Lufthansa launches a new UK charge card – partly as a Diners Club! Should you apply? (Part 2)

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This is part 2 of my review of the new Lufthansa Miles & More charge card in the UK.

Part 1 – click here – looks at ‘the facts’ about the new UK Lufthansa Miles & More credit card (which isn’t a credit card).  This article is my personal view on whether the cards are worth getting.

Let’s face it, this is a weird product

It’s hard to know where to start:

It is a Diners Club card, which virtually no-one accepts

…. and it is a Charge Card, so you can’t pay interest on it – you MUST clear your balance each month

It also comes with a Pre-Paid Mastercard …..

…. which acts like a normal Mastercard, except that you also don’t get any credit period and MUST clear your balance each month

However, let’s be realistic

None of what I wrote above really matters.  What you should do, if you get this card, is:

Put the Diners Club card into a drawer and never look at it again

Treat the Mastercard like any other Mastercard, even though it is technically a Pre-Paid one

It’s a weird structure but it shouldn’t impact your decision on whether to apply.

New Lufthansa UK credit card from Diners Club

Should you get the cards IF you already collect Miles & More miles?

YES.  I think it is clearly good value for the first year:

You are paying a £79 fee but getting a bonus of 10,000 Miles & More miles.  These are worth more than £79 if used well.  There is no spend target with the bonus arriving after your first purchase.

For the rest of the first year you are getting an excellent earnings rate of 1.25 Miles & More miles per £1

Having the card stops your existing Miles & More miles expiring.  A lot of people will (reluctantly) end up paying £79 per year long-term for this card simply to protect their valuable existing stash of miles.  Remember that Miles & More miles usually expire three years after you earn them irrespective of your activity.

I personally have 200,000 Miles & More miles, worth £2000+ of free flights, and paying £79 to safeguard them is a price I will (un)willingly pay.

Should you keep the cards after the first year?

Tricky.  Whilst the earnings rate is excellent, the £79 fee is high.  The more you spend, the better value it is – I run some numbers below.

You may feel you need to keep it just to keep your existing balance from expiring.

New Lufthansa UK credit card Diners Club

Should you get the cards if you DON’T already collect Miles & More miles?

Put another way, is this a good reason to start building up a Miles & More balance?

Lufthansa Miles & More miles get you access to ‘free’ flights on all airlines in Star Alliance.  You can redeem on these carriers: Adria, Aegean, Air Canada, Air China, Air India, Air New Zealand, ANA, Asiana, Austrian, Avianca, Brussels, Copa, Croatia, Egypt, Ethopian, Eva, LOT Polish, Lufthansa, Scandinavian, Shenzen, Singapore, South African, Swiss, TAP Portugal, Thai, Turkish and United.

With a Star Alliance balance alongside an Avios / oneworld balance, you’ll never be short of airlines to redeem with.

The downsides are:

High fuel surcharges

Expensive mileage rates and heavy surcharges on short haul (35,000 miles  + £80 tax for an ECONOMY return from Heathrow to Frankfurt for example!)

The real value is in long-haul Business Class and First Class redemptions.  This means that you need lots of miles, unfortunately.  A relatively modest redemption (UK to Dubai in Business Class) is 70,000 miles return plus £516 in taxes and charges.  This is, admittedly, cheaper than using Avios (100,000 Avios off-peak or 120,000 Avios peak with similar taxes) but is still a lot to earn purely from card spend.

This card is only worth getting if:

You have SUBSTANTIAL monthly credit card – let’s say £5000+ – which would allow you to build up enough for Business or First Class long-haul redemptions over time

or

You collect Miles & More miles from Star Alliance flights and will top up your balance with this card

You cannot earn additional Miles & More miles by converting American Express Membership Rewards points as Lufthansa is not a partner.  The best indirect Membership Rewards route is to transfer to Marriott and onwards to Miles & More which is an effective rate of 0.5 M&M miles per Amex point.  This is not great.

You CAN transfer Marriott / Starwood points earned from the Starwood Preferred Guest American Express card to Miles & More.  You would get 10,000 Miles & More for signing up and converting the 30,000 bonus SPG / Marriott points.  Having the Starwood Amex card does NOT stop your Miles & More miles from expiring though.

You can top up your account in other ways, such as crediting the occasional hotel stay or car hire, or transferring Heathrow Rewards points, but you will struggle to find ways of earning lots of Miles & More miles apart from the card or flying.

You CANNOT form a Household Account unless you live in Germany, Austria or Switzerland.

New Lufthansa UK credit card

How does this card compare with other Visa or Mastercard products?

