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

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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.

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.

UK Rewards credit and charge 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.

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

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

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the other top current deals:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

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

Nectar American Express

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

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

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 offers.

American Express Business Gold

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

Amex Platinum Business American Express

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 card

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

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 Credit Card

1% cashback and no annual fee Read our full review

Comments (167)

  • James67 says:

    In the absence of a BAPP amex my default card will become Lloyds avios amex and my DC MC will be replaced just after new year (for 2 year platinum status to offset loss of spire which I see no value in renewing) with IHG premium card. Nowadays I’m using Hilton much more than IHG but sooner or later a useful pointsbreak deal will hopefully come along for me that will make my return on the IHG much greater than your quoted 0.8%. Depending on priorities I should also be abke to make one free night per year out of it too. Thanks for this very useful summary.

  • Steve says:

    Rob, does the fee point on paying taxes on the card still apply if you use World Elite via Curve or Supercard? I have both pointed at the HSBC card and seem to work happily for most things….would this save the 0.6%?

  • Genghis says:

    MSE have a ‘Credit Club’ in beta (free to try) which pulls in Experian score à la Barclaycard.
    I think I’m holding out for an increased sign up bonus on Virgin Black and will then use that for the year.

  • Kevin says:

    OT. Just to say – on checking my BAEC account the 4,500 avios for Sunday Times Travel Magazine subscription posted yesterday. Not sure if this has been mentioned elsewhere.

  • Genghis says:

    Hey – Nationwide referrals round here are mine! Lol. 🙂

  • SB says:

    Tesco Premium Credit Card £150 per year

    Actually, since the recent Tesco rule change on their cards, it looks like grandfathered accrual rates still exist, as on last statement 50 Clubcard Points (CCP) were continuing to be valued at 160 Avios not 120. This equates to £1 : 3.2 Avios not £1 : 2.4 Avios value for Tesco spend (£1 = 1 CCP) and put another way, 0.8 Avios NOT 0.6 Avios per £1 non Tesco spend (£4 = 1 CCP).

    Add in Tesco FX orders coming in as purchases and weekly spend in Tesco, Direct and wine, the earning rate is really up there with HSBC World Elite (although nice to accrue balance for Etihad and Sing) earnings rates of £1:1 Avios and BAPP £1:1.5 Avios.

    Just a pain that now am paying £195 to BA, £255 to HSBC (including additional card) and £150 to Tesco each year!

    • David2910 says:

      Tesco FX orders = purchases? Interesting. Is that true when using amex? If you somehow input clubcard no., could you get CC points as well as amex MR? Haven’t looked at this before but I inner there an online Tesco Direct FX portal or something?

  • Reddot says:

    +1, I showed a friend the math too. We get a minimum value of 1p per avios, often 1.25p or higher for our many London-Edinburgh flights, so cash is not as valuable.

    • Mr(s) Entitled says:

      Ah, but then one has to factor in if you are indeed getting value or are you being upsold on a flight than you would never have taken otherwise? It’s a complicated business and how one perceives value is very much driven by that individuals assumptions.

      I’m off to Geneva next week to use the two free nights that I won courtesy of Rob’s helpful post a few months back. Across the two hotels I am saving nearly £700. But then I am spending money on RFS flights to a destination that I otherwise have little desire to visit. And then I’ll be spending money whilst there in what is a very expensive city. My value per Avios therefore is really a negative number in this instance.

      • Rob says:

        If you’re in the IC on Thursday I’ll buy you a drink …..!

        • Mr(s) Entitled says:

          Mandarin Oriental on Thu and then the IC on Friday. So close yet so far, besides which, I am sure it is I who should buy you a drink.

          • Rob says:

            I would have jumped at the MO but I got mine in the last batch and it had gone and my choice of dates was slim – there was only about 6 possible days I could do it. IC location is rubbish, the MO is perfect. Only upside of the IC is that I can do a review.

        • Leo says:

          At least you both “won”. I got a 50% off consolation prize.

        • evelyn thomas says:

          We thought the IC had one of the best hotel pools – enormous, heated, outdoor – in europe. But strange lack of bread at otherwise good breakfast buffet
          Thanks for the free nights headsup Rob
          ps dont forget to get your free bus ticket in arrivals hall

    • Frenske says:

      Perhaps you could used the cash back to buy an cheaper EasyJet or Ryan Air flight or perhaps take the train. Yes comparing apples and pears, but so is comparing Avios with cash.

      • Lumma says:

        I’m having my free night on Tuesday. Booked easyjet flights to Geneva for £55 return and took an extra £10 off with some nectar points. Definitely didn’t seem worth wasting 8,000 avios and £35 on.

  • harry says:

    Good article. Anybody else fall into the camp: ‘we don’t really need a Visa/MC anyway’? (We already have Tesco card but it never got used (except as clubcard @ PFS) whilst the BMI duo was available.)

    In other words, I manage to put well over 95% of spend on Amex already. PayPal —> Amex obviously helps a lot. & paypoint @ Co-Op for spend such as utilities & council tax.

    Sign-up bonuses change the equation but I still see Gold as my go-to card from 1st November. Might give Plat a go. Am I right in thinking you can’t have Gold and Plat at the same time? My wife is due a new Gold in a couple of months, so might very well go for it, timed for PP entrance to No 1 Traveller @ Xmas 🙂 (Do supps get PP card in their own right??? Sorry, must do better with my research now I have to think about it a bit harder, poor old BMI card!)

    • Genghis says:

      I thought you’d know, Harry. 🙂 yes either Gold or Plat. And a supp gets a PP card
      You could try the Gold>Plat 20k upgrade (though not guaranteed), get the hotel statuses (though no need for them I guess with your Marbs pad?)

      • David says:

        I’ve held both Gold and Plat concurrently for years. As separate card accounts.

        What is true now is that you can’t get the signup bonus for either while holding an MR earning card, etc. But I’m not aware of anything stopping people holding both products, which I have done for years (and picked up both sign up bonuses – as that was permitted then too).

      • harry says:

        🙂 Genghis

        well I sort of knew but it didn’t really matter as I balk at the cost, I can’t really justify it per se but I guess the points, pro rata refund, & a couple of lounge entries would be OK

        thanks also – David

    • RTS says:

      You can pay utilities via paypoint at Coop?! Whatttt that’s new to me!

    • Gavin says:

      Agree to an extent. I usually use the Lloyds MC when Amex not accepted (and abroad with the Amex).

      My other cards are used for ’boutique’ purposes and are rarely in my wallet. IHG for council tax, Tesco for petrol points only, Clarity for overseas ATM. In non-Amex stores I try and pay with my Tesco MC in order to get the number of CC points up to 50 so they can convert to Avios

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