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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.

MBNA Horizon credit card review

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.

MBNA Horizon credit card review

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 MastercardAs 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.

Conclusion

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? – May 2022 update

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In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards. You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

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25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review

Barclaycard Avios card

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.

The Platinum Card has doubled its sign-up bonus to 60,000 Membership Rewards points, which convert to 60,000 Avios or other airline miles, if you apply by 1st June 2022.

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

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American Express Platinum card Amex

The Platinum Card from American Express

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Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

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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

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30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital on Tap Visa card

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 (161)

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

  • Heran says:

    Can you only use it for business spending or can use it for personal spending?

    • Rob says:

      You might get closed down for personal spending because this card has a 1.5% interchange fee (give or take) which the retailer who takes your card needs to pay.

  • Heran says:

    Not just foreign spending. Also once you have achieved the target threshold or no miles to spend (say you make a big redeem every few years and you just made one with few miles left so voucher you will earn will be of no value in the immediate future), the benefit of other cards are very marginal compared to the Horizon card. Yes the free Virgin card gets you 0.75 mile per £ which is slightly better than Horizon, but cash is always more liquid and convertible than anything else, as we learned from the recent lesson (https://headforpoints.com/2018/05/28/qatar-privilege-clubs-shock-devaluation/).

  • guesswho2000 says:

    As some of us (me included) have multiple MBNA airline cards, I assume we’ll end up with multiples of the same card? I’ve been given the Horizon to replace my AA, no word on Etihad yet.

  • Roger1* says:

    MBNA have generally been flexible with limits, increasing one by decreasing others for example.

    If my M&M card goes the same way, I’ll potentially have 3 Horizon cards. I don’t need 3 and would probably ask MBNA to combine them as a single limit on one card.

  • Willa says:

    Do we know if Horizon offers the same exchange rates as Tandem – i.e. no markup?

    • Rob says:

      Anyone advertising 0% works off the published Visa / MC rates, so they are the same.

      • Willa says:

        Are they advertising that though? I’ve only seen them say no fees, but it didn’t mention the rates.

    • Bob says:

      Seems Horizon uses Visa rate and Tandem uses MasterCard. MasterCard always has better rate but we are talking about ~0.1% difference here

  • Stephen says:

    If anyone else was thinking like me: I asked MBNA if I could transfer an old non airline card I still had with them to the Horizon package and they very politely but firmly said no. Oh well!

  • Sean Bhalach says:

    The “No foreign exchange fee” sounds good, but what you actually end up paying is the [Foreign exchange fee (in this case 0)] + [the percentage on the exchange rate]. Could they adjust this percentage so that the zero fee really doesen’t gain you anything?

    • Genghis says:

      Evidence?

    • Bob says:

      Visa has a conversion calculator. If you put in the currencies and transaction date, you should see the charge on your statement matching what’s showing on Visa website.
      If it’s not the case, then they are not charging free FX.
      Note that MasterCard typically have very slightly better rate so Starling bank card is still arguably the best for traveling (with £200 ATM per day not per month as for Revolut)

  • TripleB says:

    The visa exchange rate + 0.5% cutback puts the effective exchange rate (GBP against major trading currencies USD, EUR, CAD, AUD, JPY) very, very close to that of transferwise. For anyone with expenses in one of those currencies which can be paid on a card this is starting to look like a very interesting proposition.

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

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