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Part 2: Are the new Virgin Atlantic credit cards right for you?

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This is Part 2 of my focus today on the new Virgin Atlantic Reward and Reward+ credit cards.  Part 1, which is a factual look at the cards, is hereThe main marketing website for the cards is here.

As a reminder:

You CAN apply for the new Virgin Atlantic credit cards – and get a sign-up bonus – if you already have the MBNA Virgin Atlantic credit cards

The free Virgin Atlantic Reward Credit card has a 5000 miles sign-up bonus, earns 0.75 miles per £1 and comes with a 241 or upgrade voucher for spending £20,000 per year

The £160 Virgin Atlantic Reward+ credit card has a 15000 miles sign-up bonus, earns 1.5 miles per £1 and comes with a 241 or upgrade voucher for spending £10,000 per year

The Virgin Atlantic credit cards are issued by Virgin Money so it is very unlikely that you will be conflicted due to having any other cards from the same bank

You can apply for the free Virgin Atlantic Reward card here and the £160 Virgin Atlantic Reward+ card here.

I need to remind you that the free Reward card has a representative APR of 22.9% variable.  The Reward+ card has a representative APR of 63.9% based on a notional £1200 credit limit and the annual fee.  The representative APR on purchases is 22.9%.

Virgin Flying Club Reward free credit card

Which card is best for you?

As usual, there is no easy answer to this question.  Here are my initial thoughts.

I am 99% certain that MBNA will withdraw the existing Virgin Atlantic credit cards in a couple of months.  This is standard practice when issuers switch, as we saw with IHG and Barclaycard.  Do NOT think that you will be able to carry on using the current cards in the medium or long term.  I would be especially wary of spending on these cards if you are targeting an upgrade voucher unless you can hit the target very soon.

If you have the MBNA cards, you should be applying for the new Virgin Money cards.  The earning rate on the new Mastercard is better than the rate on the old Visa.  I am guessing, based on the IHG / Barclaycard scenario, that Virgin will NOT be allowed to contact you about the new cards so don’t wait for a direct email or letter – it won’t be coming.  If you are hoping to trigger a voucher on the old cards before they are closed, keep using the old MBNA American Express (only Amex spend counts towards the voucher) and put your Mastercard / Visa spend onto the new card.

The free Reward credit card is a very easy free 5,000 Virgin Atlantic miles.  Even if you are not a major Virgin Flying Club collector, 5,000 miles for making one purchase is attractive.

Whether you should get the Reward+ credit card depends on your spending.  Purely from a bonus point of view, you are spending £160 to get 15,000 Flying Club miles.  This is an OK deal but not a no-brainer.  To get full benefit you need to know that you will be spending on the cards too.

Virgin Money will allow you to have BOTH cards and to earn a bonus on both.  They told me yesterday that their responsible lending policy would not look kindly on anyone who applied for both at the same time, however.

Virgin Atlantic Flying Club Reward credit card

The on-going earning rate is EXCELLENT – if you can use the miles

Let’s not beat around the bush.  Looking first at the free Virgin Atlantic Reward credit card, 0.75 Virgin Flying Club miles per £1 spent makes this the most generous free Visa or Mastercard currently available.

What are your alternatives, looking only at cards still open to new applicants?

I would value 0.75 Virgin Flying Club miles at 0.75p

The free IHG Rewards Club card gives 1 point per £1, which I value at 0.4p

The £24 Lloyds Avios Rewards card gives 0.25 Avios per £1 on the Mastercard, which I value at 0.25p

The free Tesco Clubcard Mastercard gives 0.125 Clubcard points per £1 (0.3 Avios) which I value at 0.3p

The free Virgin Atlantic Reward credit card is twice as valuable as the next best free travel Mastercard or Visa card.

