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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? – July 2021 update

If you are looking to apply for a new credit or charge card, here are our July 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. Here are the other top current deals:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee 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 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

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

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)

  • Nick says:

    OT – Tesco – apart from Surrey Quays has anyone confirmed any for the ‘big hitters’ (JL/Amazon)? Thinking the Heathrow/M4 corridor, Southall to Reading. Slough and Maidenhead have nothing, anyone got anything nearby confirmed, maybe Drayton or Bulls Bridge?

    • Gavin says:

      I saw quite a few Amazon £25 in the Tesco Reading Extra (Kings Meadow) today, didn’t see any John Lewis but the gift card section was about to be restocked

      • Sussex bantam says:

        If you fancy two junctions further round m25 then addletone has a full selection including Amazon and JL

        • Polly says:

          Have been in addlestone daily since launch, and not seen a single JL card.. Weird. Desperate to stock up tho.

      • Danksy says:

        plenty on offer in bristol

    • Genghis says:

      I don’t follow the second “50p back with my former Diamond Club Card”. Is that because you’re spending another £50 in Waitrose? If so, why not buy another JL GC in Tesco?

  • Jim cleaver says:

    I don’t expect to get anything. After spending about £30k per month for 7 years, and £100k per month since the HMRC fees dropped in vat, paye, and tax, I think MBNA will be glad to see the back of me.

    • Andy says:

      Add another here that’s received the no reward card. Time to consider my options moving forward I guess.

  • James Slater says:

    Like many others, I got my letter today, offering nothing. Can anyone recommend a replacement where I can earn AVIOS to complement my BA AMEX Premium Plus card for use in stores that only accept Visa / Mastercard. I need something that either earns AVIOS directly, or anything that I can convert to AVIOS.

  • Third Passport says:

    My Diamond Club Mastercard is getting replaced by the … “Nothing” Mastercard. The Mastercard Priceless experiences benefit has had no value to me since it was launch. Never used it on any of my MCs.

    I’ve never paid any interest on the card. It was my default card for non-Amex spend.

    Sad to see it go and the number I had memorised over the years changed 🙁

  • Toby Warren says:

    I used to put c£35k a year through my fee free MasterCard, didn’t pay interest. Been provided with the reward free option.

    Bye bye MBNA.

    Will get the Lloyds avios card (for fee free overseas spend) and probably the John Lewis cash back card to mop up any non Amex spend

  • signol says:

    Another offer of zero for me. I may keep the card gathering dust as it has a high limit, and the Lloyds I’m applying for probably won’t match it. High limit has been useful for buying 4 same day tickets to nz on…

    • Aeronaut says:

      If you have a high limit on one card, then that might harm your chances of getting a high(er) limit on another card, as lenders can take into account the total amount of credit available to you.

  • Londonbus says:

    I got nothing either. Spent £500 – £1,000 per month. Paid in full – never paid a penny in interest.

    I am not a profitable customer for MBNA.

    • DC says:

      Also got offered zero. Been a customer for many years, though apparently not a profitable enough one. Going to close all my MNBA cards and go elsewhere.

  • Jon says:

    I mean it does make sense, with the reduction in interchange fees. MBNA may have made either a small profit or acceptably small loss when giving away avios per £ spent before, but with the new regs in place those who pay no interest/fees are loss-making for the company.

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