroad.

Something I stress on Head for Points whenever I can is the need to keep a clear mind when earning miles or points. If you are buying a product or service primarily because it offers you miles, you should have a view of how much those miles are worth to you to avoid over-paying.

This is especially true when earning miles from credit cards. Credit card miles are not free miles because you always have the alternative of using a cashback card instead. The ASDA Money card gives you 0.5% of your spending back in cash. Does your non-Amex payment card match that?

UK Rewards credit and charge cards

Historically, it was almost always a bad idea to use a mileage card for overseas spend. This is because all other miles and points cards – and indeed almost all other UK credit and debit cards – charged a foreign exchange fee of 2.99% which is itemised on your statement.  You can clearly see how much money is going out on avoidable FX fees.

Curve is one option

Curve – you can visit their website here – is an intriguing option.  You can find out more about Curve in this article – they will pay you £5 to try it out you don’t have anything to lose.

Curve, which is branded as a Mastercard, is NOT a credit card.  Instead, it recharges purchases made in a foreign currency to any other Mastercard or Visa you own, in £.

Curve adds a 1% FX fee to each transaction.  This is a lot lower than the 3% fee added by almost all UK credit and debit cards.  More importantly, you will also earn miles or points on the Mastercard or Visa which Curve recharges.

As an example, assuming £1 = $1.30:

You make a purchase in the USA for $130

Curve translates this to £100 and adds a 1% fee

£101 is recharged to the Visa or Mastercard linked to your Curve card – you earn miles or points on this card as you would usually, assuming it is a loyalty card.  The points earned should cover much of the fee.

Curve also allows you make ATM withdrawals abroad for a flat £2 + 1% rather than a 2.99% fee.  One £200 cash withdrawal per month can be recharged to a credit card – earning miles – but further withdrawals must be recharged to a linked debit card.

Earning Avios AND avoiding all FX fees

If you’re happy to take out another credit card and incur a £24 annual fee, there is an attractive alternative.

In late 2013, Lloyds Bank broke the mould by introducing a credit card – the Lloyds Avios Rewards card – which gave you miles AND no foreign exchange fees.  It was the first UK credit card to do this.

No-one else has yet followed suit and, now that interchange rates are capped, I doubt anyone will.  After all, FX fees are one of the few ways that a card issuer can now make a profit from anyone who pays their bill promptly.

The Lloyds card has a £24 fee.  There is no sign-up bonus.

There are also a number of FREE credit cards in the UK which do not charge any fees on overseas purchases.  These include The Post Office Money Platinum Credit and Halifax Clarity.  Clarity also offers totally free overseas ATM transactions.  None of these cards offer any loyalty points, however.

How does the Lloyd Avios Rewards card compare?

The Lloyds Avios Rewards card comes with a £24 annual fee, which makes it worse than the Post Office and Halifax Clarity cards. There is also a 3% fee on cash withdrawals abroad.

You will, however, receive 1.25 Avios per £1 spent abroad on the Amex card and 0.25 Avios per £1 spent abroad on the Mastercard. The Post Office and Halifax Clarity cards have no rewards programme.

If you value an Avios at 1p, and assuming your foreign spend is 75% Amex (your hotel will take it) and 25% Mastercard, then the Lloyds Avios Rewards card is a better deal than the free Post Office or Halifax cards if you spend over £2,400 abroad each year.

(Why? Because your £24 annual fee will be offset by the 2,400+ Avios earned back)

Is it ever worth using another credit card abroad and swallowing the 3% fee?

You may not want to go to the trouble of applying for another credit card just for overseas transactions.  There are some miles and points cards which are a decent choice for using abroad if you don’t want to go to the trouble of applying for a ‘no FX fees’ card.

The American Express Preferred Rewards Gold card (click for review) gives you double points when you use it abroad. This means you get 2 Membership Rewards points per £1, which converts to 2 Avios per £1. This does not fully offset the 2.99% FX fee, but comes close.

The IHG Rewards Club Premium Mastercard card (click for review) gives you 4 IHG Rewards Club points per £1 spent abroad. These can be redeemed for free nights at Crowne Plaza, Holiday Inn, InterContinental etc hotels. I value these at roughly 0.5p per point, so 2p of value per £1.

Spending abroad also helps you to achieve spending targets.

The IHG Rewards Club Premium Mastercard mentioned above also gives you a free night voucher when you spend £10,000 per year.

The Virgin Atlantic cards offer upgrade vouchers when you hit specific spend thresholds.

And of course the BA Premium Plus Amex gives you a 2-4-1 voucher for Avios redemptions valid in any class when you spend £10,000 per year.

You may find it worthwhile paying the FX fee on your credit card in order to achieve some of your spending target. After all, for most of us our holiday is one of the main expenditures of the year.

