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The Lloyds Avios Rewards credit cards were withdrawn to new online applicants on Wednesday.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 all withdrawn.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 website.  As far as I understand it, you will NOT use for any Avios-related tasks.

As part of this, will cease to exist in its current form.  There will not be two standalone UK Avios schemes, ie and British Airways Executive Club.   BAEC will effectively take over the platform.

(This is also leading to a shake out amongst other 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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  1. eggsalid says:

    Slightly OT – not sure if people have spotted this already but just applied and the Amex Gold Companion CC is currently a 5k bonus on £500 in first three months (as opposed to the old 3k bonus)

    • JamesB says:

      It has been discussed a few times in comments.

    • Craig Strickland says:

      Same deal for Platinum.

    • Jonnyenglish says:

      I hit the £500 target spend pretty swiftly but I have now been told by their customer service dept that I have to wait until the three month anniversary of successfully applying for the Gold CCC before the points will be awarded. Normally all other Amex target spend bonuses are awarded as soon as the target is hit so I’m not sure if that was correct advice or not.

      • mark2 says:

        For the Platinum equivalent my wife received the MR points on reaching the target, but making us wait for the 90 days would not be too much of a surprise to reduce churning.

    • Is this targeted? No banner when I log onto my account, and live chat just told me there is no active offer…

  2. JamesB says:

    OT: New Virgin ISA launched yesterday through 31 May. 8000 FC miles for 6 consecutive monthly minimum payments of £150 or £5000 lump sum. They reserve right to withdraw miles if cancelled within 12 months.

  3. Steve Smith says:

    I went for the choice cards rather than Avios 18 months ago as I don’t stay away or fly enough to make the most of Avios. I am expecting trend shortly and my interest free period ends in July. Time for a proper Amex then!!!

  4. Nicholas says:

    I had hoped this card would continue as just a MasterCard only offer! Albeit much lower earning but better than nothing. That will be a real shame if this will just become a standard Lloyds MasterCard.

  5. Albert says:

    Applied on the telephone, was easy enough – the dude said they hadn’t received any information that it would be discontinued (this obviously contradicts the statement in the article) and furthermore that if it is discontinued the product wouldn’t be withdrawn from existing customers, just closed to new applicants…

  6. Eric Brierley says:

    So what other way will I have for collecting Avios points, I use the lloyds AE card solely for points

  7. NicEvans says:

    As you say the great thing about these cards is the 0% foreign exchange fee. Why have cards that appeal to travellers which then cost you a fortune in hidden FX charges? I use it whenever I travel, only limited by the rather miserable default credit limit.
    Sure you can cynically add the FX charges on reclaimable business expenses but this still leaves all of the out of pocket expenses and holiday spending.

    • There is no other way now – at all – of making money on a credit card from people who never pay interest.

  8. jjh4yb says:

    I too wanted the Lloyds Avios Amex as a single traveller the upgrade voucher and lower subscription has more appeal. I’d previously been turned down online, like so many the rejection was a surprise. So I thought I’d pop into branch and expected just to get a form to fill out. I was told I needed an interview.

    The interview lasted well over an hour, was with two bank employees and did include two videos. The personnel were very pleasant, but it did seem well over the top and the huge volume of paper I came away with, was just ridiculous!

    I did get my card, I’m now wondering how long it will last. If I’d known th einterview would take over an hour, I’m not sure I would have bothered.

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