MBNA has written to holders of the United Airlines MileagePlus UK credit cards this week to tell them that they are closing on 21st July.
This was always an odd card which – most of the time – had no sign-up bonus attached to it. The earning rate was also lower than some of the other MBNA airline cards. However, because United has no American Express relationship and an odd deal with Starwood Preferred Guest, its own card was still the easiest option.
Today I thought I would run through the options if you still want to collect United Airlines MileagePlus miles from a credit card, or want an interesting alternative from another airline. As it happens, things have perked up substantially since Marriott (which has a generous United transfer rate) acquired Starwood (which has a UK credit card and is also an Amex partner).
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 United Airlines cards.
What is your best alternative to the United Airlines 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 United Airlines miles at a decent rate
The good news is that there are still ways to earn United Airlines miles from a credit or charge card in the UK.
The highest miles earning option is the Starwood Preferred Guest American Express credit card. You can get up to 1.35 miles per £1 spent which is better than the old MBNA cards!
This page shows the rates to United from the merged Starwood / Marriott programme:
3 Marriott or Starwood points gets you 1.1 United Airlines miles
You get a 5,000 mile bonus if you convert 60,000 Marriott or Starwood points in one transaction
The annual fee on the SPG card is £75 and you get a sign-up bonus of 30,000 points. This makes the card well worth getting for the first year at least.
The only thing you can do is transfer your Amex points into Starwood / Marriott Rewards and on to United via the route above. The rate would be:
2 Amex Membership Rewards points = 3 Marriott / Starwood points = 1.1 United miles
This means you’re getting 0.55 United miles per £1 spent on an Amex Gold or Platinum. These cards DO come with excellent sign-up bonuses though. 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.
Even if it isn’t the best deal for day to day spending, you should consider taking out a ‘free for a year’ American Express Preferred Rewards Gold and banking over 10,000 United Airlines miles from converting the sign-up bonus to Starwood points, then to Marriott Rewards points and then to United!
Scenario 2: You specifically want a Visa or Mastercard to collect United Airlines miles
Earning MileagePlus miles from a Mastercard or Visa now is now tricky. You can’t get near the 0.625 miles per £1 that the free 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 United Airlines miles. The £99 Premium card comes with 20,000 IHG points, worth 4,000 United Airlines miles.
Scenario 3: You want a credit card which allows you to collect a different sort of Star Alliance miles
Not easy. Since the Lufthansa and United Airlines cards were closed to new applicants in November 2017, there have been no dedicated Star Alliance UK credit cards.
Via American Express Membership Rewards:
You can collect with the following Star members via an American Express Platinum or American Express Preferred Rewards Gold or Amex Rewards card and then converting your Membership Rewards points to airline miles:
- SAS – 1 mile per £1
- Singapore Airlines – 1 mile per £1
Via Starwood Preferred Guest American Express partners:
The SPG American Express card has a sign-up bonus of 30,000 points in the combined Starwood / Marriott scheme. This means that you would receive 10,000 miles in most of the schemes listed below which is a decent start if you are opening a fresh account. These are the Star Alliance members which are SPG airline partners:
- Aegean – 1 mile per £1
- Air Canada – 1 mile per £1
- Air China – 1 mile per £1
- Air New Zealand – 1 point per £65
- ANA – 1 mile per £1
- Asiana Airlines – 1 mile per £1
- Miles & More – 1 mile per £1
- Singapore Airlines – 1 mile per £1
- Thai Airways – 1 mile per £1
Via the IHG credit cards:
The IHG Rewards Club credit card earns a poor 0.2 miles per £1 of credit card spend, although if you have the IHG Rewards Club Premium credit card, this is doubled to a more reasonable 0.4 miles per £1. Star Alliance partners apart from United are: Air China, Air New Zealand (£400 spend = 1 point), ANA, Asiana Airlines, Copa (via Globalpass), Miles & More, Singapore Airlines, South African Airways, TAP Air Portugal and Thai Airways.
HSBC Premier is also an option if you want Singapore Airlines miles. It has an excellent Visa / Mastercard rate (0.5 miles per £1 on the free card, 1 mile per £1 on the paid card). You need a HSBC Premier current account, however, which has tough income and savings criteria.
As far as I can see, the only Star Alliance members with no UK credit card earning ability are Egyptair, Ethiopian and EVA Air. Shenzhen Airlines uses Air China’s PheonixMiles programme, which can be accessed via Starwood, IHG, Marriott and Hilton.
Scenario 4: You want a high-earning Visa or Mastercard and are willing to move away from United Airlines and Star Alliance
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, is more than you were getting for non-Amex spend from your old United Airlines 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 / Etihad Guest / Singapore Airlines Krisflyer collector (if you have a high income) are the HSBC Premier Mastercard or HSBC Premier World Elite Mastercard.
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.
Reviews and to apply
Here are my reviews of the cards mentioned above, which also explain the sign-up bonuses available:
Please read this important interest rate information:
Starwood Preferred Guest American Express – representative APR 39.7% variable including fee based on a notional £1200 credit limit
American Express Preferred Rewards Gold – representative APR 57.6% variable including the annual fee (free in year 1) based on a notional £1,200 credit limit, interest rate on purchases 22.9% APR variable.
HSBC Premier Mastercard – representative APR 18.9% variable
HSBC Premier World Elite Mastercard – representative APR 59.3% variable including fee based on a notional £1200 credit limit
IHG Rewards Club Mastercard – representative APR 18.9% variable
IHG Rewards Club Premium Mastercard – representative APR 41.5% variable including fee based on a notional £1200 credit limit
Virgin Atlantic Reward Mastercard – representative APR 22.9% on purchases
Virgin Atlantic Reward+ Mastercard – representative APR of 63.9% including the fee, assuming a £1200 credit limit
Tesco Clubcard Mastercard – representative APR 18.9% variable
(Want to earn more miles and points from credit cards? Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)
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.