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.
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.
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I got nothing either.. I probably put through about 40-50k a year but pay no interest… oh well, I’m going to stick with my HSBC World Elite until I hit my bonus level and then probably switch back to my BA Platinum AMEX (once my new year starts and I can get another accumulate another companion ticket).
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OT but credit card related – I was in a Lloyds branch on Thursday, and the staff there told me they were about to launch a new credit card with a sign-up offer of a chance to win a holiday to the states. They didn’t know what, if any, points/rewards earnings it would have, nor the fine-print of the holiday prize draw, but they were keen to tell me to check the website or pop back in next week, and not to apply for one of their credit cards in the mean time!
So they know there is a card that may have an offer to win a holiday but they don’t know when or what, useful as usual staff at the Lloyds bank!
Evening,
Can someone please suggest the best way of ordering currency for max return these days. Nee to order for collection at T5 on Monday.
Cheers
VISA or AMEX?
I held the Mastercard. The letter suggests that it will still be a Mastercard. Don’t think I paid any interest during the whole period I held the card either.
Have a few days off work before I go back, whilst I wait for my missing case to arrive back from Venice I will be avidly reading about all the alternatives and number crunching!
I got .75% to the £ on the old Mastercard. I must be profitable for MBNA to offer that.
I was going to ditch this card for another MBNA portfolio card. I’m not too fussed now…
I got Visa nothing card.
Hmm – anyone else not received any letter at all? I got the one telling us that you wouldn’t earn anymore but I’ve not had anything since telling me about what the card is going to be replaced by!
Finally got mine – zilch! Same for my parents, even though they hardly used theirs!
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
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.
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?
Absolutely definitely not an issue at all 🙂
No
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?
I applied for the Lufthansa card and my application has been referred!
Perhaps similar to my recent one re moving credit limits around? Do you need to call them to discuss?
They asked me to but I will leave it until I am officially refused and then ring.
Interesting move Rob. Why would you do that? I thought any kind of refusal is bad news?