Are the new Virgin credit cards a good reason to start collecting Flying Club miles?

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Following the launch of the new Virgin Atlantic credit cards this week, I thought I would take a broader look at Virgin Flying Club.  Is there an opportunity, even for someone without a Virgin Flying Club account at the moment, to build up a pile of miles from scratch very quickly?  And should you?

(This is the last article on the new Virgin cards for a while, promise!)

It is not up to me to tell you if this is a good idea FOR YOU or not.  However, this article sets out a few reasons why you might want to consider it.

As a reminder:

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

The free Reward 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 Reward+ 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 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 Reward card here and the £160 Reward+ card here.   You can compare the cards side-by-side here.

I need to tell 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%.

Reason 1:  Diversification

British Airways can fly you to pretty much anywhere that Virgin Atlantic can. However, that doesn’t mean they can get you Avios seats when you want them. Having a balance in another programme gives you more chance of getting seats on the dates you want them.

Both BA and Virgin allow one-way redemptions, so with a Virgin balance you could mix and match a trip as availability allows. Virgin also partners with Delta in the US and a number of other airlines.

However, Virgin and BA are both UK-focussed airlines, so you are likely to face an identical squeeze around UK school holidays.  You may want to expand into Star Alliance and redeem on, say, Lufthansa if you want a better chance of seats at – say – UK half-term.  The good news is that Virgin Atlantic will soon be offering redemptions from Air France and KLM after the airlines bought a shareholding.

Reason 2:  Lower taxes in Economy

Virgin Atlantic generally has lower taxes in Economy than British Airways when redeeming.  Whilst most Head for Points readers like to focus on premium redemptions, there are times when Economy may do, or when you are redeeming for teenage kids!  If we’re honest, a day flight to, say, New York is also manageable in Economy if necessary.

The new Virgin Atlantic Mastercard credit cards come with a 2-4-1 voucher for an Economy redemption.   (A Silver member can also redeem in Premium, a Gold member can also redeem in Upper Class.)

Here is a comparison of Economy taxes and charges on a redemption:

New York £264  (British Airways: £371) – you save £107

Barbados £245  (British Airways: £278) – you save £33

Las Vegas £233  (British Airways: £366) – you save £133

Hong Kong £282  (British Airways: £341) – you save £59

Dubai £247  (British Airways: £260) – you save £13

Virgin Atlantic is often noticeably cheaper.  A couple would save £266 if you used a Virgin 2-4-1 voucher to visit Las Vegas compared to using a BA Amex 2-4-1 voucher.  Whilst Economy redemptions are generally poor value with Avios because of the taxes, they are clearly a slightly (just slightly) better deal with Virgin.

Reason 3:  Availability

I rarely redeem on Virgin, so cannot comment on how easy or hard it is to get availability.  In general, though, Upper Class cabins have fewer seats than BA Club World cabins, with subsequent squeezes on availability. Is it easy to get 4 Upper Class seats on Virgin for a family? I don’t know. It isn’t a problem with BA on many routes.

You can check availability on the Virgin website without having enough miles in your account to do the redemption.  You should spend some time researching your favourite routes before deciding whether to commit miles to Flying Club.

Should you collect Virgin Atlantic Flying Club miles?

Reason 4:  The new credit cards also have the option of an upgrade voucher

If you don’t want to take the 2-4-1 voucher, you can get a voucher to upgrade Economy redemptions to Premium for no extra miles.

Extra taxes would be due, unfortunately, as Premium incurs the higher rate of Air Passenger Duty.

The spending criteria for earning the 2-4-1 voucher or the Premium Economy upgrade voucher is:

  • £10,000 in a card year on the £160 Reward+ Mastercard (sign-up bonus 15,000 miles)
  • £20,000 in a card year on the free Reward Mastercard (sign-up bonus 5,000 miles)

Reason 5:  If Virgin doesn’t work out, you can transfer to Hilton Honors or IHG Rewards Club

Rare among airline schemes, Virgin lets you transfer miles out into Hilton Honors (1:1.5) or IHG Rewards Club (the Holiday Inn etc scheme) at 1:1.

