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Get 15,000 American Airlines miles with the NEW MBNA Visa (no Amex) card

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And so it finally happened ….  We have known for some time, although it has never been widely publicised outside of HfP, that American Express had cancelled all of its licensing deals with other credit card issuers.

The first to be hit was TSB.  Barclays followed.  Lloyds, for now, is hanging on although the Lloyds Avios Rewards credit card is surely for the chop (in its current form) soon.

MBNA American Airlines credit card

MBNA is, by far, the largest issuer of licensed American Express cards in the UK.  It currently issues double packs of American Express and Visa / Mastercard credit cards for:

  • American Airlines AAdvantage
  • Etihad Guest
  • Emirates Skywards
  • Lufthansa Miles & More
  • United MileagePlus
  • Virgin Flying Club

Yesterday, the first card fell.

The free American Airlines ‘Amex and Visa double-pack’ was withdrawn from the market.  It was replaced by a new card pictured above.

There are only four things you need to know about this card:

It only comes as a Visa – there is no American Express partner card

It has an exceptionally high (stunning, frankly) earning rate of 1.25 American Airlines miles per £1 spent

It has an annual fee of £70

The standard sign-up bonus is 5,000 American Airlines miles, but until 22nd August that is increased to 15,000 miles if you spend £1,500 within 90 days

For legal reasons, there is a fifth thing you need to know:

The card has a representative APR of 38.4% variable, including the fee, based on a national credit limit of £1200

The offer is outlined on the American Airlines site here.

This card is a niche product but could herald a radical shake up for some people

These changes all stem from the 0.3% cap on credit card interchange fees which came in across the EU 18 months ago.  Whilst American Express is exempt from this – which is why you haven’t seen reduced benefits on any cards issued by Amex itself – Amex cards issued by other companies are not exempt.

This is why Amex cancelled its licenses with TSB, Barclays, Lloyds and MBNA.  There was simply no point in these companies continuing to issue combined Amex and Visa / Mastercard products – with a higher earning rate on the Amex – when the interchange fee on both cards was the same.

At 1.25 American Airlines miles per £1, this is the most generous Visa or MasterCard out there.  There is nothing which comes close.  Even if you earn six figures and are ‘allowed’ to pay £195 for HSBC Premier World Elite, you will only be earning 1 Avios, Asia Miles, Singapore or Etihad mile per £1.

If you have a lot of Visa or MasterCard spend, this card could be a revelation for you.  I know there are many Head for Points readers who put six figure sums through a Visa or Mastercard.

If you are self employed, you can pay all of your income tax, national insurance, VAT and PAYE for any employees with a Visa or Mastercard for a 0.38% fee.  At 1.25 American Airlines miles per £1, you would be paying 0.30p per mile.

The £70 annual fee is a stumbling block, of course.  You need to be spending quite a lot to amortise that.  If you are paying £35,000 per year to the Revenue, then your HMRC card fee at 0.38% would be £133 and your card fee £70.  That is £200 of outlay for (35,000 x 1.25) 43,750 miles which means 0.46p per American Airlines mile.  That’s more than acceptable.

Don’t jump in just yet

Even if you have huge Visa / Mastercard spend, I still don’t recommend jumping onto this card.

Over the next few months, it is likely that the Virgin, Lufthansa, Emirates, Etihad and United cards will see similar changes.  One of those may be more suitable than this new American Airlines card.

Should you get the card purely for the sign-up bonus?

If you already have some American Airlines miles then, yes, it seems a no-brainer for the first year.

The annual fee is £70 – this is NOT refundable if you cancel the card

You receive 15,000 American Airlines miles for spending £1,500 within 90 days

That is under 0.5p per mile, plus you will get miles for your spending as well

If you are not a big spender then it unlikely to make sense carrying on into Year 2.  For the first year, though, it looks good.

Do I qualify for the bonus?

The small print is strict:

This offer is only available once for every new customer applying for the MBNA / AAdvantage Credit Card.  Previous and existing MBNA / AAdvantage Credit Card Account holders are not eligible.

This implies that anyone who held the old Visa / Amex double pack cannot get a bonus on this card.

In practice, MBNA has a habit of giving a sign-up bonus again, irrespective of its rules, if it has been a couple of years since you previously cancelled.  I recently received my third ‘once per lifetime’ bonus on the Lufthansa Miles & More cards from MBNA.   This is certainly not guaranteed and – given that you are risking £70 here – I don’t recommend a fresh application if your only interest is in getting the bonus.

What can I do with American Airlines miles?

I don’t want to go into this here as the article would go on for ever.  There are a few key points to remember:

American Airlines is a oneworld member.  Any mileage seat bookable via ba.com on a oneworld airline can also be booked on American Airlines miles.

You will need a different amount of miles – sometimes more, sometimes less – because American has its own pricing chart.  Whilst Avios prices by flight, AA prices by trip irrespective of the number of connections needed.  At the most extreme, First Class to Australia is just 230,000 AA miles compared with 400,000 Avios if booked via BA.

American only adds fuel surcharges to British Airways redemptions.  This means that many redemptions have substantially lower taxes than if booked on Avios, including AA transatlantic flights.

