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John Lewis and Waitrose Partnership Mastercard cuts cashback rate – what’s the best alternative?

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John Lewis and Waitrose have made a sharp cut to the cashback reward on their Partnership credit card.

Whilst it has nothing to do with miles and points, we mention the John Lewis / Waitrose Partnership credit card quite a bit on Head for Points.

This is because it is the best mainstream cashback (well, pseudo cashback) Visa or Mastercard credit card on the market.  It is always important to know what other rewards cards are out there, because miles and points from credit card spending are NOT free.  You could have put the same level of spending onto a cashback credit card instead.

John Lewis Partnership credit card

The John Lewis / Waitrose credit card had a lot going for it:

No annual fee

1% cashback at John Lewis and Waitrose

0.5% cashback on all other spending

Cashback paid in the form of John Lewis and Waitrose shopping vouchers, sent every four months in chunks of £5

You can see how a lot of reward cards don’t look too good compared to this.  The free IHG Rewards Club Mastercard, for example, earns 1 IHG Rewards Club point per £1 you spend.  However, IHG regularly sells points for 0.4p each, so you’d be better off having the John Lewis card and buying IHG points for cash when there is a promo on!

(On the upside, points earned from the IHG credit card count towards elite status.  You also get IHG Rewards Club Gold Elite status for holiding the card.)

No other retailer card came close to this.  Take a look at this HfP article which discussed how M&S, ASDA, HSBC, Sainsbury’s and Amazon had all cut their cashback rates to 0.1% to 0.25%.

The bad news is that John Lewis / Waitrose is drastically cutting the return on the card and moving it in line with its competitors.

From 4th September, the new earning rates will be:

1.25% cashback at John Lewis and Waitrose

0.25% cashback on all other spending

Unless you are spending disproportionately large sums in Waitrose and John Lewis versus all other shops, the returns on the card just got a lot worse.

That said, given the imposition of 0.3% interchange fees a couple of years ago, it was amazing that the card had held out at 0.5% cashback for so long.

It is difficult to recommend the card now.  Whilst 1.25% cashback at John Lewis and Waitrose is attractive, you can use American Express at both of these retailers.  You would still be better off using, say, a British Airways Premium Plus American Express card and earning 1.5 Avios per £1, albeit that card has an annual fee.

Virgin Atlantic reward credit card free

What is the best free Visa or Mastercard now?

If you’re looking for a free Visa or Mastercard to use at places where American Express is not accepted, the IHG Rewards Club card suddenly looks a lot better.  The Virgin Atlantic card is also worth a serious look.

With the IHG Rewards Club Mastercard, you’re getting:

1 IHG Rewards Club point (which I value at 0.4p) per £1 spent

Points count towards status

Gold Elite status in IHG Rewards Club

10,000 IHG Rewards Club points as a sign-up bonus (sign-up points do not count towards status)

No annual fee

Alternatively, you have the Virgin Atlantic Reward Mastercard:

0.75 Virgin Flying Club miles per £1 spent (which I value at 0.75p)

2-4-1 or upgrade voucher for spending £20,000 in a year

Free access to Virgin Money lounges across the UK

No annual fee

Note that there is no sign-up bonus on the free Virgin Atlantic credit card.  It actually makes more sense, in Year 1, to pay £160 for the Virgin Atlantic Reward+ credit card which comes with 15,000 Flying Club miles as a sign-up bonus, and earns 1.5 miles per £1 spent.  You can downgrade to the free card from Year 2.

Find out more

Our full review of the IHG Rewards Club Mastercard is here and you can apply here.

Our full review of the free Virgin Atlantic Reward Mastercard is here and you can apply here.

Our full review of the £160 Virgin Atlantic Reward+ Mastercard is here and you can apply here.

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Comments (46)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Tim says:
    16 Jul16 July 05:12

    Amex?!

  • William Kerr says:
    16 Jul16 July 05:17

    Rob worth mentioning that with the free IHG Mastercardcard and the paid-for version you can contact IHG customer services and get your IHG points automatically, on an on-going basis, converted to BA Avios, or another airline`s earning programme – (IHG publish an extensive list of other airline programmes). I arranged for my 20.000 IHG points on spending £500 in the first three months with the free card in this way, and it appears that any further earnings of IHG will be converted to Avios at a rate of 20.000 IHG points to 2000 Avios.

    • John says:
      16 Jul16 July 05:30

      Why would you do that??

    • Pablo says:
      16 Jul16 July 05:46

      You converted £80 worth of hotel points to £20 worth of avios. I’d hang my head in shame.

      • krys_k says:
        16 Jul16 July 07:02

        Hanging ones head in shame ought to be reserved for graver matters.

      • John says:
        16 Jul16 July 07:35

        To put it another way, the Tesco debit card is 3 times better than this IHG to Avios thing (except that Tesco rounds down each transaction)

      • Chrisasaurus says:
        16 Jul16 July 07:41

        I’d… Be a little disappointed, but I dont know as I’d feel shame over wasting £60 of my own money…

      • TGLoyalty says:
        16 Jul16 July 10:10

        Tbh I’m starting to view Hotel points as more valuable (not in £ but atleast in flexibility and use ability) than airline points because

        No cash required and far More availability for dates I actually want to use them on.

