The Lloyds Avios Rewards credit cards were withdrawn to new online applicants on Wednesday.
Before we go on, there is one important point to make clear. According to a statement Lloyds gave to me yesterday:
“American Express is discontinuing its existing UK licensing arrangements. As a result, we are no longer accepting applications for American Express credit cards online. Applications in branch and by phone will continue to be accepted for a period.”
If you had been planning to get yourself a Lloyds Avios Rewards credit – and there are good reasons for doing so, as I will remind you below – you should still be able to get one by calling or visiting your local branch.
Why did this happen?
You can’t say you weren’t warned.
American Express announced its intention to withdrew its licences to Lloyds, Barclays, MBNA and TSB to issue Amex-branded credit cards a couple of years.
Since then, all of the third-party Amex-branded cards have been closed. Except this one. Lloyds Choice Rewards, Lloyds Premier Avios, TSB Avios, a couple of Barclays products, Virgin Flying Club White, Virgin Flying Club Black, United Airlines, American Airlines, Lufthansa Miles & More, Etihad Guest, Emirates Skywards, Emirates Skywards Elite ….. all withdrawn.
Only the Lloyds Avios Rewards cards hung on, Arsene Wenger style. I always assumed that they had received a stay of execution because of the British Airways relationship with American Express.
There is a second reason why the cards had no future.
The other big change on the way is the ‘one Avios’ IT platform. Rather like Miles & More or Flying Blue, within a few months all of your Avios activity will take place on the avios.com website. As far as I understand it, you will NOT use ba.com for any Avios-related tasks.
As part of this, avios.com will cease to exist in its current form. There will not be two standalone UK Avios schemes, ie avios.com and British Airways Executive Club. BAEC will effectively take over the avios.com platform.
Whilst they could have muddled through, in reality there was no place for two sets of Avios credit cards under this arrangement, given that there will only be one Avios scheme.
It’s a shame to see the Lloyds Avios Rewards cards go
I was originally very sceptical about the Lloyds Avios Rewards cards, mainly due to the pathetic 0.2 Avios per £1 earning rate on the Mastercard. Although, from Day 1, I was very vocal about how impressed I was with the 0% foreign exchange fee on offer.
That was also a problem in the end. Foreign exchange fees are the major source of income in the new world of 0.3% interchange fees for cards where most holders are too wealthy to pay interest.
Two things changed my mind:
It soon became clear that the upgrade voucher, earned for spending £7000 per year on the card, was proving very popular with solo travellers. As a middle aged guy with a family, I had forgotten how much the 20-year old me would have valued the upgrade voucher and how I would have struggled to use the 2-4-1.
The Avios changes in 2015, which widened the points gap between Club World and World Traveller Plus redemptions, made the upgrade voucher more valuable.
I suppose I should also mention that I earned 1.1 million Avios from a crazy 1,000% bonus promotion that Lloyds TSB ran on the old Avios Duo card back in 2012. That story is here. They really didn’t know what they were doing …..
If you have the Lloyds Avios Rewards credit cards, they should continue to operate for a while. At some point you will presumably be transitioned to a standard Lloyds credit card.
In the medium term, it would be logical to see British Airways drop American Express and launch a Mastercard / Visa product. This could be with Lloyds or it could be with someone else. With the fees on the BA Amex card now capped following the recent EU court judgement, BA should see the value in a switch. They will get similar fees from Mastercard / Visa but billings will rise sharply due to the wider acceptance compared with Amex.
And then we have the new Virgin Atlantic credit cards which are coming soon …..
Want to earn more points from credit cards? – October 2022 update
If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.
EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable card perk – the 2-4-1 voucher Read our full review
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
The Platinum Card from American Express
60,000 points (SPECIAL OFFER), £200 travel credit and unbeatable benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and 1.5 points for every £1 you spend 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 Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
10,500 points bonus – the most generous Avios Visa 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.