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What is the best replacement for your UK American Airlines AAdvantage credit card?

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As we wrote yesterday, MBNA has written to holders of the American Airlines UK credit cards this week to tell them that they are closing at the end of July.

Today I thought I would run through the options if you still want to collect American Airlines miles from a credit card, or want an interesting alternative from another airline.

Best replacement for UK American Airlines AAdvantage credit card

Why did this happen?

You should NOT assume that these cards will return under a new issuer.

Two linked events caused this.  The core driver was the European Union cap on interchange fees.  This restricted the fee that payment processors could charge retailers for accepting credit cards to 0.3%.   It is very difficult to run a successful mileage card on this basis.

The second driver was American Express being caught up in the 0.3% cap, even though it was originally expected to be exempt.  American Express decided to pull all of its licensed cards from the market, which means that MBNA, Lloyds, TSB and Barclays had to stop issuing Amex-branded products such as the American Airlines AAdvantage cards.

What is a little odd about MBNA’s decision is that it is also closing the Visa-only AA card pictured above.  With a £70 annual fee I thought this may be sustainable.  With 1.25 miles per £1 spent, it isn’t hugely different to the £160 fee / 1.5 miles per £1 spent deal on the new Virgin Atlantic Reward+ card.

Best American Airlines UK credit card replacement

What is your best alternative to the American Airlines AAdvantage UK credit card?

There are a number of ways of looking at this.  Let’s run through them.

Scenario 1:  You want a card which still lets you earn American Airlines miles

The good news is that there are still ways to earn American Airlines miles from a credit or charge card in the UK.  The earning rate is OK too.

The best option is the Starwood Preferred Guest American Express credit card.   You earn 3 points (in the new combined Marriott / Starwood scheme) per £1 spent, and these convert at 3:1 into American Airlines miles.  If you convert in chunks of 60,000 points you get a 5,000 mile bonus, meaning that you are actually getting 1.25 AA miles per £1 spent.

The annual fee is £75 and you get a sign-up bonus of 30,000 points (10,000 AA miles).  This makes the card well worth getting for the first year at least.

Your other option is one of the two Membership Rewards cards – either American Express Preferred Rewards Gold or American Express Platinum.

The snag here is that you cannot convert directly from American Express Membership Rewards to AA.  You need to route via Starwood Preferred Guest at the poor conversion rate of 2:3.  This means that 1,000 Amex Membership Rewards points gets you 1,500 Starwood / Marriott points which gets you 500 American Airlines miles (or 625 if you convert in chunks of 60,000).

At best, you are getting 0.625 American Airlines miles for every £1 spent on Amex Gold or Amex Platinum.

Best American Airlines UK credit card replacement

Scenario 2:  You specifically want a Visa or Mastercard to collect American Airlines miles

This is trickier and less lucrative.  You can’t get anywhere near the 1.25 miles per £1 that the £70 MBNA AA card offered.

The only half-decent Visa / Mastercard option is via the IHG Rewards Club Mastercard (0.2 miles per £1, assuming you convert 10,000 IHG points into 2,000 airline miles) or, with the £99 IHG Rewards Club Premium Mastercard, 0.4 miles per £1.

There is a sign-up bonus on these cards.  The free IHG Mastercard comes with 10,000 IHG points, worth 2,000 American Airlines miles.  The £99 Premium card comes with 20,000 IHG points, worth 4,000 AA miles.

Best American Airlines UK credit card replacement

Scenario 3:  You want a high-earning Visa or Mastercard and are willing to move away from American Airlines

Without a doubt, the two Virgin Atlantic Mastercards are the most generous Visa or Mastercard products available – either the Virgin Reward Mastercard (free, 5000 miles bonus) or Virgin Reward+ Mastercard (£160, 15000 miles bonus).

You get 0.75 miles per £1 on the free card and 1.5 miles per £1 on the paid card.  This is FAR better than any Avios or hotel card.  You also get a 2-4-1 or upgrade redemption voucher for hitting spending targets.  The only downside is that, with no short haul routes, you are unlikely to earn enough miles purely from the credit card to get a good redemption so the cards are best suited to regular Virgin flyers.

The best long-term card for an Avios / Etihad Guest / Asia Miles / Singapore Krisflyer collector (if you have a high income) is the HSBC Premier Mastercard or HSBC Premier World Elite Mastercard.  

You need to have a (free) HSBC Premier current account to get these cards but these come with high income or savings requirements.  If you’ve got the money behind you to get Premier, the cards are great.  The standard Mastercard is FREE, has no sign-up bonus and earns 0.5 airline miles per £1.    The World Elite card has a £195 annual fee but comes with a sign-up bonus of 40,000 miles for spending £12,000 in your first year, free airport lounge access and pays a generous 1 mile per £1 spent.

If you simply want a free Visa or Mastercard and collect Avios, the best option is the Tesco Clubcard Mastercard.  You get 1 Clubcard point per £8 spent which translates into 0.3 Avios per £1.  However Tesco rounds down each transaction to the nearest £8 which means your actual earning rate is lower.  You get extra value because Clubcard points have many uses – as well as Avios, you could send them to Virgin Flying Club or a totally different Clubcard partner altogether, such as Uber or Hotels.com.


