Maximise your Avios, air miles and hotel points

Why the free BA Amex credit card is now the best cashback card in Britain

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Back in January, Avios and Nectar unveiled their new partnership.

In a huge surprise, the two companies introduced two-way points transfers. This page of ba.com explains how Nectar transfers work.

Not only that, but the transfers were at a very generous rate for both parties:

  • 250 Avios gets you 400 Nectar points, which are worth £2 off your shopping at Sainsbury’s, Argos or eBay
  • 400 Nectar points get you 250 Avios, which HfP tends to value at around £2
Nectar Avios light

Following the launch of the partnership ….

  • the value of a Nectar point increased from 0.5p unless you have a very low valuation of an Avios point (and if you do have a low valuation of an Avios, you’re unlikely to be reading this)
  • Avios suddenly had a ‘floor’ value of 0.8p, since this was what you got by moving them to Nectar and redeeming for shopping credit. You would be a mug to redeem Avios for any other redemption which got you less than 0.8p per point.

This led to a big disruption to the established order. For example:

  • you’d be mad to redeem Avios for hotel bookings, car hire, seat selection fees or even, in almost all cases, ‘Part Pay With Avios’, since all of these get you less than 0.8p per point
  • most American Express Membership Rewards redemptions became irrelevant, because almost all of them get you less than 0.8p per point. You should transfer to Avios and into Nectar instead, guaranteeing the 0.8p valuation.

The free British Airways American Express has now become the UK’s best cashback credit card

Yes, weird but true.

If you know someone looking for a free cashback credit card, tell them to get a British Airways American Express card. The representative APR is 22.2% variable.

This is how the free BA Amex compares to the best cashback cards.

The UK’s best ‘pure’ free cashback credit card is American Express Platinum Cashback Everyday. The representative APR is 22.2% variable.

It pays, per calendar year:

  • 0.5% cashback on spend up to £5,000 (but 0% if your annual spend is under £3,000)
  • 1% cashback on spend above £5,000

The cashback comes as a lump sum at the year-end, added to your card balance.

Let’s compare this to the free British Airways American Express card. The free BA Amex pays:

  • 1 Avios per £1 spent, with 1 Avios converting into 1.6 Nectar points
HFP Amex American Express Platinum Cashback card

Compare the free BA Amex to the free Amex Platinum Cashback Everyday

This is what you would receive each year in cashback with different levels of spending. Remember that Cashback Everyday requires £3,000 of annual spending before it pays out.

  • £1,000 – £0 Cashback Everyday vs £8 BA Amex
  • £2,000 – £0 Cashback Everyday vs £16 BA Amex
  • £3,000 – £15 Cashback Everyday vs £24 BA Amex
  • £4,000 – £20 Cashback Everyday vs £32 BA Amex
  • £5,000 – £25 Cashback Everyday vs £40 BA Amex
  • £6,000 – £35 Cashback Everyday vs £48 BA Amex
  • £7,000 – £45 Cashback Everyday vs £56 BA Amex
  • £8,000 – £55 Cashback Everyday vs £64 BA Amex
  • £9,000 – £65 Cashback Everyday vs £72 BA Amex
  • £10,000 – £75 Cashback Everyday vs £80 BA Amex
  • £11,000 – £85 Cashback Everyday vs £88 BA Amex
  • £12,000 – £95 Cashback Everyday vs £96 BA Amex
  • £13,000 – £105 Cashback Everyday vs £104 BA Amex

You would need to spend £13,000 per year on the American Express Platinum Cashback Everyday card before you got a higher return than the Nectar points you’d earn from the free British Airways American Express card.

This assumes, of course, that you treat Nectar points as equivalent to cash. If you shop in Sainsbury’s then they definitely are as good as cash.

If you would need to go out of your way to use them, either at Sainsbury’s, Argos, eBay.co.uk or another partner, then you need to factor that in.

I would never deny that cash beats the equivalent value in vouchers, although you will get the occasional Nectar promotion where you can get more than 0.5p per point.

Compare the free BA Amex to the £25 Amex Platinum Cashback

American Express has a second cashback card, Platinum Cashback. Representative APR 27.3% variable including the £25 fee, 22.2% variable APR on purchases.

This carries a £25 annual fee but has a higher return:

  • 1% cashback on spend up to £10,000
  • 1.25% cashback on spend above £10,000

Amusingly, the free British Airways card is still more rewarding unless you are spending £12,000 per year. Here is the return, adjusting for the £25 annual fee on Platium Cashback:

  • £1,000 – £(15) Platinum Cashback vs £8 BA Amex
  • £2,000 – £(5) Platinum Cashback vs £16 BA Amex
  • £3,000 – £5 Platinum Cashback vs £24 BA Amex
  • £4,000 – £15 Platinum Cashback vs £32 BA Amex
  • £5,000 – £25 Platinum Cashback vs £40 BA Amex
  • £6,000 – £35 Platinum Cashback vs £48 BA Amex
  • £7,000 – £45 Platinum Cashback vs £56 BA Amex
  • £8,000 – £55 Platinum Cashback vs £64 BA Amex
  • £9,000 – £65 Platinum Cashback vs £72 BA Amex
  • £10,000 – £75 Platinum Cashback vs £80 BA Amex
  • £11,000 – £87.50 Platinum Cashback vs £88 BA Amex
  • £12,000 – £100 Platinum Cashback vs £96 BA Amex
  • £13,000 – £112.50 Platinum Cashback vs £104 BA Amex
HFP Amex American Express Nectar Card

How about the American Express Nectar credit card?

