This is a big blow for many people, not least myself who has been earning a ludicrously generous 2.5 Avios per £1 on a MasterCard!
Today I want to look at the best Visa or MasterCard alternatives for long-term spending. I am not focussing on sign-up bonuses because Diamond Club cardholders are looking for a ‘keeper’.
The Head for Points credit card guide covers 21 different Visa and MasterCard products. None of them are anywhere near as generous as the Diamond Club card.
Bear in mind that you may now be better with a cashback card. As a guideline I will use the John Lewis MasterCard which pays 0.5% in John Lewis or Waitrose vouchers.
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Best long-term card for the Avios collector (for most people): Lloyds Avios Rewards American Express & MasterCard (0.25 Avios per £1 but you get an upgrade voucher at £7,000)
This is a double pack with a £24 fee. The earnings rate stinks (0.25 Avios per £1) BUT MasterCard spending counts towards the upgrade voucher you receive for spending £7,000. This voucher allows you to book a Club World BA redemption for the Avios of World Traveller Plus or a WTP redemption for the Avios of World Traveller. Short-haul, you can book Club Europe for the Avios of Euro Traveller. You could save 50,000+ Avios if you use the voucher smartly.
Add in the fact that the card has NO FX FEES and you have a good package. Lloyds service is poor but you can hold your nose and get through that. My full review is here including details of the refer a friend bonus. Representative APR 23.7% variable including fee based on a notional £1200 credit limit.
You need to have a (free) HSBC Premier current account to get these cards. Read my coverage here and here for more details. If you’ve got the money behind you to get Premier, the cards are great. The standard MasterCard is FREE and earns 0.5 Avios per £1. Representative APR 18.9% variable.
The World Elite card has a £195 annual fee but comes with a sign-up bonus of 40,000 Avios for spending £12,000 in your first year, free airport lounge access and pays a generous 1 Avios per £1 spent. Representative APR 59.3% variable including fee based on a notional £1200 credit limit.
Best long-term card for the Avios collector (no annual fee) – Tesco Clubcard MasterCard (0.3 Avios per £1, worse after rounding)
The word ‘best’ should really be in inverted commas, because ‘best’ is simply not good enough. You get 1 Clubcard point per £8 spent which translates into 0.3 Avios per £1. However Tesco rounds down each transaction to the nearest £8 which means your actual earning rate is a lot lower. A £7.99 purchase earns NOTHING whilst a £15.99 purchase only earns 1 point. 0.5% cashback from the John Lewis card also trumps 0.3 Avios per £1, let alone whatever rate you get after rounding down has taken place. My full review is here. Representative APR 18.9% variable.
Visa or MasterCard Avios products of little use to most people:
The cards below are, for most people most of the time, beaten by one of the cards listed above:
Lloyds Choice Rewards American Express & MasterCard (0.2 Avios per £1) (review)
£24 fee and 0.2 Avios per £1 compares badly to the Lloyds Avios Rewards card, given that this card has no upgrade voucher. Get the John Lewis card instead. Representative APR 23.7% variable including fee based on a notional £1200 credit limit.
No fee, 0.2 Avios per £1 spent on the MasterCard. You are better off paying £24 for the Lloyds Avios Rewards card with a higher earnings rate, upgrade voucher and no FX fees, or getting the free John Lewis 0.5% cashback card.
£50 fee, 0.25 Avios per £1 spent on the MasterCard. You get a 2-4-1 voucher for Economy BA Avios redemptions after spending £15,000 but such redemptions are almost always poor value anyway. Lloyds Avios Rewards is a better option – cheaper, the upgrade voucher is more flexible than an ‘economy only’ 241, no FX fees. Alternatively, the John Lewis card is a better deal with 0.5% cashback. Representative APR 23.7% variable including fee based on a £1200 credit limit.
£150 annual fee. You wouldn’t get this card for the earning rate – which is poor at 0.6 Avios per £1, and in reality even lower due to the way Tesco rounds down your transactions. Some people may find value in the travel insurance and the generous bonus for spending over £5,000 at Tesco per year – the card only really works if you would trigger this. Anyone spending £100 per week in Tesco, on food or fuel, may want to consider it. Representative APR 56.5% variable, including the fee, assuming a £1200 credit limit.
If none of the Avios cards above appeal to you, you may want to consider a hotel credit card instead.
Hilton HHonors Platinum Visa – 0.6% return on my valuation, free card
EVERYONE who reads HFP should get this card – although, as you can now only get the bonus once, you need to time it right. The sign up bonus is a voucher for a free weekend night at any Hilton Group hotel, triggered when you spend £750. The only catch is that it must be used within 6 months. Long term, it isn’t a bad option – you get 2 Hilton points per £1 which I would value at 0.6p. This is VERY favourable compared to, say, 0.2 Avios per £1 on a competing card. My full review is here. Representative APR 18.9% variable.
IHG Rewards Club MasterCard – 0.4% return on my valuation plus IHG Gold status, free card
This card comes with 10,000 IHG Rewards Club points which I would value at £40-£50. As an added bonus, you receive permanent Gold status in IHG Rewards Club. For a free card, the earning rate is pretty good. You receive 1 IHG Rewards Club point per £1 spent which is worth 0.4p – 0.5p. My full review is here. Representative APR 18.9% variable.
