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

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On Tuesday, I told you about some major changes to the little-known American Express Rewards Credit Card (ARCC).  Two of the three versions of the card have been closed to new applicants with immediate effect.

My full article on the Amex Rewards Credit Card changes is here.

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 WERE three versions of the card available:

a low interest rate version

a ‘0% interest on purchases’ version, and

a ‘standard’ version with the usual 22.9% interest rate and without a 0% offer on purchases

You can probably guess which two versions have been closed down.  Yes …. the one with the 9.9% interest rate and the one which offered 0% interest on purchases.

The one version which remains is the ‘standard’ one with a 5,000 Membership Rewards points bonus and a representative APR of 22.9% variable (click here).   You need to spend £2,000 within three months to receive the bonus.

For many people, there is only good reason to get this card. If you currently have an Amex Gold or Platinum card and want to cancel it but do not want to cash in your Membership Rewards points, this card is your answer.

Apply for the one remaining variant of the American Express Rewards Credit Card.  Once it is active, you can cancel your Gold charge or credit card or Platinum charge card safe in the knowledge that your Membership Rewards balance is safe.

The Amex Rewards Credit Card is more powerful than you think 

The main reason people get this card is to protect their Membership Rewards points if they are cancelling Gold or Platinum.  Rhys got one recently for that very reason.

However, when you look at the card, you realise something else.  ARCC is fundamentally better than the free, and hugely popular, British Airways American Express credit card.

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:

The 241 voucher on the free BA Amex 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 ……

If you don’t spend £10,000 per year on the free BA Amex credit card, you are better off with the American Express Rewards Credit Card.

Amex Rewards Credit Card

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 Bonvoy (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 Amex Rewards Credit 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 in the future.  You would have to cancel ARCC and wait 24 months.

Conclusion

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

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

If you spend between £10,000 and £20,000 on the free BA Amex card, you are making a huge mistake because you would be earning the 2-4-1 voucher if you upgraded to the Premium Plus version

If you spend under £10,000 on the free BA Amex, I believe that the Amex Rewards Credit Card offers a compelling alternative – just be careful that you don’t compromise your ability to get future sign-up bonuses

You can apply for the one remaining version of the American Express Rewards credit card here.

(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.

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Comments

  1. On a similar topic… I have redeemed a 241 which I got on my BAPP. I am no longer using the benefits of the BAPP having switched to HSBC Premier World Elite. Can I downgrade to the free BA card without messing up my existing 241 booking? Thanks!

  2. OT:
    Which is better: this is for (LHR-LBA) 2 adults,
    1. 15000 Avios + £ 1.00
    2. 11500 Avios + £ 21.00
    3. 8000 Avios + £ 31.00
    4. 5900 Avios + £ 61.00
    5. 5000 Avios + £ 71.00
    6. 4400 Avios + £ 81.00
    7. 10400 on Business Points + £ 82.88- club europe.
    For some reason economy not available using on business

    • Lady London says:

      Is this all in CE?
      At first glance, does not look like RFS prices?

      • 1-6 are economy. These is total for 2 people

        • If you put a value of 1p per Avios then 8,000 + £31 represents the best value in terms of least amount spent in the economy choices, Not sure about OnBusiness.

    • Lady London says:

      Intuitively for 2 adults, I’d go toe the 8,000 + £31.
      It also looks the closest to the old RFS values, which should be £17.50 each?

      PS No way, not ever, do not use OB points for this.
      Best use of OB points is in Y, when there isn’t any realistically attainable cash or rewards availability another way, not from the UK but from somewhere else where the ‘taxes’ are reasonable. As OB does not have RFS pricing. You always pay the same rate of true ‘taxes’ as you would for a cash ticket. Hence a lot of the time, cheaper from Eur to UK rather than the other way round.

      OB seems to price Business Class flights at 7x their cost of Y – as per Rob’s recent article – so normal avios better for those.

      I don’t suppose train would work? you may well find a cheap ticket… Goes against the grain a bit, I know 🙂

      • Thanks all.
        Lady London-we will be coming off a long haul flight arriving in to LHR so dont fancy a train. Now a realise it will be silly to use my OB points.

        Thanks again.

    • Harry T says:

      Option 3 is the best value if you think an Avios is worth 1p.

  3. Hi Guys, I started the application for the Low Rate rewards card but didn’t finish it, but Amex still emails me to complete the application till 10th Nov. do you think its worth it.. I have the Gold Credit card (since Dec 2018) and the Platinum Card (since Jun 2019), but i don’t have any plans to cancel either right now but since the Low Rate card is a free card do you think I should still apply? as I intend to apply for the BA Business card soon ( if I will be accepted.)
    Any advice will be greatly appreciated.

    • If you plan to use the low interest rate facility – and so it will save you quite a bit of money – then you may want to continue. If not (ie if you always clear your balance anyway) arguably you may want to keep your powder dry for the new BA Business card.

      • Many thanks Rob,
        I think that’s may best bet.. I just had a case of FOMO since i could technically still get the card…
        I always clear my balance but i would have loved to have the card in my sock drawer.

  4. C F Frost says:

    OT. The highly rewarding but highly, highly under-discussed NatWest / RBS Rewards to Avios conversion pathway appears to be no more. It has ceased to exist. Bereft of life.

    • What makes you think that? The page is still on the NatWest site.

      • C F Frost says:

        Yes, I saw that too. But log on to the rewards site proper (where you go to do the exchanging of points) and the option has vanished.

        Still, you can continue to use to transfer as cash. It was just that they had a very nice Avios conversion rate going on.

  5. Brian Moxey says:

    Are points earned at £1=1 on the American Express Rewards Credit Card transferred to Virgin Atlantic at 1pt = 1 Virgin mile/poit?

    • Brian Moxey says:

      I think I’ve found the answer. Yes, 1 point does transfer as 1 point to VA.

  6. Defcon5 says:

    Hi. I am halfway through my second year on the Gold Card and not far off hitting the spend bonus.
    Once this is hit, am I credited with the points immediately allowing me to cancel down the Gold Card and get a refund? Or are these credited at the end of the annual cycle? Cheers

  7. Maxine Chivers says:

    I have the BA free card now. In the past I had a Gold Card and got rid of it to have a black card. I have just used up most of my Avios. for my and my two children. I booked Miami to Antigua, Antigua to Tobago and the Port of Spain to Miami. I have just over 11,000 Avios left. We will go on Norwegian Air and have one flight to begin our trip with Ryan Air. It is lovely to combine low cost airlines to make a very good trip.

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