Similarly, on the fee-based Reward+ credit card:

I would value 1.5 Virgin Flying Club miles per £1 at 1.5p

The £99 IHG Rewards Club Premium card gives 2 IHG points per £1, which I value at 0.8p

The £150 Tesco Premium Mastercard gives 0.25 Clubcard points per £1 (0.6 Avios) which I value at 0.6p

Again, the fee Virgin Atlantic Reward+ credit card is twice as valuable as the next best fee-paying travel Mastercard or Visa card.

Virgin Atlantic Reward+ credit card

But the snag …..

…. is using the miles.  Virgin Atlantic is a long-haul airline and so you don’t have any low value redemptions of note.

Virgin Flying Club will change massively in the next 12 months when Air France and KLM flights become available for redemption.  This will add short haul options in Europe as well as the excellent Air France / KLM long-haul network.

You will need a decent stock of miles to take advantage of this.  The good news is that you can also earn Virgin Flying Club miles from other partners:

American Express Membership Rewards from Amex Gold or Platinum (1:1)

Tesco Clubcard (1 point is 2.5 miles)

Heathrow Rewards (1:1)

Transfers from hotel loyalty schemes

There are also lots of partner promotions which we write about on Head for Points.  You CAN build up a decent stock of miles relatively easily – the free Amex Gold has a 20,000 point sign-up bonus which will convert into 20,000 Virgin miles.

Where does Virgin Atlantic fly these days?

I wrote an article – click here – on that exact topic last year.

Virgin Atlantic Reward Plus credit card

What do I think of the upgrade voucher?

I like it.  If you usually travel on your own, you don’t need a 2-4-1 voucher.

The upgrade voucher offered with the new Virgin credit cards lets you book a return Premium Economy reward flight on Virgin Atlantic for the same miles as an Economy reward flight.

The voucher would also work for couples.  Vouchers are valid for two years.  As you can earn one voucher per year, you would be able to upgrade a flight every two years.  If your card spend is high enough you can also, of course, get a card for yourself and a card for your partner and hit the qualifying spend on each.

What do I think of the 2-4-1 vouchers?

To be honest, I am disappointed and I am 99% sure that Virgin Atlantic has missed a trick.  There is no good reason, in my view, to restrict Upper Class redemptions using the 241 voucher to Virgin Flying Club Gold members.

As we all know, or should know, long-haul redemptions in Economy are usually a waste of miles because of the taxes and charges.  Virgin Atlantic generally has lower taxes and charges in Economy than British Airways but the same policy applies.  For non-status members of Flying Club, this is likely to be a perk with little value outside peak periods and they would be better off taking the upgrade voucher.

If someone has enough miles for Upper Class they are likely to be Gold anyway.  However, if a Head for Points reader was willing to move 100,000 miles over from Amex Membership Rewards or Tesco, that should also be fine.  Amex or Tesco would be paying Virgin Atlantic roughly £1000 and, with 2 x fuel surcharges and the £160 annual fee on the Reward+ card, it should be a decent deal for the airline.

Many people hoard miles for when they retire or are travelling less, but they will lose status at this point and so can’t use the Upper Class 241.  There is also a timing issue – you need to be Gold on the day you book and this brings additional problems for people moving between Red, Silver and Gold.

It isn’t even easy to become Virgin Flying Club Gold.  It is possible to be a heavy flyer but, unless North America is your main destination, still struggle to take Virgin Atlantic flights.  Many people can’t earn Virgin Gold status even if they want to due to the narrow Virgin route network.

It makes the whole benefits package unnecessarily messy and, more importantly, Virgin Atlantic has lost an opportunity for an easy win over British Airways.  If we had a Mastercard with a 241 voucher which would let everyone redeem for Upper Class, it would be an unbeatable product.  I would like to think they will rethink this part of the package over time.

PS.  There is some good news for families where one parent is Gold.  Virgin has confirmed to me that, if both parents have their own credit card and 241 voucher but only one parent is Gold, Virgin Atlantic will allow them to redeem both vouchers together for four seats in Upper Class.  The same applies to Silver members and Premium Economy rewards.

