I would like to claim that this story was the work of our crack team of investigative journalists, but I actually owe it to reader Jack. He posted it in the comments on Saturday night whilst I was on the way to the Hilton Honors Bastille gig with a note saying ‘erm, Rob, you should look at this’!
We have known for some time that the American Express element of the Lloyds Avios Rewards credit card was living on borrowed time. Amex has cancelled all of its licensing deals with other banks. The Lloyds Avios Rewards card was withdrawn from the market for new applicants a couple of months ago.
By mistake, I imagine, the terms and conditions of the new Lloyds Avios-earning credit card have been posted online. (EDIT: link removed as the document has been removed)
We believe that the new card will be called the Lloyds British Airways Mastercard.
This is what is going to happen:
The American Express element is dead. The card will be a pure Mastercard.
The upgrade voucher seems dead. It appears that you will no longer get an upgrade voucher for spending £7,000 per year on the card.
There may be no annual fee – it is not mentioned in the new T&Cs
You may start paying FX fees. There is no mention in the new T&Cs that they are waived.
Here are the earning rates for the new Lloyds British Airways Mastercard:
0.4 Avios per £1 spent in the UK
0.8 Avios per £1 spent outside the UK
0.4 Avios per £1 on balance transfers (but presumably there is a fee attached to these)
One implication of how the rules are written, although it isn’t fully clear, is that Avios will be earned in multiples of £5. Your actual earning will be less than 0.4 Avios per £1. Any purchase under £5 will earn nothing. All other purchases will be rounded down to the nearest £5. (The other implication of the wording is that only your total monthly spending is rounded down to the nearest £5, which clearly makes no real difference to what you earn.)
Here is an interesting quirk:
Holders of a Club Lloyds current account will earn an extra 0.1 Avios per £1 (0.2 Avios per £1 for foreign transactions)
This takes you up to 0.5 Avios per £1 for UK spending and 1 Avios per £1 for foreign spending.
For this to kick in, you must have had a Club Lloyds current account for at least six months.
Going forward, with the closure of the Avios Travel Rewards Programme, you will manage your Lloyds credit card account via www.ba.com/lloyds. This page is not yet live.
When are these changes kicking in?
As the current Lloyds Avios Rewards cards are closed to new applicants, there is no doubt that these changes are for existing cardholders. I assume that you will receive an email shortly from Lloyds announcing the closing date for the existing cards.
What do I think of the changes?
Frankly, compared to the new Virgin Atlantic credit cards (details here) this will be a very poor product.
The free Virgin Mastercard offers 0.75 Virgin Atlantic miles per £1. Lloyds is offering you 0.4 Avios instead.
The paid Virgin Atlantic Mastercard offers a whopping 1.5 miles per £1, almost 4x what Lloyds is offering.
The Virgin cards also have the ‘241’ offer, albeit only in Economy unless you have Virgin status. The new Lloyds Avios Rewards credit cards appear to have nothing. The assumed loss of the upgrade voucher is particularly poor as this was a real boon, especially for solo travellers.
On the upside, assuming there is no annual fee, it will be more generous than the Tesco Clubcard Mastercard (which, note, currently offers 2400 Avios as a sign-up bonus via 1000 free Clubcard points). It was a little embarrassing that you earned more Avios on the FREE Tesco Clubcard Mastercard (0.3 Avios per £1) than on the £24 Lloyds Avios Rewards Mastercard (0.25 Avios per £1) …..!
Of course, if you qualify for it, the HSBC Premier Mastercard (free to Premier current account holders) pays 0.5 Avios per £1. The HSBC Premier World Elite Mastercard offers 1 Avios per £1.
It is roughly equal to the free IHG Rewards Club Mastercard which gets you 1 IHG point per £1 which I value at 0.4p. I also value 0.4 Avios per £1 via Lloyds at 0.4p. The IHG card does give you Gold status in IHG Rewards Club as an extra perk, however.
For clarity ….
I can’t be 100% certain that the terms outlined above are fully correct. It is possible, for example, that the upgrade voucher may be retained but just isn’t mentioned in the terms and conditions …. but that would be odd. Similarly, it is possible that FX transactions will remain free. We need to wait for Lloyds to make the full announcement.
In case you’re wondering, I have no idea if Lloyds intends to open up the card to new applicants or not. Based on my recent conversations with Avios, it isn’t happening in the short term.
Want to earn more points from credit cards? – January 2021 update
If you are looking to apply for a new credit or charge card, here are our January 2021 recommendations based on the current sign-up bonus.
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
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
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
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
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:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
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
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
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.