Conclusion

If you will spend over £2,400 abroad and are happy to pay the £24 fee, the Lloyds Avios Rewards card is an excellent choice.

Alternatively, take a look at Curve (they will pay you £5 for trying it) or one of the ‘no annual fee but no loyalty points’ 0% credit cards listed above.

Want to earn more points from credit cards? – April 2024 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:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

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.

British Airways American Express Premium Plus

25,000 Avios and the famous annual 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 & four airport lounge passes Read our full review

The Platinum Card from American Express

40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review

Virgin Atlantic Reward+ Mastercard

15,000 bonus points 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:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

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

American Express Business Platinum

40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Capital on Tap Business Rewards Visa

Huge 30,000 points bonus until 12th May 2024 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.

Barclaycard Select Cashback Business Credit Card

1% cashback uncapped* on all your business spending (T&C apply) Read our full review

Category

American Express Gold card, British Airways and Avios

Comments (92)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Frenske says:
    22 Jul22 July 06:24

    What about an article about using credit cards abroad when your employer is reimbursing you?
    I have been mainly using Amex Gold Reward for this but I’m cancelling soon due to anniversary fees.

    • Genghis says:
      22 Jul22 July 07:07

      Does anyone know for the IHG Creation card whether the 3% FX charge is included within the relevant line item or whether it is split out as a separate charge?

      • Roger says:
        22 Jul22 July 07:22

        I’ve not used mine recently, thanks to Supercard and the Aqua Rewards card, but a few months ago, transactions were shown on two lines: 1 for the gross amount, 2 a credit for the saving.

      • Genghis says:
        22 Jul22 July 17:41

        Are you sure you meant the IHG Creation card? It’s only been out a few weeks.

    • Matthew says:
      22 Jul22 July 08:18

      Agree, I’m doing the same and would like an article.
      Currently I use Gold amex for work trips and a free card for my own (Santander Zero or Supercard). This also helps separate business and personal spending making claims a bit easier.

    • John says:
      22 Jul22 July 08:37

      Can’t you just refer your wife every time you cancel and vice versa? (Apologies if you’re single)

    • Raffles says:
      22 Jul22 July 09:59

      Good question! I might do an article on that.

  • Sohan says:
    22 Jul22 July 07:16

    Isn’t the IHG a Mastercard now, rather than Visa?

    • Roger says:
      22 Jul22 July 07:24

      Yes, the new one from Creation i a MC.

      AIUI the old Barclays Visa cards are still valid and I’m pretty sure Rob has both. 😀

  • Gavin says:
    22 Jul22 July 07:23

    OT – my Avios from Iberia Groupon have posted

  • Stephen says:
    22 Jul22 July 07:47

    Supercard is proving to be a total nightmare. Wrong charges at insane rates which far from wanting to sort out they are actually trying to defend! Now they refuse to discuss the issues. Apparently on July 11th $278 was worth £261!!!!!. Three charges to a hotel I stayed in, only one of which is correct as confirmed by email from the hotel. Do they want to fix it? No. I took part in the original trail and never had any problems but this new version is a joke. Not to be trusted in my experience, customer service appalling so far.

    • John says:
      22 Jul22 July 08:36

      Supercard should not be used for authorisations at hotels, only when you have a final bill to pay.

      If you have an Amex charge card you should always use this for hotel and car hire authorisations and pay with another card if you want to. This is because charge cards have no credit limit, and Amex is good at chargebacks if hotels or car rentals try to scam you later.

    • James Frost says:
      22 Jul22 July 08:37

      Id agree about the rates. Just come back from 3 weeks in the US and used the card intermittently. The fluctuation in rates have been alarming, I’ve noticed that for smaller purchases especially it’s been converting at stupidly high totals.

      Had no problems with purchases or admin though, but don’t like what I’m hearing from you about the customer service. Hopefully it’s not a long term sign.

    • Jason Cousins says:
      22 Jul22 July 08:52

      SUPERCARD for me has been an utter nightmare. Used 15 times, all 15 incurred an additional ‘ IC CASH’ charge which I’m awaiting back from the financial ombudsman on whether this is even legal in it’s application. It’s also impossible to work out which additional charges applies to which original transaction. I’ve disputed this with my credit card who are being helpful. Also, and more worryingly, if you’e used the SUPERCARD for a hotel authorisation, SUPERCARD charges this as final straight away. When the hotel doesn’t claim this (as with me as I didn’t have any incidental spend), the transaction disappears from the app, but no money is returned. Despite repeated reassurances from them and lengthy emails promising the return of £180, (it’s not insignificant), nothing from them. It’s simply unacceptable.

      With other issues (app not working, locked cards etc) which I haven’t experienced, this is definitely a product that needs careful consideration before applying for/using.