Let’s do a comparison using the three ‘best’ alternative cards open to new applications:

Lufthansa Miles & More Diners Club / Mastercard – earns 1.25 Miles & More miles per £1 which I value at 1p each.  Annual fee £79.

IHG Rewards Club Premium Mastercard – earns 2 IHG points per £1 which I value at 0.4p each, and you get a free night each year (which I value at £250) if you spend £10,000.  Points count towards status so top-tier Spire Elite is triggered with £37,500 of spending even if you have no IHG stays – this earns you a bonus of 25,000 points which I value at £100.  Annual fee £99.

Virgin Atlantic Reward Mastercard – earns 0.75 Virgin Flying Club miles per £1 which I value at 1p each, comes with a companion or upgrade voucher for spending £20,000 which is hard to value.  No annual fee.

Virgin Atlantic Reward+ Mastercard – earns 1.5 Virgin Flying Club miles per £1 which I value at 1p each, comes with a companion or upgrade voucher for spending £10,000 which is hard to value.  Annual fee £160.

This is what you’d get back:

Annual Visa / Mastercard spend of £10,000:

  • Lufthansa – £125 of miles minus £79 fee = £46 of benefits
  • IHG Premium – £80 of points plus £250 free night minus £99 fee = £231 of benefits
  • Virgin Atlantic Reward – £75 of miles = £75 of benefits
  • Virgin Atlantic Reward+ – £150 of miles minus £160 fee = £(10) of benefits plus any value from the voucher

IHG Rewards Club Premium is the clear winner at £10,000 of annual spend with a 2.3% return.

Annual Visa / Mastercard spend of £20,000:

  • Lufthansa – £250 of miles minus £79 fee = £171 of benefits
  • IHG Premium – £160 of points plus £250 free night minus £99 fee = £311 of benefits
  • Virgin Atlantic Reward – £150 of miles = £150 of benefits plus any value from the voucher
  • Virgin Atlantic Reward+ – £300 of miles minus £160 fee = £140 of benefits plus any value from the voucher

IHG Rewards Club Premium is the clear winner at £20,000 of annual spend with a 1.65% return.

Annual Visa / Mastercard spend of £50,000:

  • Lufthansa – £625 of miles minus £79 fee = £546 of benefits
  • IHG Premium – £400 of points plus £250 free night minus £99 fee = £551 of benefits plus any value from Spire Elite status plus £100 Spire Elite bonus
  • Virgin Atlantic Reward – £375 of miles = £375 of benefits plus any value from the voucher
  • Virgin Atlantic Reward+ – £750 of miles minus £160 fee = £590 of benefits plus any value from the voucher

All three of the paid cards are fairly evenly balanced at £50,000 of annual spending at around 1.1%-1.3% return.

Annual Visa / Mastercard spend of £100,000:

  • Lufthansa – £1250 of miles minus £79 fee = £1171 of benefits
  • IHG Premium – £800 of points plus £250 free night minus £99 fee = £951 of benefits plus any value from Spire Elite status plus £100 Spire Elite bonus
  • Virgin Atlantic Reward – £750 of miles = £750 of benefits plus any value from the voucher
  • Virgin Atlantic Reward+ – £1500 of miles minus £160 fee = £1340 of benefits plus any value from the voucher

At very high levels of spend, the Virgin Atlantic Reward+ card has the edge.  That said, it is close enough to the Miles & More card that I would base my decision on whose flight network I preferred and whether I would use the companion or upgrade voucher from the Virgin Atlantic card.

Conclusion

Will I be getting the new Lufthansa Miles & More charge card?  Yes, I will.  10,000 Miles & More miles for £79 is a no-brainer and it will keep my existing 200,000 miles alive.

Will I keep it long term?  I don’t want to, but I have little choice as long as I have a six-figure mileage balance at risk of expiry.

Should YOU get it?:

Got Miles & More status?  You don’t need this card, unless you have lots of Mastercard spend which cannot be put onto an American Express instead.  The Starwood Amex is a more flexible option with the same earnings rate.  You don’t need the ‘miles no longer expire’ benefit offered by this new card as elite members don’t suffer expiry.

Collect Miles & More miles but don’t have status?  For those with a Miles & More balance, this new card is a good way to top up your account and keep those miles from expiring.  I fall into this category.

For everyone else ….. the answer is “probably not”.  You can only get good value for their miles on long-haul premium redemptions and only a big spender will earn enough purely from card spend.  A better option for a Mastercard or Visa to use alongside – for most HFP readers – a British Airways American Express is the IHG Rewards Club Premium Mastercard or one of the two Virgin Atlantic Reward Mastercards.

You can apply for the new Miles & More cards here.