If you found yourself struggling to use your Virgin miles, you could also move them across.

As an extra benefit, transfers into IHG Rewards Club count are treated as status points.  I earned Spire Elite this way for 2016 as I wrote here.

Of course, if your main aim is to earn IHG Rewards Club points then you are better off with one of the two IHG Mastercard credit cards.  The Hilton Honors Platinum Visa is no longer available to new applicants so the new Virgin credit cards are an – admittedly poor – way of accumulating Hilton Honors points from a Visa / Mastercard.  For places that take American Express, you would be better off earning Hilton Honors points via the (free in Year 1) Amex Gold which earns 2 Hilton points per £1 spent.

Reason 6:  The Heathrow Clubhouse

The Virgin lounge at Heathrow, for Upper Class passengers, is widely regarded as one of the best airport lounges in the world. Get a haircut, have a massage, eat a proper meal, chill out in the audio or TV rooms or do one of many other (admittedly ‘boys toys’ type) activities.  It is well worth trying once in your life.  Here is a review of my last visit to the Virgin Clubhouse in Heathrow and there will be another review on the site soon.

Note that, whilst full fare cash tickets in Upper Class also get a free chauffeur to and from the airport, reward tickets and cheap revenue tickets do NOT get this.

Reason 7:  It is easy to collect additional miles

It is now almost as as easy to collect Flying Club miles as it is Avios.   The new credit cards offer 5,000 miles for getting the free Reward card and 15,000 miles for getting the £160 Reward+ cardThere is no spending target, you simply need to make one purchase within 90 days.

You can also transfer from:

Tesco Clubcard (with regular 20% transfer bonuses, making it 300 miles per £1 voucher)

Amex Membership Rewards (so the Amex Gold bonus is worth 20,000 miles, the Amex Platinum bonus 30,000 miles and the Starwood Amex bonus 10,000 miles)

Heathrow Rewards (a 3,000 point sign-up bonus is available)

….. as well as all the major hotel schemes.  As I wrote here, some major hotel chains do not give Avios but do offer Flying Club miles.

Other partners include:

Hertz (1,000 miles per rental)

Red Carnation Hotels (2,000 miles per night)

Virgin Money ISA (8,000 miles for opening a stocks and shares ISA)

Virgin Wines (3,000 miles with your first case)

Virgin Trains 

Virgin Money International Money Transfers (3,000 miles with your first transaction)

Texaco Star Rewards 

Conclusion

So, a few things to think about.

One of the emerging features is that Flying Club has a bit more than Avios to offer to the person who redeems in Economy. You pay lower taxes and have the ability to upgrade to Premium Economy for free via the credit card voucher.

You even get the option of selected long haul departures from Manchester and Glasgow, which BA abandoned long ago.

For business class redemptions, it is less clear cut.  Smaller cabins, a smaller route network and fewer daily flights may make it trickier to find seats whilst the taxes and miles required tend to mirror British Airways.

In general, there is never any harm in spreading your bets especially if negative changes are coming to Avios in the next 12 months.

The application pages are here for the free Virgin Atlantic Reward and here for £160 Reward+ credit cards.  My two articles from Wednesday describing the package of benefits are here and here.  The main card website is 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.

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Comments

  1. David says:

    OT.

    I have just been told by Amex that the Gold Rewards welcome bonus is not applicable if you hold a Gold credit card – is that correct? I am certain it is not. Perhaps another change of terms?

    • roberto says:

      If you have the gold credit card and collect MR then then you wont get sign up bonus for a gold charge card. You need to have no MR account at all for a clear six months the benifit from the sign up bonus.

    • mark2 says:

      Agree that is correct. If you have applied for and got Gold you should get 20,000 for upgrading to Platinum with £1,000 spend, then 5,000 for platinum credit with £500 spend before cancelling.
      Plus hotel etc. status.

      • Nigel Williams says:

        “Platinum Credit”? Do you mean another £500 trigger spend for 5K points essentially?

