What is the best replacement for the UK Etihad Guest credit card?

MBNA has written to holders of the Etihad Guest UK credit cards this week to tell them that they are closing on 27th July.

Quite a few readers may have this card as there were some VERY generous sign-up bonuses over the years.  It reached 25,000 miles at one point which was great for a free credit card, especially as you could pool the miles in a family account.

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

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 Etihad Guest cards.

What is your best alternative to the Etihad Guest 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 Etihad Guest miles at a decent rate

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

The highest miles earning option is the Starwood Preferred Guest American Express credit card.   You earn 3 points per £1 spent, and these convert at 3:1 into Etihad Guest 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 Etihad miles per £1 spent.

It isn’t as generous as the MBNA credit card, which gave 1.5 Etihad miles per £1 on the American Express element and had no fee, but it isn’t bad.

The annual fee on the SPG card is £75 and you get a sign-up bonus of 30,000 points (10,000 Etihad 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.

These cards give you 1 Membership Rewards point per £1 spent, and they convert at 1:1 into Etihad Guest.  This means that you are getting 1 Etihad Guest mile for every £1 spent on Amex Gold or Amex Platinum.

These cards come with excellent sign-up bonuses.  Amex Gold comes with 20,000 points for signing up, whilst Amex Platinum comes with 30,000 points.  Amex Gold is free for the first year.

In the short term, taking out a ‘free for a year’ American Express Preferred Rewards Gold, banking 20,000 Etihad Guest miles from converting the sign-up bonus and earning 1 mile per £1 spent – with no fee for 12 months – is probably your best deal.

Scenario 2:  You specifically want a Visa or Mastercard to collect Etihad Guest miles

If – and it is a big ‘if’ – you qualify for HSBC Premier then you have a very easy solution staring you in the face.

The HSBC Premier Mastercard is free.  You earn 1 point per £1 spent which converts into 0.5 Etihad Guest miles.

The HSBC Premier World Elite Mastercard has a £195 annual fee.  There is a sign-up bonus of 40,000 points (20,000 miles) with a further 40,000 points (20,000 miles) at your card anniversary if you have spent £12,000.  You earn 2 points per £1 spent which converts into 1 Etihad Guest mile.

The snag is the eligibility criteria for HSBC Premier.  You must pay in your salary and have either savings or investments of at least £50,000 with HSBC, or an individual annual income of at least £75,000 and a HSBC mortgage, investment, life insurance or protection product.

For everyone else, earning Etihad Guest miles from a Mastercard or Visa now is trickier and less lucrative.  You can’t get anywhere near the 0.75 miles per £1 that the MBNA card offered.

The only slightly 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 Etihad Guest miles.  The £99 Premium card comes with 20,000 IHG points, worth 4,000 Etihad miles.

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

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.  The free Virgin Atlantic card equals, at 0.75 miles per £1, what you were getting for non-Amex spend from your old Etihad Guest credit 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 cards for an Avios / Asia Miles / Singapore Krisflyer collector (if you have a high income) are the HSBC Premier Mastercard or HSBC Premier World Elite Mastercard.  Whilst Etihad Guest is a partner, as we discussed above, the three other transfer options would also allow you to focus your card spend elsewhere.

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.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit 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 with a bonus of up to 25,000 Avios. You can apply here.

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

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.

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:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

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.