Want to earn more points from credit cards? – June 2021 update

If you are looking to apply for a new credit or charge card, here are our June 2021 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the other top current deals:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 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 the most generous non-Amex for day to day spending 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 American Express Business Gold card

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

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

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

Earn both Avios and BA On Business points with your business spending Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

Comments (41)

  • Leo says:

    @Rob, it seems that your Ctrl+V function stopped working recently – there any quite a few references to “see here . (no link)” or “such as (no link) and (no link)” – FYA

    • Rob says:

      No, it is perfectly fine. A recent Adblock update is messing up the text – you need to whitelist HFP.

  • jim cleaver says:

    This’ll hurt me. My miles game was built around this card and redeeming on Qatar / Cathay to Asia. On average i’d generate 60k miles in spend so will need something good to replace it (visa or mastercard)

    I’m a little confused, you mentioned the £160 fee 1.5 miles per £ card, is that closing too?

    Jim

  • Mikee says:

    Ref the Virgin MBNA Amex which looks like is closing in July, I’ll need to spend approx £3.5k between now and July to hit the £5k trigger for the Economy to Premium Economy upgrade voucher. With no large purchases due, any ideas how to generate the spend in terms of cash? Unfortunately I can’t top up my Revolut or Transferwise accounts as they don’t accept Amex. I’m wondering whether PayPal is an option to pay myself or Family.

    Mikee

    • Genghis says:

      I believe Paypal are very AML blocky happy. For that reason I’ve never tried.

    • Lumma says:

      Gift cards for somewhere you spend money regularly? Pay a large bill with billhop if the fee will be less than the value you’d get from the upgrade voucher

  • AA forever says:

    I have a huge chunk of AA miles that I’ve kept “alive” by using the credit cards. I may have to do the IHG one in a years time when my miles still have 6 months left (18 month life on AA cards). Other than that credit card and crediting miles from eligible flights, are there any other ways to get AA miles in the UK?

    • Rob says:

      Obviously you have the usual hotel and car partners but no other transfer options.

  • Bigglesgirl says:

    The letter I’ve received states that the “relationship between MBNA and American Advantage will come to an end”. This doesn’t seem to indicate that it is necessarily MBNA we are pulling out of the deal, but that it is the natural end of their agreement, especially as it is a Visa card and not the other AMEX cards, which are currently suffering their demise. Maybe another provider might pop up?
    Big shame as it was good to keep my 380k miles ticking over…..oh well, guess I’ll just have to spend them now!

  • Georges says:

    Rob, maybe you can answer this question then for me. If the likes of the SPG Amex was caught up in the interchange fee cap of 0.3%, why is Amex still charging their full commission to retailers who accept this card for payment. I have my own SPG Amex but I’m also a retailer that accepts Amex. So out of curiosity, I put through a charge of £100 last week using that card to see if the charge would be lower. And it’s not, they charged my merchant account my normal 2.85% commission. My business partner has a Miles and More MBNA Amex, I may try out that one and see what happens. So I don’t understand what the fuss is about if Amex can continue to charge their normal commissions on those cards that have been ruled as being subject to the cap. Or did they get a grace period until it takes effect for them? Thanks. (BTW. I called Amex this morning and complained about this extortionate 2.85% commission and they reduced it to 1.9%. So if anyone accepts Amex, it’s worth a quick call to Merchant Services).

    • Rob says:

      There’s your answer. You never asked …

      To be fair, no-one actually knows how Amex is meant to interpret this. Since Amex is still allowed to charge for terminals etc, and as the fee is bundled, it is very hard to prove. If Amex does not reduce their fees to the same ‘bundled’ level as Visa / MC I assume they will face further complaints. Big retailers who effectively pay for their own merchant services equipment presumably now see a processing fee closer to 0.3%.

      • Georges says:

        Thanks Rob, all very strange. But for the terminal, we pay Worldpay (on top) for this, not Amex. So it is difficult to see what else Amex is bundling their fee with. Time will tell I guess. If anyone works for a large retailer, it would be interesting to get their angle on this (without disclosing the retailer of course).

  • Marge says:

    Hi Rob
    I’m leaning towards the SPG American Express as I’m really just interested in the miles. This however still leaves the problem of finding the best Visa card as many merchants don’t take Amex.
    Any suggestions?
    I’d also consider a BA (Avios) Visa card if it offered a more generous rewards program.
    Thanks,
    Marge

  • Caroline says:

    One thing that I don’t think has been taken into consideration is that with AAdvantage you earn miles on award flights (and you need less miles for a BA award flight through AA than you do from BA (for the Club World route I take anyway). I’ve been researching whether to switch to Avios but the max miles per pound seems to be 1 whereas I can get 1.25 with Starwood and still earn miles on my award flights.

    I’m going to hang on to see if AA launches a replacement to my MBNA card and if they don’t I think I’m going to get the Starwood one.

    I’ve considered the HSBC Premier card to switch to Avios as the sign up bonus is very tempting but long term I think I’m better off sticking with AA.

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