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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.

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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Category

British Airways and Avios

Comments (122)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Steve says:
    8 Oct8 October 07:29

    No rewards for me either. They clearly don’t value me as a customer.

  • mark2 says:
    8 Oct8 October 07:40

    I am not surprised that they did not value me as a customer since I took loads of Avios from them and never paid a penny in interest as I paid the whole balance monthly by direct debit (as with all my cards).
    Really we should be grateful that they paid us 2/1 per £ for so long.

  • Andrew says:
    8 Oct8 October 07:41

    No rewards for me I spent just over £1m on the card for each of the last 2 yrs and very little in interest.

  • Martin says:
    8 Oct8 October 07:44

    No rewards for me either, just the basic card.

  • Geoggy says:
    8 Oct8 October 07:50

    HSBC drive me insane. As good as that Premier MasterCard sounds I’m not sure I have the will to get one. I’ve got a Premier account, I’ve got the Premier MasterCard so I went in branch to upgrade and add my wife as an additional card holder.

    Ohhhh you need an hour appointment for that Sir, how’s 2 weeks on Wednesday at 2.45?

    Is there no other way of getting one? Yes just call the number on the back of your card.

    Did that, ohhhh we have to send you a form for that Sir. A week later, no form, call back , ohhhhh sorry sir we will send another.

    Form arrived – rubbish form, blurb mentioned additional card holder but nowhere on form for you to add them. Call them up, ohhhhh sir you need another form for that once you’ve been successful.

    At this point I asked them if it was 1981 and told them to stick their card.

    Add a recent failed mortgage application because of their incompetence and insistence on 2 hour telephone calls most of which is them reading from a script and I think I need a new bank.

    • Yuff says:
      8 Oct8 October 09:27

      You can complete it all online.
      I would get your card first then add your wife. It was instant when we upgraded both our HSBC cards and the cards arrived within 10 days.
      Search previous articles, when the card came out, I’m sure the way to do it was in the comments after the article 😉

    • John says:
      8 Oct8 October 09:45

      You really should have more than one bank.

      Premier is good to have if you have accounts in many countries, but you certainly shouldn’t keep any more than the minimum balance required with HSBC.

      The only other thing which HSBC really beats other banks in all countries is handling cash (no other UK bank takes sixpences and old Gibraltar banknotes without asking any questions – but how often do you need to deposit these?)

    • Yuff says:
      8 Oct8 October 10:12

      HSBC love form filling, dotting the I’s and crossing the t’s, however if it falls outside of their parameters, of business, it really is “computer says no” moment.
      I have banked, business and personally, with them for 25 years. After they contacted me regarding a buy to let mortgage, I went to an appointment- they know what I do, however because all my income is generated from property they will not give me a mortgage, for anything. The mortgage was more of a personal loan secured against an asset 4 times the value of the mortgage and an 8 year term, however they considered that too high risk….. 🙂
      However once you have their products they are generally very good.
      The elite card is definitely worth having with the bonuses etc

    • Kevin says:
      8 Oct8 October 11:19

      It took me a couple of months for me to get the elite card. HSBC sent me the wrong forms then the wrong card (the old one). It seemed especially hard to apply for the card for my wife. Then when I complained, they started a lengthy complaint process during which time I couldn’t be sent the cards.

      Now I actually have it, I like it.

      • Genghis says:
        8 Oct8 October 11:22

        Poor show making it difficult for ordinary folk but they’ll happily facilitate money laundering…

    • Zander says:
      8 Oct8 October 11:44

      HSBC has been going down hill for quite some time, the main benefit that I found useful was the account opening in Dubai but Premier service is useless UK side (I recently settled a claim against them for being missold) and I’m seriously considering my options with Citi being #1 choice.

    • the_real_a says:
      8 Oct8 October 14:16

      I never really believed the banking nightmares people spoke until i tried to open an HSBC account. The process is in the 1970`s with every transactions forcing you to go “into branch”. The branch staff are clueless, the call center is based in India who are very polite but utterly useless and cannot move from their script.

      It has taken me 5 months to open a current account and USD currency account.

      The complaint or escalation team attitude is shocking. Not even a word of apology, i should be grateful that i got my accounts open.

    • Callum says:
      8 Oct8 October 17:35

      All banks read from long tedious scripts now. You can blame the people who claim they were “missold” products so should get free money from the bank for that. Because of them it now needs to be documented that we’ve been told and agree with every mind-numbingly tedious aspect of the account.

  • Mike says:
    8 Oct8 October 08:04

    I’m going with the MBNA AA visa card to simply keep my small number of AA miles live and ticking along.
    BMI cards have now been shredded, as will the rubbish replacements I got offered (basic card)

  • Stuart says:
    8 Oct8 October 08:20

    Another fellow “no rewards visa card” offered here. Never paid interest or a fee for the BMI card.

    Back to BA Amex and AA visa/amex for me.

  • Our_Kid says:
    8 Oct8 October 08:21

    Well I called in – really good Customer Agent on the line but yes it’s a basic card or reapply for something new. I like the look of that MasterCard but they’re not making any money out of me which is a shame for them!

    If you call they will ask for the letter reference in the top right of your letter. That seems to be the code determining what you will be moved onto.

    Hope this helps!

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