IHG Rewards Club Premium MasterCard – 0.8% return on my valuation, IHG Platinum status AND a free night potentially worth £250 each year when you spend £10,000
This is arguably the best non-Avios option for high spenders. The card comes with 20,000 IHG Rewards Club points which I would value at £80-£100. As an added bonus, you receive permanent Platinum status in IHG Rewards Club. A high spender would do well with this card. You receive 2 IHG Rewards Club points per £1 spent which are worth 0.8p – 1p. When you spend £10,000 in a card year, you receive a voucher for a FREE night at any IHG property – worth £250 at a top InterContinental. My full review is here. Representative APR 18.9% variable.
Non-Avios airline cards:
This section is trickier to call. Unless your Visa or MasterCard spending is huge, you will never earn enough miles purely from the card to redeem for a flight. You are only likely to be interested in these cards if you already collect miles in that programme. In this scenario, the question to ask is: is the card a better deal than a cashback card?
Note that none of the paid cards listed here offer any sort of pro-rata fee refund if you cancel.
Good earning rate at 0.5 miles per £1, given the £0 annual fee and 3,000 mile sign-up bonus. However, Visa spend does NOT count towards the Premium Economy reward upgrade on an Economy redemption after spending £10,000 per year (two can be earned per year) or the fairly useless companion voucher (valid only on a paid flight in a flexible booking class in any cabin) when you spend £15,000 in a year. Representative APR 22.9% variable.
Excellent earning rate at 1 mile per £1 but you need to offset the £140 annual fee against this. For the first year, the 18500 mile sign-up bonus makes it attractive. Visa spend does NOT count towards the Premium Economy reward upgrade on an Economy redemption after spending £5,000 per year (two can be earned per year) or the fairly useless companion voucher (valid only on a paid flight in a flexible booking class in any cabin) when you spend £7,500 in a year. Representative APR 57.4% variable including fee based on a £1200 credit limit.
American Airlines AAdvantage American Express and Visa (0.75 miles per £1 on Visa) (review)
This is an EXCELLENT card, with no fee and 0.75 miles per £1 spent on the Visa. If you have an American Airlines stash this is definitely worth considering. There is a 5,000 mile sign-up bonus too. Representative APR 22.9% variable.
Not as generous as the American card, but 0.5 miles per £1 is still good for a free card. This is a 5,000 mile sign-up bonus too. Representative APR 22.9% variable.
£150 annual fee but a very strong earnings rate of 1 mile per £1 spent on the Visa. For a heavy spender this is worth a look, and even an average spender may find it good for the first year given the 10,000 miles sign-up bonus. My review outlines the other perks offered although I don’t value any of them highly. Representative APR 60.5% variable including fee based on a notional £1200 credit limit.
0.75 miles per £1 spent on the Visa is a good deal given the lack of a fee. 5,000 mile sign-up bonus. If you fly Etihad the other perks are worth a look too – bonus miles on Business and First Class flights taken within your first 90 days and Silver status after one return flight. Representative APR 22.9% variable.
The card is too complex to explain easily! My review has all the details but I don’t recommend it. Even the sign-up bonus of a free flight is less generous than it seems. Representative APR 18.9% variable.
With 0.75 miles per £1 on the Visa and no fee, this card is a good deal if you have a Miles & More account. Holding it also stops your miles expiring, which is valuable given the harsh three year cut off. The sign-up bonus is low at 1,500 miles but you also get 33% bonus miles for the first six months which a high spender could find valuable. Representative APR 22.9% variable.
United Airlines MileagePlus American Express and Visa (0.625 miles per £1 on Visa) (review)
Finally, we have the United card. It offers 0.625 miles per £1 spent on the Visa and has no fee. There is no sign-up bonus. Representative APR 22.9% variable.
What will I do?
This is where I am with my thinking:
I already have the Barclaycard version of the IHG Premium card. I will keep this, paying the £99 fee, because of the free room night for spending £10,000 per year and permanent IHG Rewards Club Platinum status.
I also have HSBC Premier banking although I have never applied for the credit card. It may be time to order the World Elite MasterCard and earn 1 Avios point per £1. One snag here is that 75% of my Visa / MasterCard spend is from paying tax bills and this card has a high 0.6% fee.
I may even go a little off-piste. I have a soft spot for Lufthansa First Class redemptions. At 0.75 miles per £1 and a 0.4% fee when paying HMRC, I could generate some cheap miles here and in large enough quantities to make a difference. Lufthansa miles are otherwise hard to earn – you cannot get them from Amex transfers and you cannot even buy them. The only good transfer option is via Starwood Preferred Guest and that may go away after the Marriott takeover.
This is definitely an issue where there is no obvious ‘right’ answer. Most people, I imagine, will migrate to the Lloyds Avios Rewards card purely because the upgrade voucher offers value.
Want to earn more points from credit cards? – December 2020 update
If you are looking to apply for a new credit or charge card, here are my December 2020 recommendations based on the current sign-up bonus.
British Airways American Express
5,000 Avios for signing up, no annual and a companion voucher for spending £20,000 Read our full review
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion 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
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending 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:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
Earn both Avios and BA On Business points with your business spending Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
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.