What are the best credit card bonuses for LONG TERM spending?

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Many of the credit card articles on Head for Points are focused on sign-up bonuses.  Get a card, spend the minimum required to trigger the bonus and potentially move on.

However, if you are a high to medium spender, the few thousand pounds of card spend required each year to hit your sign-up bonus targets is not a stretch.  You need to consider where to put the rest of your annual spend.

All of these cards carry a 3% foreign exchange fee when used abroad.  If you want a dedicated credit card to use abroad, take a look at the Virgin Money Travel Credit Card (click here).  This card is free and charges NO foreign exchange fees.  It also offers 0% interest on purchases for 12 months and 0% interest on balance transfers for 12 months, with no fee.  Representative APR 21.9% variable.

What are the best UK credit and charge card bonuses for long term spending?

Many issuers offer incentives for spending £10,000+ per year on their cards.  The value of these perks is often underestimated – they are often worth far more than the points for your normal spend.

In order of value, lets take a look at what is out there.  This analysis ignores the value of any sign-up bonus or ‘first year free’ deal – I am looking for the best long-term solution.

Excluding the Virgin credit cards, the results summary is, based on spending just enough to trigger the relevant long-term bonus:

  • British Airways American Express Premium Plus – 10.1% back on first £10,000
  • British Airways American Express (free version) – 6.1% back on first £20,000
  • IHG Rewards Club Premium Mastercard – 2.3% back on first £10,000
  • Generic cashback Visa or Mastercard – 0.5% back, usually in vouchers

Your return on the free Virgin Money Reward card varies by status:

  • Base Virgin Flying Club member – up to 2.4% on first £20,000
  • Silver Virgin Flying Club member – up to 3.4% on first £20,000
  • Gold Virgin Flying Club member – up to 6.4% on first £20,000

Your return on the £160 Virgin Money Reward+ card also varies by status:

  • Base Virgin Flying Club member – up to 3.3% on first £10,000
  • Silver Virgin Flying Club member – up to 5.1% on first £10,000
  • Gold Virgin Flying Club member – up to 11.4% on first £10,000

I will explain the basis of my calculations below.  The BA and Virgin calculations are based on using the 241 voucher for San Francisco or a flight of similar length.

Our base comparison –  The John Lewis / Waitrose Partnership Card or similar

This is typical of the best free Visa or Mastercard cashback cards currently available, giving you 0.5% of your general spending back in the form of shopping vouchers.

Representative APR 18.9% variable.

The winner British Airways American Express Premium Plus card

This is not exactly a surprise.  Spend £10,000 on this card and you get a voucher which gives you two Avios redemption tickets (on BA planes, ex-UK only) for the miles of one.  On an average redemption (2 Club World tickets to San Francisco on a peak day), this saves you 150,000 Avios points!

Based on my very conservative 0.75p per Avios point valuation, the 2-4-1 voucher is ‘worth’ £1,100.  You also earn 15,000 Avios for spending £10,000 (worth £110 assuming 0.75p per Avios) with an annual fee of £195.  The net benefit for spending £10,000 = £1,015 (£1,100 + £110 – £195) or 10.1% of spend.

Representative APR 76.0% variable including £195 fee based on a notional £1200 credit limit Interest rate on purchases 22.9% variable.

BA Amex - NEW

Runner-upBritish Airways American Express card

The standard, free, British Airways Amex gives you a 2-4-1 voucher when you spend £20,000, and a lower 1 mile per £1 on your spending.  Using the same maths as above, £20,000 of spend gets you £1,100 of 2-4-1 benefit plus 20,000 Avios for your £20,000 of spending, worth £150.  There is no fee.  The net benefit for spending £20,000 = £1,250 or 6.1% of spend.

However, if you plan to earn the 2-4-1, the British Airways Premium Plus Amex is more attractive.  The card has a higher earnings rate and the 2-4-1 voucher lasts for two years instead of one.

Representative APR 22.9% variable.

Honourable mention, airline category Virgin Money Reward Mastercard 

The new Virgin credit cards are very hard to value because you have a choice of rewards which are determined by your Virgin Flying Club status.

Spend £20,000 on this card and you can get:

A 2-4-1 voucher, valid for two years, for a Virgin Flying Club redemption in Economy (base members), Premium (Silver members) or Upper Class (Gold members) or

A return upgrade to Premium when you book an Economy reward flight (requires reward availability in Premium)

Let’s assume you use the 2-4-1 voucher to fly to San Francisco on a peak day.  A base member redeeming in Economy will save 50,000 miles; a Silver member redeeming in Premium will save 75,000 miles and a Gold member redeeming in Upper Class will save 155,000 miles.

Someone using the upgrade voucher to redeem in Premium rather than Economy will save 25,000 miles.

Based on my very conservative 0.75p per Virgin Flying Club mile valuation, the 2-4-1 voucher is ‘worth’ between £375 and £1162.  The upgrade voucher would be worth £187.50.  You would also earn 15,000 miles for spending £20,000, valued at £112.50. The card itself is free.

