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The Lloyds Avios Rewards credit cards bite the dust (at least online) ….. what now?

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The Lloyds Avios Rewards credit cards were withdrawn to new online applicants on Wednesday.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.

Full details of the card benefits are on the Avios website here.

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 all withdrawn.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.

(This is also leading to a shake out amongst other avios.com partners, some of whom will be dropped because they conflict with existing BA arrangements.)

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 2012That story is here.  They really didn’t know what they were doing …..

What now?

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 …..

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Comments

  1. Like rob, I benefitted from about 750,000 Avios on the old card. Was gutted to find that our wedding venue in ny didn’t take Amex though! I would have earned an extra 250,000 Avios from that one transaction!!

  2. Andrew says:

    Ok. So where is Flybe going to go with this? I use them from time to time, all my Avios have posted correctly, and they are a handy little extra.

    I can’t help but think that they’d make a really good Star Alliance affiliate. Something to plan around Air Canada’s changes in 2020?

  3. Lev441 says:

    I wish I was into the air miles game when the duo card had the 25 points per £1.. I could have done some serious damage!

    • The truth about that offer is even better. I knew Lloyds IT was rubbish. Most of the £40k I spent I refunded the following month. I expected Lloyds to just deduct 1x and not the 10x, but it was even better- they deducted nothing!

      This is because Lloyds treats UK and foreign spend separately. If you refund a foreign charge you only lose Avios if you have other foreign charges that month. Your UK earned Avios are not impacted. If you have no other foreign charges, you lose nothing.

      (This was all in the Avios Duo days, things may have changed.)

      • This is also part of the problem if trying to trigger the upgrade voucher – refunds seem to be erratically deducted from the annual spend to date so you can end up triggering the voucher earlier than planned!

      • Lev441 says:

        Sounds like a win-win to me! Who knows, maybe we’ll see another crazy offer on day… although hfp readership was probably a lot smaller back in those days!!

    • RussellH says:

      I had the card – and still do, but this is the first I have heard of that offer!

    • Polly says:

      We did do some serious damage! Set us up with an amazing avios balance too. Got us well and truly launched. We jumped ship from Q miles so fast.And they cocked up on a return avios flight..put my daughter and l in F coming back but charging Y avios. Just couldn’t believe our luck!
      So yes l think those days are ending soon.
      However thank goodness for QR sales. Long may they last. Even tho their prices are creeping up ex EU now.

  4. daftboy says:

    I think I know the answer, but are there any credit cards (or charge cards) perhaps in the UK market that charge 0% FX or otherwise incentivise foreign spending? I know there are some debit card options, less interested in those.

    • Tandem, and Aqua.

      • Colin MacKinnon says:

        Aqua has made no difference I can see to my credit rating – which in the top 10th having moved up significantly in the two or three years I have owned it.

        (Building a Grand Designs house on an airfield with a strange name and a weird address – i.e. no street name! – really hammered my credit rating at first!)

        The one issue with Aqua is that your balance sort of shows up as something different from the way it is displayed with other cards. So while all cards are paid in full every month by direct debit, it looks as though the Aqua card is carrying a balance!

        The other, of course, is a small – midway between 1k and 2k – credit limit. Though it did start at £600! But very easy to top up online with a debit card.

        Great for meals and drinks abroad, and low limit means not too many worries if it goes missing.

        • Roger I* says:

          Limits increase. Mine is now £5k, which is manageable for me.

        • simon says:

          Great house Colin. I enjoyed that episode.. Well done!

        • RussellH says:

          > a weird address – i.e. no street name! – really hammered my credit rating at first!

          An address without a street name is quite usual in rural areas. Streets names are things you get in those funny places called towns and cities.

          None of the smaller villages around here have any street names. This can cause problems with firms (Amex and Starwood come to mind) who use poor quality address databases, but should not affect a credit rating. My own postcode is particularly confusing for some. Everyone seems to believe that a number and a postcode uniquely describes an address – it does not. There are two addresses for my postcade that start with 1 and two that start with 2 (and one with 3 and one with 4), but they are not house numbers – they are the first character in the house name. More examples of badly designed IT.

        • Ooh – will need to go see if that’s on 4od to watch 🙂

      • Roger I* says:

        An unmerited slur. 😀 As a non-ex-bankrupt, I’m not aware of any reputational damage when using my Aqua gold card. 🙂 True, I only use it abroad and online, but no damage.

        I’m looking forward to using my new Tandem MC.

      • RIccatti says:

        Aqua is a brand for New Day Ltd, who also have cards for Amazon, Tui, House of Fraser. Many people are likely to have one of those, granted they likely to be the same mid-to-low range cohort in terms of credit scoring.

      • Andrew (@andrewseftel) says:

        Underwriters are unable to see the identity of a creditor on a credit report. Most don’t care anyway (they just plug metrics like # up to date accounts into a risk model).

      • Callum says:

        I don’t think underwriters share the level of snobbishness some people here have, even if they could see you have an Aqua card – which of course they can’t.

