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Is the Lloyds Avios Rewards credit card about to be dropped?

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For clarity, this is a purely speculative article – but the smoke signals seem to be there.

When the Lloyds Avios Rewards credit cards were launched, I was initially sceptical – apart from the hugely generous offer of no FX fees on foreign spending.  Over time I came to appreciate the package, especially the way that the upgrade voucher benefits solo travellers who get no value from the BA Amex 241 voucher.

Feedback about Lloyds customer service was shocking.  It has not improved in the last four years.  My own experiences were just as bad – after I paid my wife’s bill from my bank account (a not uncommon thing, you might think) her cards were frozen for ‘suspected money laundering’.  They would only be unlocked when I went to a Lloyds branch and showed them a statement from my HSBC account showing the money going out – but my next HSBC statement wasn’t due for 3 weeks and they would not accept a print from an in-branch machine.

What prompted this article is that Avios has just withdrawn the refer-a-friend bonus it was offering for the Lloyds Avios Rewards cards.

This scheme has run for the last three years.  For Avios and Lloyds it was a very cheap way of recruiting new customers – and because Lloyds does not allow ‘churning’, they were likely to be long term customers too.

Why would Avios and Lloyds do this? Potentially because the cards are about to be scrapped.

Here are some more reasons why the cards may be on the way out:

Over the last few months we have seen Lloyds scrap the £140 Premier Avios card.  TSB has also scrapped its two Avios cards having dropped the ‘refer a friend’ scheme a few months earlier.  To be fair, these products were all stinkers.

I understand that American Express is cancelling all of its licensing agreements.  Lloyds, MBNA and Barclays will have to stop offering Amex cards in the medium term.  This means that the Lloyds Avios Rewards card would become a pure Mastercard package.

At 0.25 Avios per £1 on the Mastercard, with no companion Amex, Lloyds is going to struggle to get many people to pay £24 per year for the card

The core selling point of the Lloyds card – no FX fees and earn Avios on foreign spending – is not sustainable.  In a world of 0.3% interchange fees there are only three ways to make money with a credit card.  One is the annual fee (not sustainable as a pure Mastercard paying 0.25 Avios per £1), the second is interest charges (which are minimal on loyalty cards with a high income professional card base) and the third is the 3% fee on foreign spending (which Lloyds has voluntarily given up).

We know that American Express has agreed a wide-ranging credit card deal across IAG.  I understand this includes options for Ireland and a Vueling card for Spain.  The Lloyds card gets in the way of this.

We know from the recent Investor Presentation that all of the Avios schemes are to be merged onto the avios.com platform.  Aer Lingus AerClub shows how this works – your AerClub number is also an avios.com number, and when you want to redeem you have to visit avios.com.  When the distinction between avios.com and BAEC disappears, there is no need for both Lloyds and Amex credit cards.

Whilst probably not part of the original reasons why Avios may want to drop Lloyds, the fact that Lloyds will now also be issuing the Virgin, American, United, Lufthansa, Emirates and Etihad cards will not go down well.

As I said at the top of the page, this is pure speculation on my part.  If we’re honest, though, it is difficult to see how these cards could continue to exist in their current form.


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

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

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American Express Platinum card Amex

The Platinum Card from American Express

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Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

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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

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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

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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 (128)

  • Susan says:

    I will be very sorry to lose this. As someone based 50/50 UK/overseas the Lloyds card is my go to plastic ex-UK unless I need the Amex Plat travel protections.

    • Jules says:

      Same here. It’s actually a pretty amazing card combo for frequent travelers.

  • Will says:

    Wow – lots to ponder here! The companion offer & lower yearly rate is the reason for this card. The master card option is pure tokenism. Might as well just get the Virgin card for non-Amex spend if you can make it work.
    You mention Lloyds issuing a MBNA eqv partnership is very interesting. If those cards also offered an eqv companion deal, I’d definitely quit Avios. As it happens the 2 for 1 is incredibly competitive even if one does have to deal with a sub-standard product.
    I’ve stuck with a Lloyds account because of these cards so interesting to see where they go.

  • Nick says:

    It’ll be a shame if these cards were dropped, being predominantly a solo traveller it is my travel companion. It’s still shown on the Avios website, Rob you’re normally right in these circumstances so I shall watch very closely.

    • Fenny says:

      Seems like we should start a HfP Solo Travellers 241 Club!

      • Nori says:

        +1

        • Alan says:

          Haha nice idea!

          I must say it’s been interesting how many comments this article has garnered – I know the BAPP normally gets most of the love on HfP, but it just shows how much appetite there is for this sort of product too. The CS leaves a lot to be desired, but as an overall package it’s decent.

