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What prompted this article is that Avios has just withdrawn the refer-a-friend bonus it was offering for the Lloyds Avios Rewards cards.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

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 (128)

  • Nick says:

    I wonder if this is why I received an email from Lloyds regarding my Duo credit cards. Asking if I would like to complete a quick survey regarding their cards!! Nearly at my £7k for this year so I hope it doesn’t get pulled. Especially as I’ve just cancelled my Amex Rewards and BA Amex cards

  • Streetwise says:

    I am a big fan of this card but I wish Lloyds would show you on their website when you have reached the £7k a bit like AMEX has a countdown

    • tony says:

      It shows on the Avios website under “vouchers” and seems to update very quickly.

      • Genghis says:

        But only once you’ve actually hit the £7k spend. Nothing shows if you have spent <7k

        • Streetwise says:

          thanks ! i am going to have to call them because my total spend since anniversary has been more than £7k !

          • YL says:

            With Lloyds you can actually call them to request an anniversary/annual spent confirmation. However, you will need to get to speak to the right CS( hang up and try again is the approach), who will then send a request to the admin team. If you are ‘lucky’…you will receive a written confirmation as to how much you have spent so far…

            Lloyds customer services team could be really painful to speak to if you are used to the Amex CS in Brighton. This is a bit of lottery….might not worth your time. The CS are unfortunately generally clueless and will tell you this is not something they will do. They often want to transfer you to the Avios team as Alan mentioned earlier or even correct a request was sent through but nothing was sent out, you will need to follow up again. Last time I requested it I was told there was a backlog and waiting time was 2 months.
            To sum up, it is best to use your spreadsheet:))

  • flyforfun says:

    Its the beginning of the end. Make hay while the sun shines is all I can say. 🙁

  • the_real_a says:

    I would miss this card deeply. For the past couple of years i have used the voucher for a long haul J upgrade. This time

    LBA to SIN and BKK to LBA

    Total avios 162,000 but with the voucher i paid 84,000 a saving of 78k avios.

    • Will says:

      Agreed. It is a serious perk. Take it they could drop the existing agreement on existing cards? I’m definitely going to keep it in the locker.

  • the_real_a says:

    Also don’t forget – if you have the AMEX plat insurance you can pay for your flight and hotel with LLyods AMEX (and benefit from the 0% FOREX) and still qualify for the insurance benefits.

    • the_real_a says:

      I was 100% sure before you commented, but i have looked back through the policy document and come to question myself.

      It looks like i may have been mistaken 🙁

      • Alan says:

        I’m afraid so – you can use any *AMEX-ISSUED* Amex card, but not any Amex at all.

    • the_real_a says:

      Thanks for questioning my comment, i may have made an expensive mistake in the future!

      • Genghis says:

        No problem 🙂

        • Will says:

          Take it that is the whole holiday so if you’re booking multiple components or any single part of the hotel, flights etc not booked through Amex and the insurance is void? Just for that particular component or the whole lot?

  • Liz says:

    We took this card out in December and got the refer a friend bonus no problem, however the first months points have not transferred. LLoyds have said this is a known issue and that there is a problem with linking the Lloyds a/c to the Avios account. The referral bonus comes from Avios which is why it paid in ok. Was told we will get the points eventually but it could be months. I know from past comments that others were having this problem – has anyone had it resolved and their points credited. Will phone them again at the 2nd statement if it doesn’t work again.

    • mark2 says:

      You will get them eventually.
      I would recommend leaving it a few months as they will pay you compensation.leave

    • TGLoyalty says:

      Chase up they will give you some compensation for your trouble 🙂

      I called to query 1200 miss Avios a couple ties and ended up getting 10x the value of my avios in compensation, with no prompt from myself, and then the Avios a few days later 🙂

    • Stephen Reid says:

      I had this exact same problem, it took about 4-5 months to get it sorted. Escalate it to a complaint if the points don’t appear soon. I had my fee refunded plus compensation making it up to £96. You have to ask for it. Lloyds regularly phoned me with updates and once the complaint was resolved they gave me another £100 for my trouble.

  • Richard says:

    what does “Lloyds does not allow ‘churning’,” mean ?

    churn is the process of leaving one provider and taking your custom to another. So Lloyds doesn’t allow you to give up the card and you must keep using it forever? How can they enforce that?

    I don’t consider “churn” to be leaving for a while and THEN going back to the same supplier later. this is not what “churn” is.

    • Alan says:

      You might not consider it churning but it is 😉 Clearly a provider can’t force you to keep the card, but they can certainly either refuse a subsequent application or can say you can have the card but without the sign-up bonus.

      • Richard says:

        doesn’t match the explanation of “churn” I find on the internet. it’s explained as “leaving”, not “leaving and then going back”.
        https://en.wikipedia.org/wiki/Churn_rate

        • Alan says:

          Well with Wikipedia we can always edit it. I’m afraid I still don’t get your point though – the key thing is opening a card, hitting a target to receive a bonus then closing the account. Whether you then sign up with another provider or after a period reopen the same card is irrelevant, you are still opening the account only for the benefit. The problem is if the card issuer doesn’t want previous customers to reapply – as now happens in the USA with Amex (although they still get much bigger sign up bonuses and better cars benefits so I’m not feeling that sorry for them).

  • Will says:

    Rob – re. Virgin MBNA – was shocked by the credit limit of £2k given to my wife. Is this a trend for new applicants or she is being given special treatment? She earns pretty well & on an NHS income so I would have thought a surer than surer risk profile?

    • Rob says:

      My wife just got £20k from Virgin, a month after they gave me £20k on my Lufthansa card (and I still my BMI card at that point with £20k on it!).

      • Will says:

        Luck you!! Maybe the public sector doesn’t get the stable rep it used to?

        We have just moved so maybe that’s factored into their assessment?

        Maybe I’m just reading too much into it but it does rather reduce our earning.

        • Genghis says:

          Does your wife have any other cards with MBNA (or even Lloyds though I seriously doubt they are that speedy to integrate anything…)?

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