If your Lloyds Avios Rewards American Express card is being closed, what should you do?

After a bit of a lull, Lloyds Bank has sent out what is probably the final batch of letters to holders of the legacy Lloyds Avios Rewards credit cards.  The cards close 60 days after your letter was dated.  

The Lloyds Avios Rewards American Express and Mastercard package will be replaced with a new Lloyds Avios Rewards Mastercard.  There will be no American Express element.

What is best replacement for the Lloyds Avios Rewards Amex card? 

I thought I’d run through your options.

In summary, this is what will happen when your card is switched to the new Mastercard:

• the upgrade voucher is dead (you will be allowed to earn one for your current card year)
• there will no longer be an annual fee, saving £24
• there will be foreign exchange fees of 3%

This is the earnings rate on the new Lloyds Avios Rewards Mastercard:

0.4 Avios per £1 you spend in the UK

0.8 Avios per £1 you spend outside the UK

0.4 Avios per £1 transferred on a balance transfer

Because the Mastercard element of the old Avios Rewards cards was so poor, this actually represents an improvement.  You currently get 0.2 Avios per £1 on the Mastercard in the UK and 0.4 Avios per £1 elsewhere.

The balance transfer option is a great deal when Lloyds runs its occasional ‘no fee’ promotions.  You move as much money as you can, pay it off the same day and pocket a big pile of Avios!

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.

Will the new free ‘Mastercard only’ Lloyds Avios Rewards card open to new applicants?

It isn’t clear.  I asked Avios this last week and my contact said that he hadn’t heard of anything, so the answer looks like ‘No’ in the medium term.

Now that avios.com is closed it is very possible that BA’s agreement with American Express forbids it from actively promoting any other credit card which directly earns Avios.

Is the Lloyds Avios Rewards card worth keeping as a Mastercard?

If you want to earn Avios, yes.  It is more generous than the Tesco Clubcard Mastercard (0.3 Avios per £1).  The HSBC Premier cards are better (0.5 Avios per £1 on the free card, 1 per £1 on the paid card) but HSBC Premier has tough income and asset criteria and requires you to have a current account with them.

There is also going to be a formal announcement soon about a partnership between Avios and NatWest / Royal Bank of Scotland MyRewards.  Holders of NatWest credit cards may or may not currently see Avios as a redemption option for their MyRewards credit.

However ….. if you are happy to walk away from Avios, you can’t beat the new Virgin Atlantic Mastercard.  The free card has a 5,000 mile bonus and offers a whopping 0.75 miles per £1 – almost double what the new Lloyds Avios card earns!  The annual fee card has a 15,000 mile bonus and offers 1.5 miles per £1.

What is the best replacement American Express card?

If you have been using the American Express element of the Lloyds Avios Rewards cards for your daily spending, you will need a replacement.  Assuming that you want to keep earning Avios, here are your FIVE options ranked in order of sign-up bonus:

American Express Platinum    Sign-up bonus:  30,000 Amex Membership Rewards points = 30,000 Avios

(£450 per year, earns 1 Avios per £1, my Amex Platinum review)

British Airways Premium Plus American Express   Sign-up bonus: 25,000 Avios

(£195 per year, earns 1.5 Avios per £1, representative APR 76.0% variable including £195 fee based on a notional £1200 credit limit, my BA Premium Plus review)

American Express Preferred Rewards Gold   Sign-up bonus:  20,000 Amex Membership Rewards points = 20,000 Avios

(free, earns 1 Avios per £1 with a 10000 point bonus for spending £15000 in a year, representative APR 57.6% variable including the annual fee (free in year 1) based on a notional £1,200 credit limit, my Amex Gold review)

Starwood SPG Amex   Sign-up bonus:  30,000 Marriott points = 10,000 Avios

(£75 per year, earns 1 Avios per £1 jumping to 1.25 Avios per £1 if you convert in chunks of 60,000 points, representative APR 39.7% variable including fee based on a notional £1200 credit limit, my Starwood Amex review)

Amex Rewards Credit Card   Sign-up bonus:  0 – 10,000 Amex Membership Rewards points = 0 – 10,000 Avios

(free, earns 1 Avios per £1, APR and sign-up bonus depends on which of the three versions you get, my Amex Rewards review)

In my view, these are the best two options:

British Airways Premium Plus American Express – the No 1 attraction is the 2-4-1 voucher that you receive for spending £10,000 each year. This is valid on Avios redemptions in ALL classes and saves you, for eg, 150,000 Avios on two Club World peak day tickets to San Francisco. Coupled with a high earnings rate, all serious Avios collectors should have one of these.

(If you travel solo, though, ignore it as the 2-4-1 has no value to you.  Similarly, if you cannot spend £10,000 per year on the Amex to trigger the voucher then look elsewhere and save £195.  You also need to be certain that you can generate enough Avios per year to use the 241 voucher effectively – although reading HFP will make that easier!)

American Express Preferred Rewards Gold – this card offers the most generous sign-up bonus for a free card.  You receive 20,000 Amex points for signing up (=20,000 Avios) and there is no fee for Year 1 (£140 thereafter).  You also receive two Lounge Club airport lounge passes among other benefits.

These cards work well if you fall into a specific niche:

British Airways American Express – the free BA Amex has a decent (for a free card) rate of 1 Avios per £1. However, do not get this card if you are planning to spend the £20,000 required to earn the 2-4-1 voucher – this article explains why the free BA American Express card can be a bad deal.

American Express Platinum – you should consider applying for this card if you think you can get value from the travel benefits.  Focus on the 30,000 Avios sign-up bonus, the Priority Pass for airline lounge access, Eurostar lounge access, Marriott Bonvoy Gold, Hilton Honors Gold, Shangri-La Jade, Melia Rewards Gold and the Radisson Rewards Gold cards.  Many people find that they end up keeping the card despite their initial intentions because of the value of the travel insurance, lounge access and other perks.  For day to day spending, 1 point (= 1 Avios) per £1 is a bit of a joke considering the annual fee.

Starwood SPG American Express – the day-to-day earnings rate of 3 Marriott Bonvoy points (= 1 Avios) per £1 isn’t bad and you get the flexibility to convert to 40+ different airlines as well as using your points for Marriott hotels.  You also get an enhanced conversion rate of 1.25 Avios per £1 when you convert in chunks of 60,000 points.  The sign-up bonus is 30,000 points, which converts to 10,000 Avios.  The £75 annual fee is refunded pro-rata if you cancel.  For long term use, this card would be exceptional if it was free but the £75 fee curtails its value.  All cardholders get Marriott Bonvoy Silver Elite status.

Amex Rewards Credit Card – this is the only ‘free for life’ Amex card which earns Membership Rewards points.  You get 1 point per £1 and these convert 1:1 into Avios BUT you can also use them for other airline schemes or transfers to Hilton, Radisson and Marriott.  This card is better than the free British Airways American Express if you won’t spend £20,000 to trigger the 2-4-1 voucher because, whilst both are free and earn 1 Avios per £1, Amex Rewards gives you alternative reward options.  The downside of the Amex Rewards Credit Card is that holding it stops you getting a sign-up bonus if you take out an Amex Gold or Amex Platinum card.

British Airways has set up a special page on ba.com for Lloyds credit card holders – click here – although there isn’t much there at the moment.

---

Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

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 offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.