    • Raffles says:
      22 Jul22 July 10:02

      You should have been told not to use it for hotel pre authorisations, only for final bills when you swap it for whatever card you gave at check in.

      • Jason Cousins says:
        22 Jul22 July 11:53

        I’ve never been told not to use it for this purpose, though on the FAQ’s now on the app it states that these types of transaction would be declined. (It certainly didn’t originally). I would suggest that myself and many others have also fallen in this trap and SUPERCARD have applied this new rule as they are finding it very difficult to deal with it.

  • Andy S says:
    22 Jul22 July 07:48

    I had an email from Amex recently saying foreign transactions on the BA amex earn an extra avios per 4 pounds equivalent until 31st August. Nothing to get excited about but saves having to apply for a new card.

    • Raffles says:
      22 Jul22 July 10:03

      Still a weak deal, given the 3% fee, compared to an FX free card though – unless you need the spend to hit your £10k target.

  • Concerto says:
    22 Jul22 July 08:01

    For the Groupon Iberia promo, I paid with my German M&M , and therefore Euro based, credit card. Even though the transaction was in Euros, there was a 1.77% fee. I paid through PayPal Germany, so it could have been that.

    For UK cards, I have the two MBNA Diamond Club ones and the Nationwide one. With the latter you can earn FX free foreign spend by achieving a certain volume of spend within the UK.

    • Roger says:
      22 Jul22 July 08:10

      That Nationwide card sounds like the basic one and is far too complicated for me. There are several Nationwide cards with different options.

      I have the Nationwide Select Visa which has 0% f/x on purchases and the Nationwide FlexPlus debit card which has 0% f/x and no handing charges. The FlexPlus current account is a package with credit earnings and a monthly fee.

    • John says:
      22 Jul22 July 09:03

      Instead of messing about with interbank interchange fees, which only theoretically and indirectly benefit the consumer, the EU should have made a cap on forex fees on consumer cards which would directly benefit everyone except banks.

      Paypal in all countries does not charge anything for paying, but it tries to DCC for foreign transactions. This should not happen for EUR transactions with an EUR card.

  • reddot says:
    22 Jul22 July 08:06

    I always have a spare (Curve or Supercard) with the Lloyds card. Lloyds is frustratingly sensitive to out-of-the-ordinary transactions and transactions sometimes get declined. It’s fab when it works but I can’t be assured that it will. Maybe giving travel notification might help, but I travel so often that it’s a pain to have to keep doing it.

    • Roger says:
      22 Jul22 July 08:19

      I guess you don’t advise them and transactions sometimes get declined? I agree it’s time-wasting to call them but it seems to smooth operations.

      I have a Santander Zero 0% f/x MasterCard (no longer available for new applications). When I rang to tell them I was travelling, they told me it was no longer necessary for Europe travel. Hooray!

      Useful info from MSE: http://www.moneysavingexpert.com/credit-cards/travel-credit-cards
      See especially the debit cards from hell. 😀

    • YL says:
      22 Jul22 July 13:50

      I provide Lloyds travel notifications all the time, but my card still get declined abroad occasionally…

    • Mr Dee says:
      22 Jul22 July 14:54

      They usually send a sms to confirm the transaction is genuine and then allow the next attempt through if you confirm it is genuine.

  • BigDave says:
    22 Jul22 July 08:15

    been very happy with curve so far – shame about the lack of amex support, we hope it comes back – but still better forex rate than using my regular cards

    Their customer service has been brilliant so far.

    • nate1309 says:
      22 Jul22 July 08:47

      I have to agree. I have also stuck with my curve card, the timing was right when it first came out and I was able to make a few big purchases which for me offset the £35 already. Every survey they have sent me since I have stressed how much getting AMEX back on board would mean.

    • The_Real_A says:
      22 Jul22 July 10:06

      Since the bulk of this crowd and the Flyertalk brigade have noisily left the building, curve has worked flawlessly and support is not back to 24hours. I also had my limits increased significantly which makes much more sense for using for business purposes.

    • AndyR says:
      22 Jul22 July 16:16

      Are you saying the Curve forex rate even with the 1% fee is better than other cards?

    • Mr Dee says:
      22 Jul22 July 16:36

      Curve seems expensive to save a little bit of space in your wallet over using the cards direct.

      • Rob says:
        22 Jul22 July 16:39

        When they get their rewards scheme going it could be very interesting, because you would earn TWICE – once via Curve Rewards and once via the recharge to the underlying card. This is the only way, in my view, it can survive long term assuming that Supercard succeeds.

        • Mr Dee says:
          22 Jul22 July 18:06

          If a Curve rewards program starts then it might be worth looking at depending on the % return and how much you will have to spend to get your signup fee back.

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