My review of MBNA’s Horizon Visa credit card – the UK’s best credit card for travelling
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This is my review of MBNA’s new Horizon Visa credit card.
Yesterday I wrote about how MBNA has pulled the plug on the UK Etihad Guest credit card from 27th July. This is also now confirmed as the final date for the MBNA American Airlines credit card.
I also expect that the Lufthansa, United and Emirates cards will also be closed on 27th July. MBNA may be staggering the letters or it may be staggering the closing dates, it isn’t clear. The Virgin Atlantic MBNA credit card is closing earlier, in the first week of July.
If you are looking for:
alternatives to the American Airlines credit card, read this article
alternatives to the Etihad Guest credit card, read this article
alternatives to the Miles & More credit card, read this article
alternatives to the Emirates Skywards credit card, read this article
alternatives to the United MileagePlus credit card, read this article
Obviously holders of the MBNA Virgin Atlantic cards can simply switch to one of these two new Virgin Money-issued Virgin Atlantic cards.
However, MBNA is desperate for you to stay
All holders of the Etihad, American, Lufthansa, United and Emirates airline cards are being offered a new MBNA Visa product called Horizon.
This card is not available to the general public. You will only get it if you are a holder of a co-brand card which is being closed.
Horizon is, frankly, great. My best guess is that it will be the least profitable credit card in the country!
Just look at this for the list of benefits:
No annual fee
0.5% cashback on all your spending
No foreign exchange fees
Free cash withdrawals, both in the UK and overseas (although you pay interest from the date of the withdrawal)
Some people are being offered a cash incentive to retain this card until October!
I mean …. where is MBNA going to make any money here?! They give you 0.5% cashback on the back of receiving a 0.3% interchange fee. They won’t make any money when you use the card abroad. They won’t make any money – apart from a tiny interest charge – when you withdraw cash on the card. They won’t make any money on annual fees. And, hopefully, they won’t make any money off you in interest charges because you’re not that stupid.
The only tiny catch is that the 0.5% cashback is paid on transaction multiples of £2. This means that a £1.99 purchase earns nothing and a £7.99 purchase only earns 3p (0.5% of £6).
The APR is 22.9%, with a higher 27.9% rate applying to cash withdrawals.
Should you keep this card?
I currently have the MBNA Lufthansa credit card which I am expecting to see closed very shortly. My gut feeling was that I would be cancelling the replacement MBNA card before it even arrived.
(When my MBNA BMI Diamond Club credit card was closed, MBNA chose to give unprofitable customers like me a replacement card with zero benefits to encourage us to leave, which I did. Profitable customers got a better deal. This time everyone seems to be getting the same good deal.)
If I am offered the Horizon Visa card when / if my Lufthansa credit card is closed, I will be keeping it.
I won’t use it much in the UK. 0.5% cashback is fine but I can get a far better return from the IHG Rewards Club Premium Mastercard. As I calculated in this article, you should expect to get an overall return of 2.3% on your first £10,000 of spending on that card. Even when you have triggered the free night, the two IHG points per £1 are worth 0.8% back.
You can also get between 2.4% and a whopping 12.3% back on the new Virgin Atlantic credit cards (my maths is here) although you need to be a regular Virgin Atlantic flyer to maximise that value.
However, as a card to use when I am travelling, this will do the trick. 0.5% cashback on my holiday spending and no FX fees is a great deal. Tandem has the same benefits including free cash withdrawals but Tandem is unlikely to offer the same chunky credit limits that MBNA usually gives. Tandem also does not offer free UK cash withdrawals. That said, one upside with Tandem is that cashback is paid monthly whilst MBNA is only paying out annually.
I have no idea what MBNA’s strategy is with Horizon. Stopping your existing customer base from defecting by paying them to stay – which is effectively what MBNA is doing here – doesn’t make a huge amount of sense in the long run.
Whilst I admit that MBNA runs a very impressive operation, almost up to Amex standards, holders of the co-brand cards were primarily loyal to the airline and not to MBNA. Perhaps they are hoping that most of their customers won’t be aware that they can continue to earn American, Lufthansa, Etihad etc miles via the Starwood Amex, Amex Gold, HSBC Premier etc and will stick around.
If you are being transferred to a Horizon Visa, I would think twice before cancelling it unless you already have another option for foreign spending with a good credit limit. You can feel happy tucking it into your passport and focusing your UK card spend elsewhere.
Want to earn more points from credit cards? – March 2023 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.
SPECIAL OFFER: Successfully apply for either of the Barclaycard Avios credit cards by 2nd April 2023 and you will be entered into a free draw to win ONE MILLION AVIOS! Full details are on the application forms here (free) and here (paid). This competition is exclusive to Head for Points readers. T&C apply.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
Barclaycard Avios Plus Mastercard
25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review
Barclaycard Avios Mastercard
5,000 Avios for signing up 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.
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and unbeatable travel benefits – for a fee Read our full review
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:
Until 30th March 2023, the sign up bonus on American Express Business Platinum is increased to 120,000 Membership Rewards points – click here. The bonus on American Express Business Gold is increased to 60,000 Membership Rewards points – click here. T&C apply, see the application forms for details.
American Express Business Platinum
Crazy 120,000 points bonus (to 30th March) and a £200 Amex Travel credit every year Read our full review
American Express Business Gold
60,000 points sign-up bonus (to 30th March) and free for a year Read our full review
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
Get a 10,000 points bonus plus an extra 500 points for our readers 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% for 3 months if you apply by 31st March) and no annual fee Read our full review