  • Nick M says:

    I have had the free version (originally Lloyds/TSB card — taken out early 2010 I think)… does anybody know what benefits there are on this? Aside from 1 Avios per £1 Amex / £4 Mastercard?

    I only really use it for ShopSmall but could be missing a trick!

    • Julian says:

      Only benefits on the free free Legacy Avios card are those that you outline.

      I enquired several times about paying the £24 fee to get the extra Avios and Upgrade voucher but ‘t they told me I had to be re credit checked to do so, which I wasn’t that keen on due to changed employment circumstances from when I got the card.

      Eventually earlier this year I threw caution to the wind and went through a half hour application process on the phone and passed the credit check for the £24 fee based card. But then they told me I couldn’t have it in person without going to a branch and proving my identity with a passport to one of the personal finance interviewers. Then they couldn’t offer me such an appointment in the nearest branch for 2 weeks (pretty annoying as I was going abroad 8 days later for several weeks). Only after I made a huge fuss did we search round 20 other branches and find one that had just had a cancellation of an appointment for later that afternoon. I raced over there only to find my interviewer dressed in Hawaiian garb as it was charity dress down Friday. Anyway he photocopied my passport but could not explain why they needed to check my ID when I had lived at my home address for 20 years and had the fee free Avios card for 8 plus years and always operated it responsibly. Seemed to be a classic case of corporate back covering gone mad.

      So now I have had the £24 fee flight upgrade voucher card since September but found in my stay in Spain for 5 weeks in Sept/Oct that Amex acceptance is very spotty indeed in Spain and comprised essentially only of the Eroski supermarket chain (admittedly as ominpresent as Tesco) and almost every single petrol station. Almost everywhere else only does Visa and Mastercard. In my 15 years of using exchange rate fee free Nationwide Visa credit and debit cards plus Halifax Clarity Mastercard and then a Metro Bank Mastercard debit card (after Nationwide started charging fees for cash withdrawals in Europe) I never previously noticed this problem of Amex near total non acceptance.

      So anyway now seems like I may have paid my £24 but will never get an upgrade voucher. Also if Lloyds have acquired MBNA my longstanding MBNA card with a £16,000 credit limit is gong to fall in to the same credit check database as Llloyds who have only allowed me a £2,500 limit………………..

      So all in all not a happy bunny about Lloyds’s recent and likely future actions. Seriously annoyed about them acquiring MBNA. Almost anyone else would have been a better option for me.

      • Genghis says:

        Mastercard purchases also count towards the £7k spend target, although being able to use the Amex would of course yield more avios.

  • Jordie says:

    I applied and got accepted for this card yesterday. Im closing my amex gold and BAPP so i can churn and need another card to use. Hopefully this wont be dropped.

    • jamie says:

      have u tried the spg amex, great little earner?

      34k avios for 2k spend

      • Genghis says:

        +1 but better off keeping them as SPGs IMO.

      • Viktor Torstensson says:

        How do you get 34k avios for 2k spend for the SPG amex? I must have missed something!

        • Genghis says:

          Be referred for SPG (11k SPG), spend £1k (1k SPG), refer OH for card (5k SPG), OH spends £1k (1k SPG) and gets bonus (11k). One person has 17k SPGs, the other has 12k SPGs. If live at same household, transfer across to OH or vice versa for 29k SPGs. If transfer over 20k SPGs to BA get a 5k bonus, so the 29k SPGs become 34k avios.

  • BrianDT says:

    So just what card nowadays is the best for getting hold of cash overseas, with or without Avios…Curve,Supercard, Revolut, a regular FeX card,Monese, Halifax,Post Office,..the list goes on.

    • Fenny says:

      I use my Halifax card for cash withdrawals if I need it, then do a bank transfer to cover it. I may have paid a handful of quid in interest in the last few years, but very rare and very little. It’s far easier than worrying about trying to link a card to something else and hope it works, or posts at the right fx rate.

  • Lev441 says:

    Prematurely written article Rob? Offer seems to be extended!

    • TGLoyalty says:

      Probably prompted them to sort it 🙂

      Though suspect the article needs an edit/comment at the start to say that its been extended for another year

      • Lev441 says:

        Yes, thought that may be the case too but decided to play devils advocate

    • Rob says:

      Great. I have it in writing from Lloyds that it is dead.

  • Nate1309 says:

    I still have the old Duo pack that has a different set of rules. Do you think these are for the axe too Rob? The MC is the one constant card in my wallet 🙁

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