        • Harry T says:
          16 Jul16 July 10:36

          @TGLoyalty
          I am starting to think along similar lines. I had less use for Avios and VS miles from the regions anyway, but increasingly I’m seeing the value of diversifying across several hotels points schemes. They are a lot easier to spend and require no cash supplement, as you say. Plus Bonvoy can be converted into multiple air miles currencies anyway.

      • James says:
        16 Jul16 July 11:36

        A case or two of wine using avios points

        Drink ane be merry

    • Andrew says:
      16 Jul16 July 08:44

      Let’s all be a little nicer to William. As he’s probably gathered from the replies the conversion rate of ihg points to avios isn’t great. You’ll get far more value by using them directly for ihg stays. Generally the only reasons to convert them to avios are that you have such a small number that you can’t afford a hotel redemption or that you genuinely would never use them for a hotel (for whatever reason).

    • Joe says:
      16 Jul16 July 09:58

      Probably not mentioned because converting 20,000 IHP points into 2,000 Avios destroys value.
      IHP: 20000 x 0.4p = £80
      Avios: 2000 x 1p = £20

      • Callum says:
        16 Jul16 July 12:21

        With one caveat – someone who never stays in IHG properties (e.g. me) might get more use out of £20 of Avios than £80 of IHG stays.

        Not that it makes sense to do this beyond getting the sign up bonus (or even with the sign up bonus given how small it is when converted!).

    • Aaron says:
      16 Jul16 July 13:08

      What William is suggesting is not completely without logic or merit. There are perfectly valid reasons to convert IHG points to Avios. Some people simply have no need or use for hotel points, but may still need or have use for air miles.

      Also, more broadly, the IHG Rewards card can be useful as part of a card strategy (the non-Amex option in wallet) for those people who simply do not travel or choose to limit all travel for whatever reasons. And there can be reasons for such antipathy towards travel, even more so now post-COVID. In this scenario where the card use comes in is converting the IHG points into John Lewis/WR or Amazon vouchers. Depending on the amount of points being converted, this can be up to 0.20% back. Clearly if it were these vouchers you wanted you would get a slightly better earning rate (0.25%) putting spend through either of the JL/WR partnership card or the Amazon credit card, but you would at least retain the option of redeeming for hotel stays on those rare occasions where you needed to.

    • Catman says:
      17 Jul17 July 04:55

      I have the IHG premium card and this gets British Airways 10,000 points = 2,000 Avios which is still not great but obviously twice what you’re getting unless you have made a mistake

  • Steve says:
    16 Jul16 July 07:00

    Surprisingly John Lewis don’t seem to have contacted their card holders about this change yet

  • James says:
    16 Jul16 July 07:04

    On the Virgin card in the article you say it can be downgraded in Yr.2. I asked them last week and it can’t – it’s a new application and they said you will automatically get rejected then still need to go through that rigmarole of appealing the decision by post.

    • Rob says:
      16 Jul16 July 08:39

      That’s what I meant by ‘downgrading’!

    • Harry T says:
      16 Jul16 July 16:11

      Yes, I couldn’t be bothered with that protracted nonsense, as Virgin Money are fairly useless at the best time of times. Decided it wasn’t worth my time.

    • paul crafter says:
      16 Jul16 July 17:19

      Before ANYONE applies for the Virgin card – please read the trustpilot reviews of Virgin Money and Yorkshire / Clydesdale Bank who own it.
      Dealing with these people is akin to dealing with an organised crime network and they will not deliver on their ”promises”.

  • Spk says:
    16 Jul16 July 07:30

    Isn’t Amex cash back card a good option?

  • Andrew says:
    16 Jul16 July 08:09

    Disappointing.

    But still showing as double points for John Lewis Financial Services products paid for with a Partnership card. Not sure if that means 2p per £ or 2.5p per £ going forward though. They offer the best value for my home insurance, so it’s a bonus.

    Hopefully the various “In-store” offers return in due course, as they were always good earning opportunities to double up with.

  • RussellH says:
    16 Jul16 July 10:14

    I do not think I have set foot in John Lewis for almost 30 years. And we do not have Waitrose in the North West – we have Booths instead – nicer and the prices are not quite so outlandish.

    We were surprised though that the butcher in Waitrose Hexham was prepared to haggle on price. It was 3 Jan, though, so maybe he was still a bit hung over?
    🙂

    • Andy says:
      16 Jul16 July 13:58

      Preston has a full-size Waitrose, so they do occasionally cross-over in terms of territory with Booths but you’re right, they tend to be separate. There was talk a couple of years ago of Booths being sold to Waitrose as they were in trouble, though I haven’t heard any rumours of that for quite some time.

    • Andy says:
      16 Jul16 July 14:02

      I’ve just spotted that I replied to your Sainsburys comment yesterday. I wonder if there are any other Cumbrian HFP readers?

    • Chrisasaurus says:
      16 Jul16 July 20:03

      Prices in Booths are every bit as outlandish or at least they are in Ilkley!

  • cinereus says:
    16 Jul16 July 10:44

    A shame as this was by far one of the best cards going (definitely better than most points cards) especially with the way the vouchers worked.

    Surprised you don’t mention the Santander card as an alternative.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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