    • I’ve had Post Office MC for years – 0% forex

    • mark2 says:

      Halifax and Barclays Premium Travel (probably others).

  5. Prune says:

    If anyone fancies signing up for Billhop a referral bonus would be gratefully appreciated (have to pay schools fees soon)
    https://secure.billhop.com/r/b17e1

  6. Davide says:

    The end is nigh now I fell for those of us that do not have serious amounts going through our cards. I currently have the SPG and see that as a 2 points per £ card, owing to the 90k>168k avios transfer plus the hotel certificate. However, I am now certain that card will bite the dust soon….

  7. Well thanks to a HFP reader, whilst the application link has been removed from the website, it still exists and still works. Just managed to apply successfully for the card. Got a confirmation email so hopefully all still works. If I don’t get the voucher (which I’d still hope for) the 2.5 Avios per £ is still pretty decent!

    • Daniel says:

      Would you happen to have that link..?

        • Julian says:

          As its clearly an IT department error that this orphaned Avios Duo application page has not yet been removed there still seems a rather high chance that the submit now button for the application won’t work or that Lloyds will write back to say that sadly the card is no longer available to new applicants…..

        • Chris Palmer says:

          Worth a try nonetheless. I was just accepted.

        • Richard G says:

          Cheers. I just did this and the application went through, but annoyingly I need to go and prove my address as I’ve just moved house. Bah. I guess I’ll have to wait and see if I ever actually get the card.

        • flyforfun says:

          The link now seems dead.

        • Chris Palmer says:

          I received confirmation yesterday that I was accepted and will receive the card in the next few working days.

      • Julian says:

        Unlike the main Lloyds credit card website the Avios Duo card is still listed on the avios.com website at https://www.avios.com/gb/en_gb/collect/lloydsbank/already-collecting-avios-with-lloyds but I can’t see any link there to apply for it.

        I suppose no new applications suggests the card will disappear for existing holders within say 6 to 12 months as they obviously don’t want to have deal with lots of customers who are angry that their newly acquired card has been immediately abolished

        So the card might not even be disappearing for existing holders for another 12 months if you think about people having sufficient time to spend enough on it to earn the flight upgrade voucher……………

  8. William Kerr says:

    Rob are you saying that the BA American Express Credit Card 22.9% (no annual fee) will likely go ? If it does, will current card holders probably be eligible to hang onto and use their existing cards ? Or will the card cease to operate in your view.

    • Here’s my logic. Moving to Visa would probably add £2000-£5000 per year to average billings, assuming you can suddenly pay council tax etc fee free. Some people would add tens of thousands if they are paying business expenses.

      That money is worth having. The added benefit for BA is that you would not need a 2ndary credit card. It doesn’t help BA if we all end up with a BA Amex and the new Virgin non-Amex in our wallets. It is actually possible that the new Virgin product is the catalyst to dump Amex.

      Moving from Amex would also allow, say, the 241 threshold to be increased or the earn rate to be cut, because OVERALL Avios card earning would not change if we were all doing another £2k to £5k.

      • JamesB says:

        Any idea how long the amex contract still has to run with BA? If BA ditches amex would they not be tempted to also ditch MR to stop people using the MR cards as de facto BA cards or would tgey prefer to keep a finger in both pies?

      • Rob, although I agree it would increase billings by moving to Visa/ Mastercard, yesterday you said high spenders were a cancer for credit card companies. I’m not sure how the 0.3% interchange fee, the 1p per avios the CC companies allegedly pay allow it to be profitable and encourage greater spends. Seems to be a contadictions

        • That is true, which is why there is no easy answer to any of this. An annual fee and a lowering of the Avios per £1 earn rate would push up the breakeven point substantially though.

      • johns says:

        I really hope BA keeps AMEX. I experienced some dreadful service from VISA/MasterCard CC’s whereas AMEX customer service is above outstanding. With now nearly universal acceptance of AMEX, I really hope BA will stick with them.

      • Thomas Howard says:

        Wouldn’t this mean the best earn rate would be similar to the Tesco Clubcard Premium – which I think is around 600 Avios per £1000? Although you might be able to increase this by another 50% to 900 per £1000 if paying off the credit card with a Tesco current account debit card.

  9. I’m very curious about the new BA visa /mastercard. Any idea what will offer? Companion vouchers? Point rates? Fees? BA Status?

  10. KevMc says:

    O/T I have just had an email from Iberia offering a 20% bonus on MR transfers to them in March. I’m not sure if this is targeted or not, and I have transferred from MR to Iberia once in the past (to activate my Iberia account)

    • Read the small print and then delete it.

      • KevMc says:

        Thanks Rob. It states it’s only valid for transfers from a Spanish issued card only; it is a bit misleading of them to even email me about it imo, as they have my address as being in the UK, and must have seen that my previous transfer was from a UK Amex account.

        I have sent 1000 points over anyway, as a test. It says the bonus points will be added within 14 days of the transfer, so if the bonus posts, I will send some more, as it says it applies to all transfers made in March.