The low end valuation is a base member using the upgrade voucher: £187.50 value from the voucher plus £112.50 of value from miles earned, total £300 back on £20,000 of spending.  This is a return of 1.5%.

The high end valuation is a Gold member using the 2-4-1 voucher in Upper Class, assuming a flight to San Francisco:  £1162 value from the voucher plus £112.50 of value from miles earned, total £1273 back on £20,000 of spending.  This is a return of 6.4%.

Representative APR 22.9% variable.

Virgin Reward Plus credit card

Honourable mention, airline category Virgin Money Reward+ Mastercard 

This card is equally hard to value.  Spend £10,000 on this card, which has a £160 fee, and you can get:

A 2-4-1 voucher, valid for two years, for a Virgin Flying Club redemption in Economy (base members), Premium (Silver members) or Upper Class (Gold members) or

A return upgrade to Premium when you book an Economy reward flight (requires reward availability in Premium)

The maths is the same as with my analysis of the free card.  With a 2-4-1 to San Francisco on a peak day, a base member redeeming in Economy will save 50,000 miles; a Silver member redeeming in Premium will save 75,000 miles and a Gold member redeeming in Upper Class will save 155,000 miles.

Someone using the upgrade voucher to redeem in Premium rather than Economy will save 25,000 miles.

Based on my very conservative 0.75p per Virgin Flying Club mile valuation, the 2-4-1 voucher is ‘worth’ between £375 and £1162.  The upgrade voucher would be worth £187.50.  You would also 15,000 miles for spending £10,000, valued at £112.50. The card has a £160 annual fee.

The low end valuation is a base member using the upgrade voucher: £187.50 value from the voucher plus £112.50 of value from miles earned, total £300 back on £10,000 of spending, less the £160 fee.

The high end valuation is a Gold member using the 2-4-1 voucher for Upper Class, assuming a flight to San Francisco:  £1162 value from the voucher plus £112.50 of value from miles earned, total £1274 back on £10,000 of spending, less the £160 fee.

This means the net benefit for spending £10,000 = between £140 and £1114, or 1.4% to 11.1% of spend.

Representative APR 63.9% variable including £160 fee based on a notional £1200 credit limit.  Interest rate on purchases 22.9% variable.

Honourable mention, hotel categoryIHG Rewards Club Premium Mastercard

The premium version of the IHG Rewards Club card gives you a voucher when you spend £10,000 for a free night in ANY IHG Rewards Club property.  I am assuming you use this somewhere expensive, such as the InterContinental in London, Paris, Hong Kong, New York etc for a £250 room.

In addition, you would have earned 20,000 points from your £10,000 of spend which I value at £80.  The card fee is £99.  The net benefit for spending £10,000 = £231 or 2.3% of spend.

Representative APR 41.5% variable including fee based on a notional £1200 credit limit.

I also considered the value of the long-term spend bonuses on these other cards, but dismissed them as poor value:

Starwood American Express – upgrade to Marriott Bonvoy Gold status for spending £15,000 and a free night voucher for spending £25,000.  Marriott Bonvoy Gold has only modest benefits and is often available for free, eg as an Amex Platinum benefit.  The free night is valid only at hotels costing up to 25,000 points, which limits its use considerably, and the value of such a free night (generally around £100) is a small reward for such substantial expenditure.  The card has a £75 fee.

American Express Preferred Rewards Gold – 10,000 Membership Rewards points when you spend £15,000, paid when you next renew.  I would value the 10,000 points at £75 (assuming you transfer to airline miles and achieve 0.75p of value).  You also receive two additional Lounge Club vouchers with each renewal.  Given the £140 annual fee after the first year, your net return is low.

I also feel that the Lufthansa Miles & More Diners Club and Mastercard package deserves a mention.  Whilst there is no long-term spend bonus, the day-to-day earning rate of 1.25 miles per £1 is very strong.  You need to be a high spender to maximise value due to the £79 annual fee, although the 10,000 mile sign-up bonus offsets much of it in the first year.

I am happy to hear arguments for and against my views here – many of these rewards are subjectively valued, dependant on your travel patterns.

(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.)

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Comments

  1. Just about to hit the free night target on IHG and don’t need extra points for Spire as I have 47 nights already with rollover and 29 in the bank for the next few months. I can reapply for HSBC WE in 4 months for the sign up bonus.

    What would be a good stopgap, I’m generally not interested in Virgin miles?

    • I presume we’re talking non-Amex? I’d stick with spending on IHG unless you really don’t need the points. Bear in mind that the Virgin+ card is the highest earning Hilton card in the UK at 2.25 / £ (1.5 x 1.5).

    • I suppose my other option is to start collecting Flying Club miles and see what happens?

  2. Because you don’t. You get 0.5% on the first £5,000 of spend (but you get nothing if you spend under £3,000) and 1% back on your spend over £5,000. And it’s an Amex with restricted acceptance. Not exactly an easy to understand comparator.

    • Something to bear in mind is that the cash back is paid at year end.

    • It’s not “joint best”. The Tandem card for example is demonstrably better. Even Aqua is arguably better, though I know you look down on it because it’s clientele is generally poor.