PS.  In all seriousness, I am impressed by what Lufthansa has done here.  It may be a weird structure, but they have succeeded where Emirates, Etihad, American and United have so far failed and got a new UK card to market – and one with a generous earning rate too.  There will have been some interesting conversations at Avios, Hilton, Emirates, Etihad, American, United etc yesterday.

(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.

Lufthansa launches a new UK charge card – partly as a Diners Club! Should you apply? (Part 1)
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Comments

  1. Roger1* says:

    Rob, thanks very much for your comprehensive reviews and advice. I almost jumped when I got the e-mail but am glad that I slept on it until this morning’s HFPs.

    My formerly large bundle of M&M miles – depleted by 4x F returns on LX/LH to South Africa – is down to about 20k. My wife’s balance is about the same. With no M&M status, this means we are in the Other category. In the absense of (weep!) bmi, I was looking for a decent card, especially with a number of LX bookings coming up (family pressures).

    I can now relax. Do I need another card? No. Could I use 10,000 welcome miles for £79? Possibly. Or should I just jack out, convert my M&M miles to Amazon or other vouchers and effectively forget Miles and More? That’s looking more and more likely.

    Just so long as my commitment to Avios remains relatively undisturbed.

    • I’m in the same boat. Both my wife and I have around 20,000 M&M miles each, and no status. We don’t really fly very often, and when we do we tend to use Avios. Reckon we might do the following: sign up for the cards, spend to get the 10k bonus, then transfer all our points to Heathrow Rewards, or get some vouchers.

      There’s no way we can justify spending £79 each just to keep our measly M&M balances alive.

      • You don’t want to get the £79 card to convert 10k points to vouchers or HR Jason, they are only worth about £25. By all means cash out what you have if you wish but don’t get card for that purpose.

    • Roger, would appreciate a brief comment on the LH rules and penalties for cancelling or changing a redemption if possible please?

      • I did two canx last month. €50 fee, charged upfront when you call to cancel. Cannot cancel online. Full miles and taxes repaid. S..L..O..W in returning the cash, miles returned instantly. Not sure if the deadline is 24 hours or a bit more, I cancelled about a week in advance.

  2. Lack of a supplementary card holder really hurts this, what’s the rationale behind that?

    Also – is Rob allowed to write off the £79 fee (and all other card fees) as a business expense given that the need to always have an active M&M points balance / status to review premium products for readership?

    • I’m pretty sure anyone can write off a card fee if it’s used for business purposes only..

    • I can write it off if I only use the card for HFP purchases, but the snag is that most of our costs are in US$ and the 3% FX fee would wipe out the tax advantage.

      • i cant imagine why your costs are in USD – if your main overheads are Anika salary, IT, and Wework rental, would be surprised if any of those are billed in USD.

        • Of the cardable stuff, WeWork is £. Our hosting, back-up, IT fall-back, domain registration, mailing list and competition providers all charge in $ (or Oz$).

        • I doubt Anika accepts Amex (or even Diners Club!) for her salary…

    • Could Curve be useful here?
      They don’t work with Diners, but they will presumably take the M&M Mastercard.

      1) To help with the likely rejections Rob mentions – present Curve and put through to any old card, then use the Curve “Go Back In Time” feature to move it to this Mastercard at a non-urgent time?

      2) Can one connect two Curve cards to the same underlying card account which would give a virtual supplementary card?
      If not, is there a competitor to Curve which one could add to the chain, so one goes Curve-M&M, other goes Curve-Competitor-M&M ?

      • You cannot have the same underlying card on more than 1 Curve card – this was a problem on the old MBNA cards, as both the main and sup number would be the same.

      • Also, Curve doesn’t accept ‘Prepaid Cards’, so this will likely be rejected.

  3. I *had* a diners club card just before they changed all the rules around entry to lounges.

    One thing to add is that although practically nobody advertises they take Diners Club, they DO take Discover (especially in the USA) – anywhere you see the Discover logo, Diners Club is taken…..so its *ALOT* more than you think or expect – though, AMEX probably still wins on number of places its accepted.

    Until ~2014 it was about £50/year for unlimited access to several partner lounges and a £15 charge for a guest. This changed to £15 each.

    Oddly, I at the time was doing a lot of flying to HEL and they were touting Diners club in the airport – BUT HAD NO LOUNGES!! lol!

  4. Nigel the Pensioner says:

    Will I keep it long term? I don’t want to, but I have little choice as long as I have a six-figure mileage balance at risk of expiry.