      • David Courtney says:

        Would the upgrade be done online or is a phone call to Amex necessary? Incidentally already spent £1400 before I realised no gold welcome bonus. If I upgrade to platinum will existing spend be credited to platinum?

  2. Derek says:

    Hi Rob,

    Just want to ask about non-Amex cards, which one do you really think is a better choice?
    Tesco mastercard gives 1 point for every 8 pounds for non-Tesco purchases, or
    Virgin free mastercard which gives 0.75 miles per pound..

    Your April update still put down Tesco as the best Mastercard, so I just want to double-check.

    Thanks!

    • mark2 says:

      It depends on whether you wan to collect Virgin Miles. If so the new Virgin card is better, but Tesco more flexible.

    • For Virgin, you can’t beat the new card. For OVERALL value you should compare with the IHG Premium card – day to day spend is lower but if you can’t use the Virgn 241 or upgrade then the IHG free night at £10k may swing it.

      • Catalan says:

        Rob, do you think it’s worth waiting to see if Virgin Money will up the 15000 miles sign up bonus at a later stage or just sign up now?
        I’m currently a Virgin Black MBNA card holder which renewed only in January

        • From what I’ve been told, the economics of the card simply don’t support much in the way of a higher bonus. That’s not to say it will never happen but I would be shocked if it was short term.

        • I’m hoping for a special VS Clubhouse offer, ie you have to be in it to win it…

      • Catalan says:

        Many thanks

      • The FT thread about the IHG Creation card really put me off applying.

        I just can’t face getting sucked into (another) fight with a provider who won’t deliver what it says on the tin. Time spent and personal sanity is worth more than a free hotel night.

        • I have to say that I agree with this.

          The IHG Black product in concept is brilliant but Creation are just a sham. I cancelled mine after the free night trigger and have been to the Financial Ombudsman to claim missing points.

          If the IHG Mastercard was with a decent bank then this would be the one.

          It does make my eye twitch when I see endorsements for the card based on my experience.

        • Andrew-a says:

          So far, after a year with the Creation card, I have had no problems at all. Free night posted without chasing so no complaints from me.

        • My experience with Creation IHG is also entirely positive. The monthly points post far more regularly and accurately than they ever did with Barclaycard. The free night also posted within a few days of year end in my IHG account and I’ve redeemed it already.

          • Must admit, I have never had issues but then I’m not sure I’ve ever charged an IHG stay to it so I’m not running around after bonus points.

        • Not sure it’s about the points calculations, for me it’s:

          * Why make customers wait to get their free night cert? If I’ve spent the money you asked for the sign up bonus, why not pay out the bonus straight away?

          * Why play games having an artificially short cancellation window between actually giving customers the sign-up bonus and charging them the 2nd year’s fee?

          Like it’s kind of bogus finance deal (“0% interest free credit for N years”) that you might be offered when buying a new car or domestic appliance. Profitable for the selling but only because it’s artificially hard for customers to fulfill the criteria for the headline offer.

          I’ve got better things to do with my time and spend.

          • I am relatively casual about this, because I’m happy to keep the card long term. £99 for a free night (the £10k is not an issue, especially as I can still use Curve to do my PAYE etc) is a good deal, and the fact that the points count towards Spire Elite status is even better.

        • Fair enough.

          I’m sitting on a boat-load of IHG points and haven’t managed to make any decent redemptions. Also had two of the Barclaycard IHG free night certs, didn’t find those easy to redeem well either.

          There are schemes where I never have enough points (Hyatt – we’d go to GH Muscat every year if I only had the points!) and schemes where I can never get rid of points (IHG and VS spring to mind).

          If only there were a grey market to swap points 🙂

  3. It’s not just the Heathrow club house that is head and shoulders above BA lounges – the recently refurbed Gatwick clubhouse is also excellent. The table service breakfast there is better than any thing I have had in the CCR and the lounge is never that busy.

    • Never been in – I do have a press pass, however, which lets me visit irrespective of airline flown. When I go to visit the new Aspire lounge in May I may pop in.