      • I’m totally ambivalent, none of them pay us anything! It is a bit pointless using Tandem as a reference when 95% of people have never heard of them, however, which is not the case with Amazon or John Lewis.

    • So you only want to tell people about what they already know? Seems to contradict the entire point of writing an article to me!

    • Correct. But that isn’t what this article is about.

  3. Any idea on the taxes/fees for Virgin Econ/Upper Class to TLV?

  4. OT – Does the IHG points tracker on Creation’s website have a habit of resetting? I triggered the welcome bonus last month – spend points + welcome bonus shows on statement but the ‘earned total’ on the dashboard section of the website now only shows points from this month’s spend – the same as the ‘earned this month’ to the left of it.

    Also how long to points normally take to post in IHG reward account?

    • Not sure about the resetting; points normally transfer within a day or two but occasionally Trevor/Bob in IT mis be on leave and it can take a week.

      • *must

      • Interestingly I noted that the date on my statement was today (25/2), despite receiving the email about it being generated on Sat 23rd. Make me wonder if the IHG points transfer will be more linked to statement date (although it does always fluctuate).

    • My wife’s account ( a few months old) shows same number for this month and total, so you have not been singled out.

  5. Amex/Hilton
    Could I buy the Hilton gift card to use the £75 off £200 Amex offer?

  6. OT: BA to Gibraltar, pilots having a tough time of it, and so were the pax…
    https://www.express.co.uk/travel/articles/1092144/British-Airways-flight-plane-London-Heathrow-Gibraltar-Malaga-Spain-strong-winds-travel

    (excuse the source)

    • I remember flying in in a HS125, lost 300ft at about 500ft on the approach and was given it back shortly afterwards leading to a very unstable approach. Second time was a little better and we got in albeit with a requirement for new underwear.

  7. Question regarding BA Amex cards.

    If you were to use the free BA Amex with card year starting in January, reach £10k spend in December and upgrade to trigger the 241 voucher with the BAPP card which you then want to keep for the following year.

    Would you then have to pay the £195 fee in the December, then pay it again the following month at the start of the next card year?

  8. OT — Interesting piece in the FT this weekend by Jancis Robinson about airline wines and BA’s changing attitude to on-board wine over the years. (Paywall link only, I’m afraid.)

    https://www.ft.com/content/7c836672-34a3-11e9-bd3a-8b2a211d90d5

  9. OT:

    I’m wanting to use the £50 back when you spend £200 offer on Amex Travel.

    Is there any way I can book a different drop off to the pick up destination?

    Can’t see how to do it on the UK site. Not certain if I’d get the £50 if I use the US site.

    Any ideas?

  10. Optimus Prime says:
  11. I used to have a John Lewis card and earnings are 1 point per £1 on spend at Waitrose, John Lewis and Kuoni. 2 points per £1 spend anywhere else. For 500 points earned you pick up £5 in gift vouchers, only to be used at the above stores and within a set time frame you have no control over. I cannot remember a time when they offered extra points for purchasing certain products although this may have changed. We dropped it in favor of the amex Gold credit card: put £15,000 of travel spend on the card and pick up 30,000 MR points plus10,000 bonus points every year you hit the target spend. Not accounting for any other spend that’s 40,000 points in possibly one of the best point and miles schemes around for £140.

    The BA premier card could arguably be the preferred card over the Gold credit card for any daily spend which isn’t travel specific at 1.5 avios per £1. But I can’t get my hear around how the companion voucher is a string incentive for long term spend.

    Going to the example of flights from UK to SFO in the article and assuming one way: BA285 LHR-SFO is £891.44 for two people plus 75,000 avios. So you’ve paid £1,086.44 for those tickets which includes the credit card fee of £195. Probably more important for us point collectors we’re now down 75,000 avios. Not a paltry sum. On the same day TAP are flying LHR-SFO in business class on their new A330-900s at p.p. £875. BA’s flight is on a 20 year old 747-400. Granted it’s almost double the cash element and one stop in Portugal, but if you took this flight instead of the BA flight you’d of saved 75,000 avios p.p., the card fee of £195, you’d have all the privileges of a cash paying customer, not reliant on award availability and be on a new aircraft earning not burning points. And of course you’ve still got you 40,000 MR points from the amex Gold card. So still thinking the Gold card is the best card for long term spending.

    • Russ,
      Good points. You will find on here regularly that folks will often cancel a BA F or J 241 to Asia, when a good cash sale comes along, as you have pointed out. Indeed, we have done so ourselves when those great Qatar ex Eu sales came along, once upon a time, never to be seen again, we fear!

      Re the gold card, yes, just hope you are churning that card, and cancelling it a month or so into the 2nd year, with your pro rata refund. Much better to be getting the referral 9k bonus plus the 22k spend bonus plus the 10k bonus for the 15k annual spend x 2 every year.

      You could add in the BAPP x 2 each year, one each. And only keep one card going to earn the 241 at 10k spend. But the other BAPP drop it down to the free blue BACC once the 26k spend avios are safely banked.

      That’s if you are after saving sufficient avios to aim for an F or J LH redemption every year.

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