Conclusion

From the perspective of day-to-day earning, the new Virgin Atlantic credit cards are excellent.  They are the most valuable Visa or Mastercard travel cards on the market in terms of return.

If you have a pot of Virgin miles which you can add to via these cards, you should think seriously about applying

If you are Virgin Gold and can access the 2-4-1 voucher in Upper Class, you should think seriously about applying

If you are Virgin Silver and are happy redeeming your 2-4-1 voucher for Premium Economy, you should think seriously about applying

If you are a solo traveller and will benefit from the Premium Economy upgrade voucher when booking an Economy ticket on miles, you should think seriously about applying

If you are a casual Virgin Flying Club collector, 5000 miles for taking out the free card and 0.75 miles per £1 spent will see your balance move along, albeit slowly.  You may or may not get value from paying £160 for one year for the Reward+ card to get the 15,000 mile bonus.

If you have the MBNA Virgin cards, you should switch.  I would be shocked if the current cards survived the summer.

Access to seven Virgin Money lounges around the UK (I reviewed the Piccadilly one here) is a decent extra perk for everyone.  The full list of lounges is here.

You can apply for the FREE Virgin Atlantic Reward credit card (5,000 miles bonus) here and the paid-for Virgin Atlantic Reward+ credit card (15,000 miles bonus) here.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

Comments (296)

  • rtid says:

    i have the current MBNA cards, and the annual fee is not refundable i gather. therefore is it sill worth switching? or would Virgin offer an incentive to move from the MBNA card as opposed to a complete shut down? I have another 6 months on my MBNA, switching cards means i lose out on the £100 or so that i have left

  • Lloyd says:

    Agree with all of the comments thus far.

    What we don’t know is the discussions behind the scenes between the airline and Virgin Money. As far as I’m aware the vast majority of VM is not owned by Virgin Group and are traded on the stock exchange. There will also be no connection internally between the airline and the bank – so one arm can’t really direct the other for the greater good of the overall business.

    My guess is that VM tried (and failed) to get the airline to entertain the idea of a 241 for non status holders. Either commercially it didn’t work for the airline or it was concerned that if opened up it wouldn’t be able to sustain the quantity of 241s generated across what is a tiny fleet compared to BA.

    • Rob says:

      VM does not have anything like such a detailed insight into the sector! Also worth remembering that VA and VM will be launching other (non credit card) products together.

      The 2017 VM accounts talk up the partnership as a driver of new business. They expect this card to do very well.

      • Lloyd says:

        Agree, it’s a partnership in so much that it supports their own business interests. But to offer a 241 for all and sundry is probably not something that VA want to entertain or at least not at the moment.

  • Ed says:

    Well there’s a shock – just been rejected for the free card. I have an excellent credit rating, just under £100k household income, homeowner with no mortgage, no debts, Flying Club member for years, Virgin Money savings account holder, haven’t had a Virgin credit card since May 2017, never been rejected before. ???

    • James says:

      I also got declined for the free card, no idea why.

      • Michael Jennings says:

        Moneysavingexpert’s credit card pre-eligibility checker is showing me as “not eligible” for existing Virgin Money credit cards, so I won’t bother applying for this one. I’ve no idea why, but they no doubt have a reason.

    • Lumma says:

      I’ve never been able to pass the eligibility checker for virgin money credit cards, despite getting a high chance of success when checking on comparison sites. I’ve never been that bothered before as they were just balance transfer cards and the like and they were available elsewhere.

      I’ve actually wondered if it was more of a computer can’t find me kind of thing as the checker used to then see if I would be accepted for a capital one card (had a card with them for 14 years with a 7,000 limit) and it would also say no. Actually searching directly with capital one would say they can’t find my details rather than rejecting me so maybe it might be worth calling up and explaining your situation

  • Thomas says:

    Hmm, seems like this is a good way “out” of Avios – with BA’s product declining so much, and Virgin Atlantic remaining solid, and now adding short haul European flights via the KLM/Air France partnership, the main issues with earning Virgin Atlantic miles are somewhat mitigated.

