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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.


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

If you are looking to apply for a new credit or charge card, here are our September 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.

The following offers will end soon:

  • 2,000 Virgin Points on Virgin Atlantic Reward Mastercard (ends 15th October)
  • 30,000 Virgin Points on Virgin Atlantic Reward+ Mastercard (ends 15th October)
  • 10,000 Avios on British Airways American Express (ends 2nd November)
  • 40,000 Avios on British Airways American Express Premium Plus (ends 2nd November)
  • 60,000 points on The Platinum Card from American Express (ends 2nd November)
  • 30,000 points on American Express Preferred Rewards Gold (ends 9th November)

Here are the top current deals:

British Airways BA Amex American Express card

British Airways American Express

10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

40,000 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 – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

60,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards credit card

Virgin Atlantic Reward Mastercard

The UK’s most generous free Visa or Mastercard at 0.75 points / £1 Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

30,000 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

60,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios 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 (122)

  • Genghis says:

    This whole credit scoring remains a bit a black box to me. I hear on the one hand having a low credit utilisation and having cards for a long time being a good thing yet also having dormant cards you don’t use as a bad thing. If I kept the (now worthless) Visa they’re offering me, what would that do to my credit score? Or indeed I cancelled? Any experts?

    N.B. I know credit scoring is almost arbitrary. I’ve never been rejected for a credit card but my score although high on all 3 bureaux does jump around a bit due to the amount of churning I do.

    • Callum says:

      The score isn’t only arbitrary, it’s completely useless and I sincerely hope you aren’t paying to receive them.

      Dormant accounts aren’t a big issue, credit utilisation is. The only major downside to keeping it on your report is if a lender feels you’ve already got all the credit you can handle. Unless it’s your oldest credit card account, I probably wouldn’t bother to keep it just for that.

  • Andrew M says:

    Thanks for that tip Trevor. The Diamond Club card is the one I’ve held for the longest time and by a wide margin. I was going to cancel it but I’ll now reduce the limit on it (£100 is the minimum) and perhaps transfer the credit limit to another MBNA card.

    • Andrew says:

      You think that having a card on your account with a £100 limit is a good thing?

      Imagine you are a credit sanctioner with no access to your mental process…

      “Why does MBNA only trust Mr M with a £100 limit?”

      Is what would probably spring to mind.

      • Andrew M says:

        Good point, I hadn’t thought of that. I have several MBNA cards with £100 limits as well as a couple with very high limits. I m not sure if a lender would look at the whole MBNA picture when making a decision. It hasn’t caused me any problems that I know of – Amex Platinum and HSBC Premier World Elite taken out recently without difficulty. I take your point though and it may be time for a cull of the £100 cards.

        • Callum says:

          Unless it’s changed in the last few years, they’ll have no idea whether your other cards are MBNA or not.

          Though I’d expect the underwriters will put a little more thought into it than “why aren’t they trusted with more”. If you have years of on-time payments and stay within the limit, and have decent amounts of credit elsewhere, I think it’s fairly obvious what you’re doing – even without an ability to mind-read! MBNA wouldn’t suddenly slash your limit to £100 (they can see your limit month-by-month) – if you were that much of a risk they’d close your account outright.

          • Andrew says:

            We’ve always had a comprehensive break-down.

            I’m not sure why you don’t.

  • Vince says:

    Well due to ill discipline and a little bad luck I ran up a pretty big balance on my BMI mastercard. I have now managed to get it under control fully paid off, however, over the years MBNA have done very well from me, far better than the should. I got offered the no reward card. Probably for the best!

  • Planeflyer says:

    I opened my letter just now – no surprise to see I’ve got the basic, no-frills MBNA card 🙁 Sadly, it’s my only card that works with Android Pay, so i’l keep it as a backup for a while, but I might be applying for the Etihad card soon.

  • YL says:

    Commented on another post yesterday, I am another one that got the basic Visa card….
    It is very annoying as the Bmi Amex/Visa combined cards are also my longest holding credit cards at the moment. In a way I like to keep a card that has a long history, but at the same time, I really don’t want a card that I know I will not even use just sitting there…

  • Jerry says:

    Yes I also got the no reward card offer. Phoned immediately and cancelled – reminding them that they wrote a while ago promising an exciting new reward. Never paid any interest, put all non Amex spend on it and paid in full every month. Have earned many thousands of avios and not unhappy to kiss goodbye to MBNA’s terrible customer service. Wondering where to put all non amex spend now. HSBC doesn’t work for me. Maybe Lloyds free card is better than nothing, or Tesco?

    • Jerry says:

      OK decision made, just signed up for Tesco master card using the money supermarket link Raffles mentions in his Tesco review – which still offers 1000 CC points for sign up (with a spend). I have the grandfathered tesco avios earning rate so while not brilliant will be better than nothing.

      Rob’s link to money supermarket is under the photo of the credit card half way down the page. ONLY using the link will offer 1000 club card points

      https://headforpoints.com/2016/01/01/review-tesco-clubcard-mastercard-credit-card/

  • flyforfun says:

    Nothing for me either, despite an average of £10K spend and up the past few years. I cancelled my BAPP card and went to the free one, but haven’t transacted on it since around 18 months ago. Maybe it’s time to upgrade back onto it.

    I have MBNAs AA card to keep that alive. Maybe I’ll ask for most of my credit limit to be moved over to it.

    The Mastercard “Priceless” is, as posted above, pretty worthless. I did get 10% of at Liberties once, but it’s not a place I shop often.

    I think I will keep the card open just to cost them money. No transactions, but find ways to generate costs for them. 🙂

  • Volker says:

    If we all keep our now pointless no-rewards cards but don’t use them, we will eventually receive a rewards offer from MBNA to “win us back” – wait and see!

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