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British Airways moves credit card fees to a flat 1% ….. as Virgin Atlantic scraps them

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According to reports in Business Traveller, British Airways is changing the way it calculates credit card fees on bookings from 14th December.

The current charge is a flat fee of £5 per booking, with no fee on award bookings or when debit cards are used.  This is obviously unattractive on low value bookings, although in those scenarios you would presumably have no liquidity problem if you used a debit card anyway.

The new structure is a flat percentage rate of 1%.  This is obviously attractive for a £39 one-way economy flight to Manchester, but a nightmare for anyone paying for a number of premium tickets.

Whilst the card fee is capped at £20, this is per ticket and not per booking, so a family of four could still be faced with an £80 bill for four Club World tickets.

It is hard to claim that the new structure is ‘unfair’.  I would only point out you are more likely to put an expensive ticket on a credit card and may not have the option of using a debit card if you do not have the money immediately available.

There does not appear to be any discount for British Airways credit card holders.

It is not clear if the fee will continue to be waived for anyone who states that their credit card is registered outside the UK.

BA Premium Plus Amex

Whilst Virgin scraps their card fee …..

It is possible that British Airways chose to do this because Virgin Atlantic has always had a similar – higher, actually, at 1.5% – card pricing structure.

However, with great timing, Virgin Atlantic dropped all credit card fees when it relaunched its website last weekend.

Whether this survives now that British Airways is charging up to £20 per ticket remains to be seen.


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 (115)

  • reader says:

    OT/ Was refused the 15 quid allowance at the T5C Starbucks today, did BA scrap this benefit for silver members?

  • I always thought it was ridiculous that BA didn’t waive the fee for BA Amex holders, but to now increase the fee dramatically is just insanity. Ok so the travel/holiday industry seems addicted to credit card fees, but surely for their own card holders they shouldn’t be charging this.

    Crazy!

    • the real harry says:

      they’re drastically reducing the fee for most people, I think you’ll find

      work out the % of tickets that cost less than £500 vs those that are £500+

  • Egg says:

    Is 1% really a problem if paying with a BA AMEX as you get double avios anyway?
    Ok, your effectively buying AvIos! but at least its not ‘dead’ money

  • Kiran says:

    I have been saying this for a while but it was hard to dump BA when I was living in London. The convenience of taking direct flights was too convenient. However, now that I live in the bay area, it isn’t hard for me to dump BA and/or even trying to chase status with any airline for that matter. I have Amex Plat which gets me into a goodly number of lounges. I can find the cheapest business class flight which often tends to be a pretty decent airline. Most airlines have a better business class seat than BA anyway. If I do have business class tickets, I can get into their lounges. Within the US though,, the airline lounges so crappy that I don’t really care for them anymore. It is worthwhile to buy a cheaper ticket somewhere and spend the money you save on a decent meal/drink at the airport. When I need peace and quiet, I will use one of the Amex or priority pass lounges. This is actually quite liberating. So dear British Airways, once I use up my 2-4-1 voucher, I will have to part ways with you and let you convince me to fly with you again. I don’t suppose you (BA) care much either way but your loss is someone else’ again.

    • Talay says:

      To maximise Amex Reward Points (assuming 2 people and min spends can be achieved in a week).

      I am trying to map this in Excel and I wonder whether the best strategy needs you to refer and cancel ASAP or to keep open a while ?

      Person 1 referral for Plat by 3rd party = 35000

      Person 1 refers Person 2 for Plat = 18000
      Person 2 receives referral from Person 1 for Plat = 35000
      Person 1 refers Person 2 for Gold = 9000
      Person 2 receives referral from Person 1 for Gold = 22000
      Person 2 refers person 1 for Gold = 9000
      Person 1 receives referral from Person 2 for Gold = 22000

      Person 2 refers Person 1 for Plat = 18000
      Person 1 receives referral from Person 2 for Plat = 35000
      Person 2 refers Person 1 for Gold = 9000
      Person 1 receives referral from Person 2 for Gold = 22000
      Person 1 refers person 2 for Gold = 9000
      Person 2 receives referral from Person 1 for Gold = 22000

      Assuming a quick referral you only need your Platinum open long enough to refer your other half for a Platinum and Gold and receive your rewards don’t you ? Perhaps only a month or two ?