    And now with even higher earning rates on this new card, it might tempt people away from Avios earning (or at least, considering diversifying their travel earnings).

    Would still have a lot of Avios to spend first though!

  • Toby Walsh says:

    I have been declined!

    Have not been declined for credit before – how odd!

    • Clive says:

      Do cc companies have internal limits to how much they approve in a day (which would make sense re internal controls)? I wondered if an influx on a first day could lead to people being declined who might not be later?

    • Michael Jennings says:

      >Have not been declined for credit before – how odd!

      It can happen to anyone – sometimes for reasons that appear to make little or no sense.

      • Toby Walsh says:

        Just very peculiar indeed. Never missed a payment, I always pay in full and never carry a balance over. Have a high income/available credit ratio and settled finance on a 30k car a few months ago.

        I do wonder if they’re looking for people who are likely to carry over a balance each month? Otherwise I do wonder if the cards would be profitable at all!

        • Rob says:

          I am able to handle ‘appeals’ for very solvent people who are refused. Details in an article tomorrow!

  • Darren says:

    I saw the 241 headline, interest peaked. Saw the Gold status in UC only line, very disappointing.

    Oh well, BA First redemptions are back on.

  • Richard says:

    Confusing to me, the white seems too good to turn down for non Amex spend whilst the Black isn’t generous enough. Perhaps some marginal business driven but not much.

    Will they have to redesign redemption rates once linked into all Flying blue customers as well though? A risk really

  • GB74 says:

    Initial thoughts on this are that the free card is great – I like Flying Club as PE rewards are well priced and there are decent opportunities currently with SQ. 5,000 miles for nothing is good, and 0.75 miles on a non-Amex free card is market leading.

    However, my current non-Amex spend goes currently on mine and my wife’s Lloyds Avios cards – £14k spend in return for 2 WTP-CW upgrade vouchers which if used wisely (say HKG-LHR Off Peak CW) can be worth 144k Avios. So my first £14k a year of non-Amex spend is going to go this way until something changes. There’s nothing I can see in the Virgin premium card that gets anywhere near this.

    For now I’m happy to have 5000 miles for nothing, then something to use when I’ve done my £14k on Lloyds per year. Will be holding on for either the Lloyds benefits to be pulled, or a better sign up offer before looking at the premium card.

    • DavidK says:

      My non amex goes there too although I fear it will be withdrawn in the not too distant.

    • Alan says:

      How do you get to use Virgin miles with SQ?

      • Rob says:

        Singapore Airlines is a Virgin redemption partner. However, the restrictions are so tight that it is impossible to use from Europe to Asia. You can get seats on regional flights from Singapore though.

        • Tariq says:

          Indeed managed two seats with stopover PVG to SIN to BKK to link between BA F to PVG and J back from BKK around this years Singapore GP. Cash fares were unpalatable 🙂

        • Alan says:

          Ah, thanks Rob. Shame, I was looking at maybe a holiday starting in Singapore next year. If I do, I guess it will be getting there for cash.

          • Rob says:

            You want the 63,000 miles Air China business class redemption (via VS) – London to Beijing. Buy a connecting flight from Beijing – you might even be able to get Beijing to Singapore on Virgin miles as it is a regional service.

        • Alan says:

          Thanks for the tip Rob but, given our only experience of travelling to China, I don’t think there is a cat in hell’s chance of getting my wife to Beijing!

          Out of interest (in case I can change her mind) what are the fees like with Air China?

        • Alan says:

          Damn! Forgot to ask, would I need to check availability and book over the phone to Virgin Flying Club?

          • Rob says:

            No, you need to phone (after first studying the long list of exclusions on the SQ partner page on the VA website). Just because SQ may have reward seats for its own members on that flight doesn’t mean much – although is SQ is NOT showing reward seats for its own members on its own website you can be pretty sure Virgin won’t have any either.