Maximise your Avios, air miles and hotel points

I lose out with MBNA’s replacement for Diamond Club!

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Letters started to land on doormats yesterday from MBNA explaining what rewards scheme would apply to ex-bmi Diamond Club credit cards now that the Avios scheme has closed.

Interestingly, MBNA has decided to make different offers to different people.  It isn’t yet clear if they are doing this based on the card type you used to hold OR the amount of money MBNA made from you in the past.  It seems to be the latter.

There are at least three different variants:

Some people are told they will get no rewards

Some people who held the MasterCard are being offered an eye-wateringly good 0.75% cashback on all future spend (details here) on what will now be a free card

Some people who held the Amex and Visa combination are being offered 1% back on the American Express and 0.5% back on the Visa (details here) on what will now be a free card

What did I get?

NOTHING!

My Diamond Club will be converted to an MBNA credit card.  This card will carry no rewards or cashback at all.

What is interesting about this decision is my ‘history’ with Diamond Club.  I am responsible for probably the biggest single transaction ever made on a bmi Diamond Club credit card.

Despite this, I have paid a grand total of £0 interest on the cards over the last decade.

So, why have I been given a card with no rewards?  Have I historically spent too much?  Have I paid too little interest?  I imagine I will never know.

Diamond Club cards

For the rest of you – or at least those of you who did not also receive the ‘no rewards’ card – there is a substantial arbitrage available here if you are self-employed or have any other reason to pay tax to HMRC.

Let’s take VAT payments for sole traders.  The credit card fee is 0.38%.  Because it is a business expense, the net fee for most people is nearer to 0.25%.  Giving you 0.75% cashback represents a decent profit.

Even on your personal tax payments, where you cannot write off the card fee as a business expense, you will make a margin of 0.37% which is worth having.

Anyone who receives the 0.75% cashback MasterCard deal should consider themselves lucky and should be thinking carefully about why they may want to use a rewards Visa or MasterCard instead.

I am not yet sure what I should do.  I am tempted by the Lufthansa Miles & More card, purely as a way of getting Lufthansa First Class redemptions.  I may not qualify for the sign-up bonus as I have had the card before, but I would get a 33% bonus on my spending for 6 months.  That would make 1 mile per £1 on their Visa card.

I also qualify for the HSBC Premier World Elite MasterCard as I have the current account – I used to work for HSBC once and lifetime Premier came as a perk – which pays 1 Avios per £1.  There is a £195 fee but the sign-up bonus offsets this in Year 1.


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

You can see our full directory of all UK cards which earn airline or hotel points here.

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual 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:

American Express Business Gold card

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

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 (122)

  • Mick says:

    I’ve taken the Lloyds Avios duo card as my Diamond Club replacement.

    double avios on Amex spend for first 6 months, so it’s 2.5 per pound. Good value

    • Genghis says:

      Very good card. Remember it’s only 2.5 avios/£ up to £2.5k / statement month. This meant a bit of juggling between and wife’s cards to maximise value.

  • Tom says:

    Does anyone know if having had a Diamond Club AE card disqualifies you from the welcome bonus if you take a British Airways Premium AE card because the former is classed as a BA product?

  • biscuiteer says:

    Nothing for me – had the Amex card for 10 years and paid off every month.

    I called up to cancel the card – which they’ve done.;

    Interestingly I tried to apply for the Virgin White card and was refused! Anyone else had any issues when applying for any of the MBNA owned cards?