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Why the free BA Amex credit card is a bad deal for low spenders

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Last Monday I ran this article on why I don’t believe that anyone should be spending £20,000 on the free British Airways American Express card in order to trigger the 2-4-1 voucher.

For a high spender, the free British Airways American Express card makes no sense.  If you could spend £20,000 on the free BA Amex card to trigger the 2-4-1, I think you are better off spending £195 to get the Premium Plus card instead. 

This is because:

The 241 voucher is only valid for one year on the free BA Amex, instead of two years for the BA Premium Plus voucher, which is a major issue if you want to book seats 355 days in advance

The £10,000 of ‘extra’ spending required to trigger the voucher on the free card (£20,000 compared to £10,000 on the Premium Plus card) could be directed elsewhere, triggering sign-up bonuses on other cards

You earn an extra 0.5 Avios per £1 spent, which offsets much of the £195 annual fee on the Premium Plus card

The bottom line is that the only people who I think should have the free British Airways American Express card are those who spend under £10,000 per year.

But even that is a bad idea, if we’re honest

I know that a lot of people don’t spend large amounts on their free BA Amex card.  They don’t trigger the 2-4-1 companion voucher BUT they like earning 1 Avios for every £1 they spend.

If this is you, you are now better off with the new and little-known American Express Rewards Credit Card.

Amex Rewards Credit Card

What is the American Express Rewards Credit Card?

ARCC is a standard Amex-branded credit card.  It has no annual fee and no substantial benefits, except for the ability to collect Membership Rewards points at 1 point per £1 spent.

There are three versions of the card available:

LOW RATE – 5,000 Membership Rewards points bonus and a representative APR of 9.9% variable (click here)

or

BASIC – 10,000 Membership Rewards points bonus and a representative APR of 22.9% variable (click here)

or

PURCHASES – NO sign-up bonus but 0% APR on purchases for 18 months and a representative APR of 22.9% variable beyond that (click here)

The first two cards require a £500 (5,000 points version) or £1,000 (10,000 points version) spend within three months to trigger the bonus.

You will not get the sign-up bonus if you have had a Gold or Platinum American Express card – or any other Amex card which gives Membership Rewards points – in the last six months.  You can still apply for the card, however.

Why is the Amex Rewards Credit Card better than the free BA Amex card for low spenders?

Here’s the interesting bit:

The free British Airways American Express card earns 1 Avios per £1 spent

The free Amex Rewards Credit Card earns 1 Membership Rewards point per £1 spent.  These transfer 1:1 into Avios points if that is what you choose to do.

What you get with the ARCC card is flexibility.

Yes, you can use your points for Avios.  You can send them over to BA via the Amex website and they will arrive within 48 hours.

However, you have other options.  Membership Rewards points can also be sent to Virgin Atlantic, Flying Blue, Emirates, Etihad and Delta among other airline partners.  You can also send them to Hilton Honors (1:2), Starwood Preferred Guest (2:1) and Radisson Rewards (1:3).  You can convert them to Club Eurostar (15:1).  You can even use them for shopping vouchers.  You can see the airline partners here.

The new ARCC card gives you more choice.  You can still take Avios if you want, and at the same 1 Avios per £1 earning rate.  If you suddenly decide that you want hotel points, or that Virgin Atlantic miles make more sense, or even that you want to abandon Avios altogether, you can.  Simply move your Amex points somewhere else instead.

With the free BA Amex card, your points are sitting in Avios from Day 1 and you can’t do anything else with them.  If Avios devalues its rewards, if BA stops flying your preferred route, if reward availability suddenly gets a lot harder to find, if Reward Flight Saver fees jump up, if new surcharges get added ….. you’re stuck.

Swapping to the Amex Rewards Credit Card gives you more control over your points.

The only good reason NOT to drop your free BA Amex is that having the ARCC card means that you cannot get a sign-up bonus on an Amex Gold or Amex Platinum card at the same time.  On the other hand, once you have gone six months without the free BA Amex, you would be able to apply for either of the two BA cards again, purely to earn a sign-up bonus.

Conclusion

There are good reasons for EVERY holder of the free British Airways American Express card to reconsider.

If you spend over £20,000 on the free BA Amex card to trigger the 241 voucher, I think you’re making a mistake as my article last Monday explained 

For lower spenders, who aren’t bothered about the 241 voucher, I believe that the Amex Rewards Credit Card offers a compelling alternative to the free BA Amex

Even better, two versions of the FREE ARCC card – Low Rate and Basic – offer an attractive sign-up bonus if you haven’t had a Gold or Platinum American Express card in the last six months.

If you go for the ‘Purchases’ versionyou will also get 18 months interest free credit on everything you buy.