American Airlines is a partner with Etihad.   This is an extra redemption option which Avios does not offer.  Etihad redemptions using AA miles need, ironically, far fewer miles than if you used Etihad Guest miles – and American doesn’t add the crazy fuel surcharges that Etihad now adds.

Your American Airlines education should start here with the reward chart for AA’s partners.  This is all one-way pricing so, for example, UK to Abu Dhabi on Etihad in their amazing A380 Business Class Studio would be 85,000 miles return.  You’d need £68,000 of card spend to earn that.

Unless you are a heavy credit card spender, I don’t recommend jumping into the American Airlines programme unless you already have some of their miles.  If you do already have an active AA account, or if you spend so much on a Visa / Mastercard that you could earn enough for a flight purely from card spend, this new £70 MBNA American Airlines credit card is worth a look.

You can apply via the American Airlines website here.


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 (104)

  • Devang says:

    Is this the new norm – an annual fee but receive a generous accrual rate? How long before the fee rises and the earnings drop?

    • Genghis says:

      The only constant in this game is change and as such you cannot plan too far ahead. You can only act based on info at the time. E.g. I was tempted by the Tesco premium card but along comes the debit card with same ongoing earning rate but no £5k bonus

    • Talay says:

      e.g. BAPP with rising fees, admittedly no absolute reduction in accrual but effective reduction in accrual due to higher fee and higher taxes and charges.

  • Jimmyjimmy says:

    If I read this correctly existing holders of the Virgin or United Mbna visa/Amex cards are eligible for the bonus?
    J

  • Cal says:

    Any ideas what will happen to the Virgin cards? I was planning on signing up to the White card before the 28th to take advantage of the bonus points.

    • Rhi says:

      And similarly, what happens to spend made on the cards? I’ve had the Virgin Black cards around 4 months now and I’m on around £7k spend. I hope that any vouchers earned will be honoured, but worried that they won’t be. I intended to hit £10k on these and then just shelve them until next year and cancel once the vouchers appeared.

      • Genghis says:

        Hopefully it’ll be handled better than how Barclaycard handled the IHG card shelving.

        • Lawro says:

          Talking of which, despite cancelling the card, I’m still receiving emails telling me my statement is ready?!

      • Rob says:

        The current contracts will run on until expiry – we just don’t know when those contracts expire.

  • Andrew says:

    MBNA also issue their own “Rewards” & “Rewards+” branded double packs to the former Diamond Club members.

    I’ll be sorry to see that go.

  • Craig Strickland says:

    Due for renewal in August, I think I’ll cancel and wait for the dust to settle.

  • Bryan says:

    “These changes all stem from the 0.3% cap on credit card interchange fees which came in across the EU 18 months ago. Whilst American Express is exempt from this”

    Does anyone know why Amex issued cards are exempt? (I am pleased that they are, but just don’t understand why they are allowed to get a massive advantage compared with other providers)

    • Genghis says:

      Isn’t it something to do with market share?

    • Rob says:

      Amex is vertically integrated.

      With Visa and MasterCard, these two companies sit between the shop (eg Tesco) and the card issuer (eg MBNA). As an oligopoly, Visa and MC had been charging disproportionately high fees for purely processing transactions – remember that they have no money at risk, it is MBNA providing the credit. However, those fees were shared with the card issuer which is why MBNA is losing an income stream.

      As Amex controls all aspects of its chain (it issues the card and it controls the payment processing network) it obviously can’t rip itself off with high interchange fees. Shops can simply walk away if they don’t like Amex’s fees.

      • Polly says:

        Shame amex doesn’t reduce fees and thus get more shops signing up. ESP if they don’t pay a third party soonish!

        • RussellH says:

          Unless things have changed, Amex also have a completely different system of fee charging, and I know of at least one business that refused to take Amex solely because of that.They even had an explanation of why they did not take Amex on their homepage. These days, though, they no longer do any sales in house, so this no longer applies.

          It used to be the case that Visa/MC sales were credited to my bank within 48 hours, in full, and I was then invoiced for all the card fees at the end of the month.

          Amex subtracted their fee (which they called a discount) directly from each individual sale, and also took around 5 days to pay me. The Amex system does make bookeeping more complicated.

        • Rob says:

          It may happen, purely because the gap between Amex fees and Visa / MC fees is now a lot wider than it was, which will make shops start thinking twice about Amex acceptance.

          Frankly, I think Amex also has issues due to brand dilution. Their line was ‘our customers are wealthier and so you want to encourage them into your shop’. When people starting flashing a Nectar Amex I doubt the shop owner is convinced ….