I know what you’re thinking:

“Surely the official Nectar American Express card earns you more from Nectar points than the free British Airways American Express card?”

Here’s the thing ….. it doesn’t. The Nectar American Express card has a £25 annual fee after the first year, which cuts into your return. Representative APR 27.3% variable including the £25 fee, 22.2% variable APR on purchases.

The Nectar American Express card earns you:

  • 2 Nectar points, worth 1p, for every £1 spent

This is how your returns stack up, adjusting for the £25 fee on Nectar American Express:

  • £1,000 – £(15) Nectar Amex vs £8 BA Amex
  • £2,000 – £(5) Nectar Amex vs £16 BA Amex
  • £3,000 – £5 Nectar Amex vs £24 BA Amex
  • £4,000 – £15 Nectar Amex vs £32 BA Amex
  • £5,000 – £25 Nectar Amex vs £40 BA Amex
  • £6,000 – £35 Nectar Amex vs £48 BA Amex
  • £7,000 – £45 Nectar Amex vs £56 BA Amex
  • £8,000 – £55 Nectar Amex vs £64 BA Amex
  • £9,000 – £65 Nectar Amex vs £72 BA Amex
  • £10,000 – £75 Nectar Amex vs £80 BA Amex
  • £11,000 – £85 Nectar Amex vs £88 BA Amex
  • £12,000 – £95 Nectar Amex vs £96 BA Amex
  • £13,000 – £105 Nectar Amex vs £104 BA Amex

Conclusion

It’s a weird old world, but – as the numbers above show – the free British Airways American Express credit card is now the best cashback credit card in Britain for most people.

To beat the return on the free BA Amex, assuming you transferred your Avios into Nectar points, you’d need to spend:

….. before it became a better deal.

Is anyone non-flyer really going to apply for the free BA Amex purely to use it as a cashback card? Probably not, but they should.

PS. Before anyone mentions it ….. I am aware that you can make the same case for the American Express Rewards Credit Card. This is free for life and earns 1 American Express Membership Rewards point per £1. These would convert 1:1 into Avios and then 1:1.6 into Nectar.

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

Nectar American Express

First year free and 20,000 points sign-up bonus – worth £100 or 12,500 Avios Read our full review

American Express Platinum Cashback

The UK’s most generous cashback credit card with a fee Read our full review

American Express Platinum Cashback Everyday

The UK’s most generous fee-free cashback credit card Read our full review

Comments (66)

  • ADS says:

    I think there’s also an argument that Nectar points should be valued closer to 1p per point – which would blow these calculations out of the water !

    Sainsburys Double Up promotions – able to activate vouchers in app as required

    Special Offers with partners – my favourite was using 1,000 nectar points for a Vue cinema ticket, which was worth about £15 in some London cinemas

    • Rob says:

      Yes, it works both ways. The Caffe Nero deals are also worth well over 0.5p when running.

      • Julian says:

        Easy for Cafe Nero to achieve bearing in mind their quite exorbitant prices for a bit of hot water and some coffee grains or a very mediocre sandwich. Tesco Meal Deal at £3 way better value if you don’t mind drinking a chilled decent quality coffee and a tasty sandwich and snack.

        • Rob says:

          The Nero sausage sandwiches are growing on me, to be honest (heated).

          As discussed earlier in the week, you’re really paying for 30 minutes rental of one of their sofas. Last time I checked Tesco did not offer this service for meal deal purchasers.

        • Doug M says:

          I have never had a worthwhile sandwich from Tesco. They’re poor quality with little filling.

  • Mikeact says:

    Decisions, Decisions …. which Amex card to go for…now the 2 year count down is rapidly approaching ?!

  • Anuj says:

    I can’t decide whether to put my spending on the free Amex rewards card or on the free BA Amex

    • Rob says:

      If you won’t hit 20k for the 241 there is NO reason to put it on the free BA Amex – except it stops you getting a bonus on another MR card (but you would then get a bonus on BAPP after 2 years). ARCC has far more flexibility for your points.

  • Economist_Nearby says:

    You really missed the point of this article.

  • Martin says:

    Nectar can be cash..
    when somethings faulty and returned you get the money back not Nectar points..

  • Scott says:

    I feel the article is misleading by focusing on the “free” aspect of the card. Better to get the Nectar Amex and cancel before second year, coupled with refer partner, or reapply a short while later. Never yet paid a fee for Nectar Amex nor Gold.

    • Aston100 says:

      Is there even a good reason to pay the second year fee for the Nectar Amex, rather than cancelling and starting again for free?

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