If you go for the ‘Low Rate’ version, you will be paying a representative APR of 9.9% variable.  This is far cheaper than the free British Airways Amex card which charges a whopping representative APR of 22.9% variable.

Something to think about …..


Want to earn more points from credit cards? – June 2022 update

If you are looking to apply for a new credit or charge 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.

Until 18th July 2022 there is an astonishing special offer on these cards. You get 50,000 Avios on the Avios Plus Mastercard and 10,000 Avios on the free Avios Mastercard. You can apply here. We strongly recommend getting the Avios Plus card whilst this offer is running.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

50,000 Avios for signing up (A CRAZY SPECIAL OFFER!) and an upgrade voucher for spending ….. Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

10,000 Avios for signing up (SPECIAL OFFER) and an upgrade voucher for spending £20,000 Read our full review

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.

SPECIAL OFFER: The sign-up bonus on Amex Gold is increased from 20,000 Membership Rewards points to 30,000 Membership Rewards points until 19th July 2022. This card is free for the first year.

British Airways BA Premium Plus American Express Amex credit card

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 Amex Gold

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

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:

Amex Platinum Business American Express

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 card

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.

Barclaycard Select Cashback credit card

1% cashback (3% on business travel for four months) and no annual fee Read our full review

Comments (78)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Jack says:

    OT, is there any way to see exactly which vessel class we’d be booking on the BA site? Can’t seem to find a way to see if my ticket would fall under Economy lowest, low or flexible. I’m talking before actually purchasing a ticket. Thanks!

  • Faithy says:

    OT. I have been transferring my mastercard spend through lloyds to Avios. What will happen when Avios closes? Suggestions?

  • Nigel Williams says:

    One downside of the ARCC is that it stops the churning ability since you Amex rewards account is still open, surely?
    If you are spending so little on the card, then the advantage of so few points being Amex rather than Avios is minimal.

    • Rob says:

      It does – but you can churn BA Amex cards of course.

      • Phil says:

        When I got the BA AMEX it had a welcome bonus of 9,000 but I haven’t seen that high a bonus since!

        • Peter K says:

          That’s because they lose money on it so would rather you didn’t use it. At least with the premium one they get £195…

  • The Paw says:

    I got the ARCC low-rate card recently. It turns out that the card has travel insurance (or at least I was given travel insurance) which is not as good as that given with the platinum charge.

    I know that a similar question has been asked and answered for the BA cards before, but I’m asking this question now regarding the low-rate ARCC: if I pay for travel with the ARCC, can I get the platinum insurance if required for a claim? (I don’t know if the ARCC insurance will “override” the platinum insurance even though the platinum insurance is supposed to apply for trips paid with a non-third-party UK-ISSUED Amex – the ARCC seems to be a case in point)

    I’ve contacted Amex but received conflicting info….

    • S says:

      Platinum insurance applies. For the core medical benefit you don’t even have to pay for your trip with Amex, but travel inconvenience etc is claimable under platinum terms if it’s been put on any UK consumer amex

      • The Paw says:

        Thanks.

        That’s what I would assume given the definition of “card” in the T&C. However, when on online chat with Amex, two different reps gave conflicting info….

  • Peter K says:

    No. They are completely different products with different rewards (one is cash, the other membership rewards points) so you will need to make a whole new application. You can keep both cards or cancel one and keep the other but you cannot convert one into the other.

  • Mark says:

    I tend to downgrade to the BA blue card once I’ve earned a 2for1. The primary reason being that I understood getting a voucher successfully reinstated in the event that you cancel the redemption can be problematic if you no longer have the card.

    Has anyone had any problems with that, having cancelled the card completely?

    • Rob says:

      The last person I spoke to about this had cancelled his BA Amex completely and then booked and cancelled a 241 – he got the voucher back. No guarantees etc etc.

    • Louise says:

      I recently cancelled a 2 for 1 and it went back to my BA account fine. I no longer hold the BA Amex.

      • Mark says:

        Hmm in that case I’m probably being over-cautious and would probably be better off cancelling it for churning purposes.

  • Mark says:

    One reason you might go for the BA Blue card over ARCC is that you can upgrade it to the BAPP later if it turns out you will (or have?) hit the £10K threshold. Some have obviously planned to do that from the outset to avoid the fee in the interim….

    • Jack says:

      yep good point

    • Mark says:

      This is what I do. Depending on the point in the churn cycle with other cards I ‘dip into’ the BA Amex throughout the year and if I get close to the 10k spend target I upgrade the card, hit the target and downgrade/cancel.

    • Paul says:

      Can you get the points from a referral for a ba premium card to someone who already has the basic ba card

  • Charlie says:

    O/T – The IHG points break is live – there is no published list yet but I have made bookings at those that were released on the preview list.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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