          • imbruce says:

            I am going to scrap my Amex Platinum card as I don’t see the point of paying £450 per year to get travel insurance which is useless to me as AXA don’t cover
            pre-existing health conditions. They also have bad reviews on Google.
            Car hire insurance I can get that as and when I need it
            Lounge pass and hotel status, I don’t travel enough to warrant it.
            I just got a Hilton Visa card for Hilton Status, not fussed about status in other chains
            Gold status with Hertz, I already have that.
            Same with Avis
            Concierge service- again not bothered if I have this or not

          • Nick says:

            Exactly this. Interchange on visa and mc has reduced substantially so merchants on I++ are presumably negotiating lower fees with Amex due to the larger gap that initially existed from Jan 2015

          • Genghis says:

            I can see value in churning the card…

        • Luke S says:

          It’s worth pointing out the fee cap applies to what is charged to the merchant provider by the card network. The bank that provides the terminal will still charge much more than the cap. So really small merchants are still paying 1.2/3%.

          If you have a lot of international customers, Amex is worthwhile taking as well as it doesn’t charge extra for foreign cards, whereas accepting a Canadian Visa Infinite Card or World Elite (which are very common in Canada) could cost a merchant in the UK upwards of 3%.

          • RIcatti says:

            Unless I am missing something: why rent the card reader/terminal from an acquiring bank/it’s payment processing company, pay rental fees etc, when they can have a reader from Squareup for 39GBP but Squareup charges fixed 1.75%.

            There are payment processors around, iZettle, who DO NOT DIFFERENTIATE % of turnover they charge to business (e.g., does not matter Visa, MC, AMEX). % charged by payment processor only depends on the turnover itself — so acceptance fees can be as low as 1% regardless of Visa/MC/AMEX, money to bank account next business day.

            From my conversations with small business owners around Central London, most of them are unhappy about recovery time, ie, to funds hit their bank account. This seems crucial, and I don’t understand why nearly all small businesses are being run at the edge (minimal working capital). it suggests either low margins or the fact that business owners use the funds elsewhere.

  • Steve says:

    I currently use my BA premium AmEx for 90% of my spend. For the places that don’t take AmEx I use the free IHG card. Would it be worth it, or would the fee make it less worthwhile.

    Also, you say AA redemption rates can be lower and they price by journey rather than per fight. So would it make it worth ditching the BA card which comes with a companion voucher, or does that still trump AA?

    My local airport is MAN so there are OneWorld and Etihad options to burn AA miles. If the taxes and charges are lower, and less miles required than taking BA, perhaps it’s worth it?

    • pauldb says:

      The main issue is earning a substantial enough number of miles in another programme: you’ll still need to earn something like 100k AA per person to get a return longhaul redemption.
      With avios you can supplement your credit card earnings with Tesco, Amex bonuses, etc. Unless you spend massive amounts on the AA card how will you get there.
      Personally in your situation I use the Lloyds card, which you might look at getting before it potentially changes, if you can make use of the voucher which is a good return on £7k of MC spend. Or the Hilton card seems popular.

      • James A says:

        You can churn the SPG Amex and convert these directly into AA miles at 1.25 (when you account for the 5k bonus for transferring 20k spg). This won’t be a long term thing obviously with the merger.

    • Polly says:

      Steve,
      Much discussion on this very point before.. Only real problem is that it’s so much harder to accumulate miles due to having to spend or fly to earn, and min transfer ops. Ie from Amex etc. You can of course allot QR or OW miles to AAdvantage.. But more obstacles. If you are confident you have the spend ahead,then go for it. Gen consensus is avios easier to get hold of, despite the higher taxes on BA. No family account either, if that matters to you. Yes think the 241 still trumps AA on that count. AA not great on SH burning in UK, twice the miles needed tho. But it’s all personal choice in the end…

      • Dev says:

        To me this is a real game changer…..for context, I travel a lot but my new job gives a corporate credit card so earning via expenses is out of the question…..but the big thing now is that instead of having to split my UK home spend 65 to 35% in favour of an Amex card, I can put it 100% (approx £35K) onto a visa. Another brownie point is that I can diversify away from avios at a very generous accrual rate. I also echo what Rob says……wait and see what the other mbna airline options are before committing. Personally, I quite fancy Lufthansa if means that every 2 years, I can earn about 100K purely from spend.

        • Rob says:

          Yes, the downside of AA – which I didn’t stress in the article – is that apart from Etihad it doesn’t bring any new options to the table. You may need fewer miles or pay lower taxes but you are still restricted to the same airlines. Building a Star Alliance balance via Lufthansa gives you another 29 airlines to play with …

          • Dev says:

            I am also assuming that Visa only product will allow curve rewards to come into play as well to further offset the cost……my maths is terrible but am I right in thinking that every £1 spent results in 1p in curve rewards?……..in effect a 1% cash back?

          • Genghis says:

            If you have Curve blue, it’s 1.5% back, Curve Black it’s 3% black at selected retailers – most useful for me is M&S, Debenhams, HoF, Argos etc.

            I have a corporate credit card – actually issued by my bank – but my boss still lets me put work expenses through my own cards. Might be worth finding out the situation.

    • mark2 says:

      This sort of number of AA points can be useful for internal flights in North America.

      • Daniel says:

        Why is that? Avios tends to be better value for flights in NA.

  • Malc666 says:

    Has anyone had any success in paying SDLT with a credit card online, would it be the same fee as the HMRC charge?

    • Alex W says:

      Can be done apparently as long as you have the reference number.

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