    I have a great idea for Rob! Why not use the miles for a long haul freebie flight???? Is this not essentially what they are for? 200,000 is surely enough, so do you need to spend another £79 on 10,000 wasted miles as once you have chopped in say 150,000, you will have 60,000 which you can do as little with as 50,000 so why pay £79 for “nothing”?
    I personally find the Business cabin somewhat sterile and uninspiring just like their lounges. The last time I flew to SFO with them (by necessity) I had to feign being asleep as they would not stop trying to ram food and drink down me!!!
    Roll on Tuesday when I will once again be in the haven of BA to SFO!

    • M&M is my insurance policy, a bit like my BA OnBusiness points. For example, the ONLY way I could get back from New York two weeks ago was on Lufthansa via Munich. Not a single seat on any oneworld airline to Europe in Business or First over a 2-day period. Blowing them unnecessarily would not be smart.

      • +1, I am building FB, M&M and MP to around 100k each as backup when cash does not work or avios awards are unavailable.

  5. Has anyone applied for these this morning and found the application process odd? Enter all your details, emailed a credit agreement to e-sign and send back. That’s it! No indication of acceptance/reject/defer?

    • Yes, Diners Club is still living in the last decade I’m afraid. You should probably be grateful that you don’t need to wait for them to post you a paper form which you need to sign and post back ….

  6. I think I’m going to have ~50k M&M points due to the Hilton promotion that’s been running. The question is do I look to build on this or what could/should I do with them?

    • Brighton Belle says:

      +1

      • Yes, that’s my dilemma too.

        I’ve decided to jump in, get this card and start focussing on M&M more seriously. The hard product seems far superior to BA, and living in ‘the regions’ a change at Frankfurt or Munich is not much more inconvenient than getting to LHR. Some of the mileage bargains look decent value too (Seoul for 75k return in business, for example).

        • Yeah – the only reasonable value that I can find comes from longer haul flights. Everything else feels like you’re getting 20% of what you should. The problem is, once the Hilton promo ends (and I don’t travel on anything other than BA with work, currently) I would only have card throughput points. And getting to 75k x 2 (decent J flights for 2) would take too long.

          So I wonder if I’m going to have to either keep hold for a rainy day (and ensure they stay alive) or blow them on shopping vouchers or car rental. If this was Avios, there’s no way I’d use them for anything other than flights/upgrades.

        • My thinking is:

          – Hilton Promo (50k)
          – £3k per month spend on the LH card (45k per year)
          – transfer over a slug from SPG/Marriott every now and again
          – plus the occasional care hire/hotel promo.

          So i’m also playing the longer game here and looking at a redemption in 1-2 years.

  7. I quite like the Economy Fly Smart last-minute LH flights for 35,000 all in, which is why I persist with the M&M programme. For me, possibly a reason for keeping my 100K alive for these… plus possibly the £15 lounge fees. Can anybody report as to the quality of these, and also unclear if a companion can always gain entry for the same £15 fee, and do you have to be on a LH flight to qualify for lounge entry?

    • The £15 lounges are the standard Plaza Premium / No 1 / Aspire ones, they are on the Diners Club website. It does NOT include Lufthansa lounges, except for the one pass you get when signing up.

  8. Dominic says:

    I had some legacy M&M points which I’d been keeping alive with the MBNA card, kept alive as I paid my Netflix subscription on it monthly! Honestly can’t see the benefit in this and have never had quite enough to get a decent reward flight. Possibly enough to do one business class to New York but not a journey I’d ever do solo and not enough for the family. So came to the conclusion using them for some Heathrow gift cards was better than this card…

  9. Richmond_Surrey says:

    If you don’t know what to do with MM miles, you can use them on United Island Hopper and taxes are really low. Possibly other flights in USA.

    I will wait a bit and see when people start getting the card. Offline process will probably take some time.

  10. Yes LH seem to have put this together very quickly and with unusual components.
    The application form shows that it has been cobbled together – with an Adobe Sign form and Salesforce. It doesnt do anything like validating your post code or bank details. The email verification also has strange wording “After you confirm your signature, you and Janet P**** will be emailed a signed copy”. When you put the name into google it even suggests ..Diners Club.

    I can’t see any use for the Diners Club Card, except for the miles, and for a Global Travellers Card to charge 3.3% for FX is a rip off.
    That said its useful to keep my hard earned Miles and More points alive.
    One question is if the Mastercard appears as a pre-paid card will it allow use for car hire or hotel deposits?

  11. Neil Holland says:

    What is availability like on Lufthansa redemption flights? Getting this card (to add to c. 15k points from Hilton promo) and playing a (very) long game to get a his-and-hers redemption of the Far East in c. 4 years will be a bit pointless if I can never book a pair of seats in business or first…!

    • Fairly easy. We got 4 SWISS J to Dubai for half term on the day we wanted.

      • Many thanks, do they release 355 days out per BA and are there guarantees about availability on any given flight?

        Ta

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