      Person 1 referral for BAPP by 3rd party = 9000

      Person 1 refers Person 2 for BAPP = 9000
      Person 2 receives referral from Person 1 for BAPP = 26000
      Person 2 refers Person 1 for BAPP = 9000
      Person 1 receives referral from Person 2 for BAPP = 26000

      So is the maximum theoretical per “cycle” 230,000 MR points and 70,000 Avios ?

      If you open in Month 1 and refer and receive in Month 2 then cancel in Month 3 then you can re-apply in Month 9 I assume, making a theoretical 4 cycles in 3 years ?

      As you would have times when you were without an Amex MR card, you would presumably either have to stagger the Plat / Gold applications to overlap ?

      What about the business Plat card with 45k ? Can you churn that to get extra MR ?

      • Tilly71 says:

        Platinum annual memberships I thought were now non refundable, so you pay the entire years fee, if this is still correct your paying £900.

      • Rob says:

        You can’t get a bonus on a business card if you have a personal card.

        • Talay says:

          So no bonus on any business card if you have any personal card ?

          But swapping out the plat personal for the plat business would add 10k to each application I guess or 20k per cycle.

          However, further thinking it out, if you want to benefit from the continual referrer’s bonus for platinum, one of you would need to have a plat card all the time as you cannot refer for a platinum from any “lower” card. Whether that extra 18/36k is worth the additional pro rata fee I don’t know as I haven’t yet finalised an application / cancellation / re-apply timetable.

          I just feel we are missing out when loyalty to 2 x BAPP is wearing thin.

          The question still remains though where to put the majority of Amex spending – circa £150k per annum ? Even these account requirements would only suck up £20/30k of that. At the moment it goes into BAPP but I wonder whether a hotel points card might be better value given I was able to pick up Etihad business on LHR-BKK for £1166 the other week.

      • Cormac says:

        I didn’t think you could mix the Plat and Gold like this – my understanding was that you had to leave six months between them. Happy to be told that I’m wrong – it will give me another source for MR points.

  • Rob says:

    Did this a few weeks ago, ok deal

  • Talay says:

    So if you are playing with Plat then you never bother with Gold as the bonus is less ? If you need 6 months between holding either Plat or Gold, then why apply for Gold instead of Plat ?

    And if you can churn the business Plat, why bother with the regular Plat as the business bonus is 45k – assuming there is a referral for the business card ? If not then I understand the logic for using the regular Plat.

    How do you keep the MR points open if you are closing the accounts so often ?

    • mark2 says:

      Therein lies the rub! (W Shakespeare acknowledged).
      When you close the account you have to do something with the MR points. You can transfer them to another MR earning but you can only have one at a time so you will have to convert them to airline, hotel etc. points at each cancellation.

      • Talay says:

        Can you not keep a green card with MR benefits open and still get Gold and / or Plat bonuses ?

        • Alan says:

          Noo – you need to have your MR account closed for 6 months to get the sign-up bonus again.

          • Talay says:

            Thanks Alan, the closing of the MR account for at least 6 months makes complete sense rather than not having this card or that card etc.

    • Rob says:

      Opening a business card is more bother (Amex requires proof of your business, potentially including accounts) and the spend target is higher, at least on Plat.

  • NFH says:

    I think this is the right thing to do. The previous system whereby the high percentage fee paid by cheap ticket buyers subsidised a low percentage fee paid by expensive ticket buyers fell foul of the Consumer Rights (Payment Surcharges) Regulations 2012, which says “A trader must not charge consumers, in respect of the use of a given means of payment, fees that exceed the cost borne by the trader for the use of that means”. If BA incurs a percentage charge, then it should pass on a percentage charge, not a fixed charge with some customers subsidising others.

    • Talay says:

      But as credit card charges have come way down and conversely debit card charges have gone up ! BA is charging way more than the cost at 1%.