  4. Rather significantly for a travel-focused site you missed out Virgin Holidays as a way to earn miles – on the full value of the booking. This applies however you pay and whoever the flight is with.

    If you fly on a Virgin aircraft and pay using a Virgin credit card, then things start to stack up quite rapidly of course…

    I’m likely to book a Virgin holiday at a total value of around 10k in the next few months, so currently weighing the numbers as to whether that makes the paid card worthwhile (it’s against my general principles – the whole idea of the points game for me is to see what I can get ON MONEY I WOULD HAVE SPENT ANYWAY. I hate diluting that in any way by paying charges or fees. Yes I realise that in strict economic terms that is a somewhat irrational approach and does not maximise returns, so nobody needs to point this out :D).

    • mark2 says:

      Good reminder, but perhaps because the omission is because the site is about getting almost free or cheap flights and hotels etc. and organising the holiday oneself.

    • Alex W says:

      If you can afford to spend 10k on a holiday why are you moaning about a £160 fee? First world problems…

      • He didn’t say he couldn’t afford it, just that he doesn’t like the thought of paying for a credit card

      • That is generally how you get into a position where you can drop 10k on a holiday.

      • That’s basically saying if you can afford to spend £50000 a year, why bother getting £800 extra worth of miles by applying for lots of different cards instead of just using one card

    • Note that Virgin Holidays bookings made in shops do not get double miles on the credit card.

    • Ignoring the rewards… if you’re in it just for the transactional mileage earning you’d need to spend £24K in a year on the paid card to get the value of the fee back in the additional miles earned against the free card, assuming that you value the miles at 1p each.

      That threshold potentially rises if achieving it takes spend away from more lucrative Amex options, so I doubt it would be worth it to most people (although for those putting several £10Ks of tax payments through Curve it probably is!).

      I’m assuming that there’s no bonus on miles earned for Virgin spend on the card?

      OTOH for anyone targeting a reward I’d have though the fee is worthwhile, in the same way it doesn’t really make sense to spend £20K on the free BA Amex to get a 2for1.

      • Yes, I’d say the opportunity cost is important – by only having to put £10k on the paid card you then free up another £10k which could go somewhere else (eg put it on an IHG Premium and trigger the £10k free night).

        • Of course what that means for Virgin Money is that they are particularly losing an opportunity to drive applicants towards the paid cards as a result the disappointing value of the awards for non-status holders.

          Most people, unless they are attracted by a economy only 2for1 or a PE upgrade, will use it and it’s worth a substantial proportion of the £160 fee to them, would be better off with the free card.

        • Though that ignores the sign-up bonus… they may find a lot of people taking the paid card for a year and then cancelling. 🙂

  5. Henry Young says:

    The VS sweet spot for me is one way out of Hong Kong off peak premium economy (22,500 miles vs HK$11,625) which bags me 4.6p/point. The HK law that bans carrier imposed surcharges helps. I used Avios on the opposite leg, or cheapo Norwegian to Singapore in the other direction, with an AirAsia hop to tie up loose ends. VS represents fantastic value if you can hit this sweet spot and your points accumulation through various channels (e-rewards included) matches well with your travel frequency. VS prem eco is not ideal for a night flight, but if the value matters enough it can work well.

  6. David says:

    Re Virgin to soon offer KLM and AirFrance redemptions – will these be available/viewable online or will thy only be available if you call Virgin?

    • No idea. As long as they had full access to AF/KLM availability, though, even calling would not be an issue because you could search on the Flying Blue site.

  7. OT I just got declined by virgin money for a 0% interest credit card despite having a very good credit score. Rob – I know you were helping people with their declined virgin card applications…. Is there something similar that can be done for me? I have the black MBNA virgin atlantic card but surely that’s not a reason for rejecting my application??

    • Note, it is only the VA cards unfortunately.

    • Zoheb Akhtar says:

      Give them a call on 0800 876 6656, mine got declined and was told they’d look into it. Today I got my new Plus card, albeit with a very small credit limit of £1000.

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