  11. Anthony Burns says:

    Rob do you think the Tesco Credit card with the possibility of converting to Avios will continue or be dumped as part of the shake up.

  12. Given the recent survey from Amex something major is on the way I just hope that what they offer will be worthwhile as I can see Amex being the loser here. Currently I have the platinum charge card and i don’t churn this as I have the BAPP for free. If i have to play for that as a master card then the Amex would be in some trouble as, whilst I am will to pay £450 a year for the two cards I am not paying £650 so something has to give.
    Now, if Amex offered another one world card and it came with status, not as they suggest status without lounge access, then I could be persuaded to stick with amex. This is in art due to the continuing lack of value of Avios and the difficulties of using the 241 vouchers. ( My last was used on a club return to Frankfurt!!!!) As a leisure customer I find the ex EU and many of the sale fares more than a match for Avios even with 241. For example 2 return in cramped world to JFK are over £1000 in fees and over 100,000 avois. There are fares from the EU in business for 1013 euro even today so there is no logic to taking the avois option. The deals are even better going East as you also get better quality airlines.
    That is clear from all of this is that the consumer is getting a bad deal and nothing like the sort of deals the US get. Yes interchange fees are in part to blame but with the level of personal debt in the UK is so enormous that you would think the banks and credit card issuers were making enough.
    The 241 o be fair the 241 is losing its value

    • Young L says:

      With Amex Platinum you get free BAPP? Was not aware of that. Thanks for the info!

      • you dont get it free, its a legacy that some lucky people benefit from.

      • Peter K says:

        You don’t if you take it out now. It’s a grandfathered benefit for those who have had the Amex Platinum for years.

      • Not any more and certainly not for someone just applying now!

      • Mike G says:

        You don’t any more, that was a grandfathered benefit for older Amex platinum accounts

      • Young L says:

        For all above, thanks. No free BAPP then.

    • Lady London says:

      Yes it’s really annoying that US cardholders can earn such huge bonuses still on Amex for just signing up and spending. US lounges are full of people who treat it as a drinking club and hardly fly at all. Yet they have status and huge points balances. So we are at continual risk of our benefits being devalued just because there are so many points in circulation creating a liability that has to be accounted for and can be reduced by devaluation.

      So even though the benefits are pathetic in comparison in the UK, they’re going to keep being devalued or taken away.

      After yesterday’s HBO announcement on Transatlantic for the British Airways cartel BA is just about dead for me. The final cut will probably be the massive removal of benefits I expect from the Avios scheme reorganisation and move to revenue related being pretty much the only game in town that has pretty much been said is to be announced middle of this year.

  13. Not a surprising development. I’ve had the Lloyds card for 18 months now, never received a voucher, even though I spend about 1k per month on it. Took ages to get my avios transferred too. Funnily enough I had a cheque for £100 from them out of the blue yesterday re: the avios issue. Nothing about my vouchers though. I push them for avios compensation I think

    Going forward, I guess I should switch back to using the tesco mastercard as my secondary avios/clubcard earner? I already have the halifax clarity for foreign cash withdrawls spending, is there a better one to go for?

  14. Roger I* says:

    By coincidence (I guess), I’ve just received the Dear John letter from Lloyds about my Avios Duo AmEx/MC combo (originally Air Miles). ‘Is your Lloyds Bank credit card still right for you?’ Basically use it or cut it up.

    It’s one of a number of cards I’ve not used for ages, originally in the hope (with this card) that I would perhaps have been able to trade it in for the other Lloyds card, which has not been possible to date. Nor in the future it seems.

    It will not be a loss. My only choice is between taking the decision myself or letting them close the account. I have no other Lloyds connection, so I guess it doesn’t make much difference,

    • Thomas Howard says:

      You can always hang on until they give notification to transfer you to a standard card. When that happens buy a refundable airline ticket up to your credit limit a week before its withdrawn, then get the ticket refunded when they’ve credited you the Avios.

      • Radiata says:

        That is fraud.

        • Arguably it was also fraud when Barclays closed the IHG credit cards and refused to compensate people for the progress they had made towards spending £10,000 for the free night?

          Be clear about this. Lloyds will leg you over and if you have spent £6999 towards the £7000 upgrade voucher on the day they close the card you will get zero compensation. Banging a £10,000 refundable flight ticket through the card on the last day would simply be a way of getting partial compensation for yourself.

        • No it isn’t, you are not being dishonest.

        • It’s not fraud to change your mind about something. The option is always there to cancel a flexible booking so a travel provider couldn’t say they had been deceived into believing you were definitely going to take that flight. And airline points aren’t regarded as tangible property for criminal purposes. This discussion has been had before on this site!

        • Mr Dee says:

          Don’t see the deception as its a refundable product, I hate scaremongering comments like this….

  15. OT but did anyone manage to pick up some Rolling Stones tickets via the Amex presage link. I’ve been wanting to see them ever since I was a kid but not at the £1k price point being asked. Got 2 for £240 and bought 4 more “just in case”

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