What credit card should replace your Diamond Club Visa or MasterCard?

Yesterday I ran an extra article to share the news that the MBNA Diamond Club (ex bmi British Midland) credit cards will stop accruing Avios points on 30th September.

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.

If you want to check your credit record before applying for a new card, click here for a free 30-day trial of Equifax’s online credit report service.   Note that a monthly fee of £14.95 will apply following the 30 day free trial of this product if you do not cancel within the trial period.  You can cancel your subscription at any time.

Diamond Club cards

Avios cards:

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.

Best long-term card for the Avios collector (high income readers):  HSBC Premier MasterCard (0.5 Avios per £1) or HSBC Premier World Elite MasterCard (1 Avios per £1)

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.

TSB Avios American Express and MasterCard (0.2 Avios per £1) (review)

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.

TSB Premier Avios American Express and MasterCard (0.25 Avios per £1) (review)

£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.

Tesco Premium MasterCard (0.6 Avios per £1) (article)

£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.

Credit cards

Hotel cards:

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.

Virgin Atlantic White American Express and Visa (0.5 miles per £1 on Visa) (review)

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.

Virgin Atlantic Black American Express and Visa (1 mile per £1 on Visa) (review)

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.

Emirates Skywards American Express and Visa (0.5 miles per £1 on Visa) (review)

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.

Emirates Skywards Elite American Express and Visa (1 mile per £1 on Visa) (review)

£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.

Etihad Guest American Express and Visa (0.75 miles per £1 on Visa) (review)

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.

Flybe MasterCard (review)

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.

Lufthansa Miles & More American Express and Visa (0.75  miles per £1 on Visa) (review)

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.

Further reading: click here for our ‘Credit Cards Update’ page summarising all the current offers, and click here for all of our ‘Credit Card Reviews’ articles.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)

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.

Good Asia sale on Finnair (earns Avios) from London, Edinburgh, Manchester and Dublin
British Airways to drop one of the two London City to New York flights
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  1. I was wondering whether MBNA still had their non-travel points cards (other than with football clubs) and the answer seems to be no.

    But a search produces an imminent More Rewards card.

    I wonder if that will be interesting.

  2. Two question areas i am struggling with — can Raffles/anyone please help with these:

    * Re: the Lloyds card £7k spend avios redemption upgrade voucher : can this only be used on BA flights (i.e. as is the case with the BA Amex 2-4-1 companion voucher) or can it also be used to upgrade on OW partner flights too, e.g. from PE to Biz cabin on e.g. Qatar, Cathay, etc ?

    ** Re: Amex Preferred Rewards Gold : has anyone who has had this chargecard cancelled it after the first fee-free year, before the £140 for year two kicks in? If so — how easy is to cancel, what did you do? And did you still get the 10k anniversary points bonus even if cancelling right at the point of having the card for a calendar year?

    • Definitely BA-only.

      PRG does pro-rata refunds when you cancel so even if you had to hold it for a bit to get the points it wouldn’t cost that much.

    • Lloyds: only BA

      Amex: call, direct message, write; they don’t give you any trouble. The 10k appears a month after you renew. If you don’t use the card after the anniversary date you should avoid paying anything. Refund would be prorata anyway.

      • Thanks again Raffles (and Alan) — much appreciated.

        Two more questions to clarify: the BA Amex 2-4-1 companion voucher … I know this is valid for twelve months. But when in your experiences, is it awarded? Is it immediately given on reaching £20k spend … or regardless, is it simply awarded at the end of your card year?

        And what are the rules surrounding expiry from the voucher award date? Is it just that booking has to be made in twelve months … or do the flights also have to be taken in twelve months too?

  3. Thanks for this Raffles. So as someone who’s only had the DC Amex/Visa combo, which would be the best replacement for the Amex? The Lloyds card gives 1.25 per £, any others offering more than the 1 per £ of Amex directly? Thanks

  4. Just about on topic (as part of the strategy may involve whatever replaces my Diamond Club)…
    I find myself needing an extra night in NYC next summer, as part of a long weekend which is otherwise covered using Hilton points for one night and (fingers crossed) Hilton Barclaycard sign up vouchers which my wife and I plan to get early next year.
    I would essentially be starting from scratch in all schemes – I have a handful of points in most schemes, but no big balance to build on (other than some avios to transfer). My accelerate target would yield 31k points for three nights stay (I’m snuggling to find any of those nights below £50 pn though).
    How would people accrue enough points for a free night in the space of a year? Thanks.

  5. chris1922 says:
  6. Posted on 5 March 2013 – 2013! – and AFAIK no longer available to new applicants.

    OTOH, MBNA have a teaser page for a new AmEx/Visa combo: https://www.mbna.co.uk/compare-credit-cards/rewards-credit-cards/mbna-more-rewards/

  7. I am trying to generate a referral for either me or my wife from the other one of us. No emails have come through. Has anyone had any luck generating a referral email since DC news and I imagine a massive rush of applications?

    • I mean a referral for Lloyd Avios Duo pack (£24) – incidentally it’s £12 for Club Lloyds members, not sure if combinable with referral though. In any case, no referral emails have arrived. This might be typical Lloyds IT failover..is it a case of repeating until it works? or just give up?

      • You have a Lloyds a/c so are blocked. Request a referral via a new email address.

      • Lloyds IT is atrocious at sending referrals for their Avios card but as long as you both use the same email address for referral and application it should still be awarded OK (assuming the person being referred is a new customer of Lloyds of course)

        • Shocker, Lloyds send us both our referral letters this afternoon (after 11 days)…small print blocks referrals for previous Lloyds Credit Card holders, not bank account holders. Fingers crossed

  8. A catch for the Lloyds Avios Rewards American Express & MasterCard is in the small print:
    Customers who upgrade their journey using the upgrade voucher will have to pay the increase in airline taxes, fees and charges or increased Reward Flight Saver cost applicable to the cabin that the customer upgrades to.
    So you will definitely pay extra if you use the upgrade voucher.

    • APD is the same for World Traveller Plus and Club World, so the only extra to pay would be any extra BA fuel surcharge.

      There IS a big extra chunk to pay if you upgrade from World Traveller to World Traveller Plus though.

    • Although that’s the same as when you use Avios to upgrade a booking anyway so you’re still obtaining the same saving in Avios. I also found the cash amount charged was less than the differential one would expect from compared the two classes of redemption on BA.com – not sure this is consistent or just a one-off bit of luck though!