BA sale

Should you dump your free BA Amex for the Amex Rewards Credit Card? Possibly.

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

Yes, you read that right.  If you have the free British Airways American Express card, I think it is worth thinking about dropping it for the little-known American Express Rewards Credit Card (“ARCC”).

We don’t cover the ARCC card much on Head for Points so I am dedicating two articles this week to highlighting the core features again.  I wrote about the American Express Rewards Credit Card yesterday (click here) – you may want to read that article first if you missed it.

Let me explain why the ARCC card may be better for you than the free BA card.

Do you spend £20,000 per year on your free BA Amex card?

I have long argued that no-one should have the free BA Amex card if they intend to trigger the 2-4-1 voucher for spending £20,000.

This HFP article explains my thinking in detail.

In summary, though:

The 241 voucher is only valid for one year, instead of two years for the BA Premium Plus voucher, which is a major issue if you want to book seats 355 days in advance!

The £10,000 of ‘extra’ spending required to trigger the voucher (£20,000 compared to £10,000 on the Premium Plus card) could be directed elsewhere, triggering sign-up bonuses on other cards

You earn an extra 0.5 Avios per £1 spent, which offsets much of the £195 annual fee on the Premium Plus card

If you spend £20,000 per year on the free BA Amex card, I strongly – very strongly – suggest upgrading to the Premium Plus card.

(You need to call Amex to do this and you won’t get any bonus for doing so, but it is worth it.  Your card year remains the same, and if you have already spent £10,000 this card year on the free card then your 2-4-1 companion voucher is triggered immediately.)

If you spend between £10,000 and £20,000 per year, so you don’t trigger a voucher at the moment but would with the Premium Plus card, it also logically makes sense to switch.

The only reason to have the free British Airways American Express card is if you spend LESS than £10,000 per year.  You don’t spend enough to earn a 2-4-1 voucher but you appreciate the high Avios earning rate.

Except ……

What if you don’t spend £10,000 per year on your free British Airways American Express card?

I know that a lot of people don’t spend large amounts on their free BA Amex card.  They don’t trigger the 2-4-1 companion voucher BUT they like earning 1 Avios for every £1 they spend.

If this is you, you are better off with the new American Express Rewards Credit Card.

Amex Rewards Credit Card

What is the American Express Rewards Credit Card?

ARCC is a standard Amex-branded credit card.  It has no annual fee and no substantial benefits, except for the ability to collect Membership Rewards points at 1 point per £1 spent.

There are three versions of the card available:

LOW RATE – 5,000 Membership Rewards points bonus and a representative APR of 9.9% variable (click here)

or

BASIC – 10,000 Membership Rewards points bonus and a representative APR of 22.9% variable (click here)

or

PURCHASES – NO sign-up bonus but 0% APR on purchases for 18 months and a representative APR of 22.9% variable beyond that (click here)

The first two cards require a £500 (5,000 points version) or £1,000 (10,000 points version) spend within three months to trigger the bonus.

You will not get the sign-up bonus if you have had a Gold or Platinum Amex card – or any other Amex card which gives Membership Rewards points – in the last six months.  You can still apply for the card, however.

Why is the Amex Rewards Credit Card better than the free BA Amex card for low spenders?

Here’s the interesting bit:

The free British Airways American Express card earns 1 Avios per £1 spent

The free Amex Rewards Credit Card earns 1 Membership Rewards point per £1 spent.  These transfer 1:1 into Avios points if that is what you choose to do.

What you get with the ARCC card is flexibility.

Yes, you can use your points for Avios.  You can send them over to BA via the Amex website and they will arrive within 48 hours.

However, you have other options.  Membership Rewards points can also be sent to Virgin Atlantic, Flying Blue, Emirates, Etihad, Delta among other airline partners.  You can also send them to Hilton Honors (1:2), Marriott Rewards (2:3) and Radisson Rewards (1:3).  You can convert them to Club Eurostar (15:1).  You can even use them for shopping vouchers.  You can see the airline partners here.

The new ARCC card gives you more choice.  You can still take Avios if you want, and at the same 1 Avios per £1 earning rate.  If you suddenly decide that you want hotel points, or that Virgin Atlantic miles make more sense, or even that you want to abandon Avios altogether, you can.  Simply move your Amex points somewhere else instead.

With the free BA Amex card, your points are sitting in Avios from Day 1 and you can’t do anything else with them.  If Avios devalues its rewards, if BA stops flying your preferred route, if reward availability suddenly gets a lot harder to find, if Reward Flight Saver fees jump up, if new surcharges get added ….. you’re stuck.

Swapping to the Amex Rewards Credit Card gives you more control over your points.

The only good reason NOT to drop your free BA Amex is that having the ARCC card means that you cannot get a sign-up bonus on an Amex Gold or Amex Platinum card at the same time.  On the other hand, once you have gone six months without the free BA Amex, you would be able to apply for either of the two BA cards again, purely to earn a sign-up bonus.

Conclusion

There are now good reasons for EVERY holder of the free British Airways American Express card to reconsider.

If you spend over £20,000 on the free card to trigger the 241 voucher, I think you’re making a mistake as my old article here explains 

For lower spenders, who aren’t bothered about the 241 voucher, I now believe that the Amex Rewards Credit Card offers a compelling alternative

Even better, two versions of the FREE ARCC card – Low Rate and Basic – offer an attractive sign-up bonus if you haven’t had a Gold or Platinum American Express charge card in the last six months.

If you go for the ‘Purchases’ versionyou will also get 18 months interest free credit on everything you buy.

If you go for the ‘Low Rate’ version, you will be paying a representative APR of 9.9% variable.  This is far cheaper than the free British Airways Amex card which charges a whopping representative APR of 22.9% variable.

Something to think about …..

PS.  Why is Amex putting its BA relationship at risk by offering a better card?  Simple.  As this card is not a co-brand card, Amex can charge its full interchange fee to shops.  The BA Amex falls under the EU caps on interchange fees, which means that Amex can charge a maximum of 0.3%.  It now has a big incentive to encourage people to move away from the BA, Starwood and Nectar co-brand cards onto its own products.

(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 financial products 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.

Some interesting facts from my tour of KLM's engine overhaul workshop
Why crediting Hertz rentals to IHG Rewards Club is surprisingly attractive

Head for Points is sponsored by:

Magazine montage

Up to 30% off in Hilton's Winter Sale

Click here to find out more and book

Click here to join the 14,500 people on our email list and receive the latest Avios, miles and points news by 6am.

Amazon ad
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.

Comments

  1. sdconniechan says:

    I have a free BA card, applied and got the avios reward a year ago. Am I eligible to apply for the new free ARCC card? Or do I need to cancel the BA card and wait for 6 months? Thanks!

    • You are always eligible to apply for any Amex as long as you meet the general criteria (UK resident over 18 with no bad debt etc.)

      I suppose you are really asking if you will get the signup bonus. The answer is yes, the signup bonuses for the BA cards and the MR cards (ARCC, Gold, Platinum) are separate.

      You only need to cancel the BA card and wait 6 months if you want to get the signup bonus for the BA (premium or free) card again.

    • You always were OK – ARCC bonuses have nothing to do with the BA Amex. This article explains how the Amex bonuses work: https://www.headforpoints.com/2018/02/12/who-qualifies-for-an-american-express-sign-up-bonus/

Please click here to read our data protection policy before submitting your comment.