Maximise your Avios, air miles and hotel points

The future of loyalty credit cards is here and it’s not a pretty sight

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MBNA launched a new rewards credit card yesterday.  This is not a travel rewards card.  The reason I am writing about it is that it shows you what the future of free non-Amex reward credit cards will be like.

To put this card into context, you need to remember that MBNA has historically been the most generous player in the market when it comes to credit card sign-up bonus.  Back in 2013 it offered 35,000 American Airlines miles with the FREE UK AA cards.  As late as September 2015 it was offering 25,000 Etihad Guest miles with the FREE UK Etihad cards.

What is fascinating about this card is that it is possibly the first brand new free UK rewards card launched since interchange fees were cut to 0.3% last December.   It is a sign of what the card companies can now afford, and a sign of what you will see on existing cards once the current contracts expire.

The new card is targetted as customers of intu shopping centres across the UK.  You can find full details here.

The representative APR is 16.9% variable.

Intu credit card

The first thing to notice is that it only comes as a MasterCard.  

Historically MBNA has offered double packs of Amex and Visa / MasterCard products with higher rewards on the Amex card.  This is now dead because third-party Amex cards (ie MBNA, Lloyds, Barclays ones) are subject to the same 0.3% fee cap as Visa and MasterCard.

American Express is believed to be in the process of cancelling its licensing agreements with MBNA etc since those contracts are now pointless.

The second point to note is that the rewards are unexciting.  

This is what you get back from Year 2:

a £10 intu Gift Card when you spend £3,000 on card purchases
an additional £10 intu Gift Card when you reach £5,000 on card purchases

The best possible return you can get is 0.4%.  However, in order to achieve 0.4%, you need to stop spending on the card as soon as you hit £5,000.  The more you spend above £5,000, the lower your overall return will be.

These rewards are doubled in Year 1 but that is just a way of making the sign-up deal sound more interesting.

The third thing to note is that the card has a lot of soft offers which cost MBNA nothing.

These include one year of Gourmet Society membership, 30% off main courses at Pizza Express and free buggy hire at Intu shopping centres.

On the positive side, it is worth noting that the interest rate – at 16.9% – is lower than the 22.9% which is now charged on most of the MBNA airline cards.

Conclusion

This package – a maximum return of 0.4% on your spending and, realistically for most cardholders, less – is the best that MBNA thinks it can afford in the new credit card world.

Coming from the company that brought you hugely aggressive sign-up bonuses in the past, it is a vision of where all rewards card, including airline ones, will end up when the current contracts come up for renewal.

(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.

Comments (158)

  • Nick M says:

    RE BA Spend £5/10k extra bonus – is this just showing in the main offers list? Or was it in an email? (Not showing on either of ours and we haven’t used the cards for a couple of months – keep meaning to cancel!)

  • Brian says:

    Re the IHG free night voucher with the Creation credit card, can anyone advise the following;

    1. How long the voucher lasts before expiring?

    2. if it expiries, for example, in September 2016, can I book before the expiration date for a date afterwards e.g. January 2018 ?

    Thanks

    • Rob says:

      Voucher lasts 12 months from issue date, which will be your card anniversary it seems.

      The Barclaycard version can be used for a stay after the expiry date but, as I found, you cannot amend or cancel the stay in that case.

      • Mark e says:

        Thanks Raffles , that’s something I’ve been interested to know as I have the Barclaycard version

  • Clive says:

    Triple Avios Offer – Book and Fly between September 6th – Dec 11th 2016

    http://www.ba.com/tripleavios

  • TripleB says:

    I know that different companies have different criteria for determining an applicant’s credit score – but I’ve only been in the country a year (so have limited credit history) and I was carefully nursing my credit score (monitored via equifax) and took a massive hit (good to poor) when in the same month I changed my electric supplier (I hadn’t not paid a bill on time – just switched to a provider with a cheaper tariff) and had a closing balance on my one and only credit card of £375 (of a £500 limit) – so was classed as using a very high percentage of my available credit (notwithstanding that the £375 was paid off in full before the due date).

    Having said all that – assuming that you have been up to date with payments on everything, is 3 months between credit applications generally enough to not be classed as being of poor credit for applying for too much credit. It’s been 3 months since I switched my electric supplier and 7 months since I applied for credit proper and was going to apply for the Hilton card in the not too distant future. I’m keen to get on board this game – but will wait another couple of months if the general consensus is that 3 months is too soon. For some reason the Barclays eligibility check doesn’t show your chances of the Hilton card (my chances on all the others are 8s and 9s out of 10).