Which Virgin Atlantic card should replace your Lloyds Avios Rewards Mastercard?

As we covered on Wednesday, Lloyds Bank has announced that the Lloyds Avios Rewards Mastercard credit card will close at the end of May.

This card was OK for a non-American Express product. It earned 0.4 Avios per £1 for UK spending and 0.8 Avios per £1 on overseas spend.

If you are looking for a non-Amex replacement, there are only two real options for travel rewards. The first is the free IHG Rewards credit card, which earns a relatively weak 1 IHG Rewards point per £1.

The second option is one of the two Virgin Atlantic credit cards.

These are FAR more generous. In fact, they are THE most generous non-American Express credit cards available in the UK, whether you look at cashback or travel rewards.

If you want to maximise your non-Amex rewards, these are the cards for you. Full details are on the card website here.

In this article I want to run through the key benefits of both Virgin Atlantic credit cards side by side to help you decide which is most suitable.

A generous free card or an even more generous paid card

• You can choose between a free Virgin Atlantic Mastercard (no sign-up bonus) and a paid Mastercard (15,000 points sign-up bonus)

• The earning rates are EXCELLENT.  0.75 points per £1 on the free card and 1.5 points per £1 on the fee card.

• The Virgin credit cards come with a 2-4-1 voucher.  It is substantially more powerful than the British Airways American Express 2-4-1 voucher because the Virgin 2-4-1 can also be used on cash tickets.

• Solo travellers can choose, instead, to upgrade a flight by one class.  This applies to BOTH cash and points flights.  You can go from Premium to Upper Class (the best deal) or from Economy Classic / Economy Delight to Premium.

• The vouchers are valid for two years

• All Virgin Atlantic cardholders get free access to Virgin Money lounges around the UK

Before I go into the details, let’s state the obvious. For the first year, you might as well pay the £160 fee for the Reward+ card and bank the 15,000 bonus points. You will also benefit from earning 1.5 points per £1 on your spending.

After the first year, you can rethink.

Let’s look at the two cards in detail.

The FREE card – Virgin Atlantic Reward credit card

The representative APR is 26.9% variable.

As you can see from the picture above, the free Virgin Atlantic Reward credit card is pretty cool, as credit cards go.  There is NO information on the front.  No card number, no personal name (these are on the back) although there is the usual chip.  The card is coloured red on the edge which makes it stand out when you look into your wallet or card holder.

This is what you get (full details are on the Virgin Money website here)

• No annual fee
• No sign-up bonus
• 0.75 Virgin Points per £1 spent
• Double points on online or call centre bookings with Virgin Atlantic and Virgin Holidays
• Unlimited free access to Virgin Money lounges across the UK
• No foreign exchange fees on in-person transactions in Euro
• 0% interest for six months on balance transfers (3% fee)
• Spend £20,000 in a card year and select a 241 voucher, upgrade voucher or another reward – more on those below

You can apply for the FREE Virgin Atlantic Reward credit card here.

The fee card – Virgin Atlantic Reward+ credit card

The representative APR is 69.7% variable, including the annual fee.  The representative APR on purchases is 26.9% variable.

This card is even cooler to look at, in my view, than the free card.  Again, your name and your card number are printed on the back, giving an impressive looking piece of plastic.  The card is also coloured red on the edges.

This is what you get (full details are on the Virgin Money website here):

• £160 annual fee
• 15,000 Virgin Points as a sign-up bonus, triggered with your first purchase
• 1.5 Virgin Points per £1 spent
• Double points on online or call centre bookings with Virgin Atlantic and Virgin Holidays
• Unlimited free access to Virgin Money lounges across the UK
• No foreign exchange fees on in-person transactions in Euro
• 0% interest for six months on balance transfers (3% fee)
• Spend £10,000 in a card year and select a 241 voucher, upgrade voucher or another reward – more on those below

You can apply for the Virgin Atlantic Reward+ credit card here.

What can you do with your annual voucher?

Your reward is triggered IMMEDIATELY upon hitting the spending target.  The target is £20,000 in a card year for the free Virgin Atlantic Reward Credit card and £10,000 in a card year for the £160 Virgin Atlantic Reward+ credit card.

Annoyingly, vouchers do not show anywhere online.  The only sign that your voucher is available for use is a one-line entry in your Flying Club account statement along the lines of ‘Reward voucher – 0 points’.

You can choose one of the following options:

• A 2-4-1 voucher, valid for two years, for a Virgin Flying Club points redemption OR a Virgin Atlantic cash ticket, in Upper Class, Premium or Economy

• A return upgrade – on either a cash or points ticket – from Premium to Upper Class, or from Economy Delight/Classic to Premium.  You can either upgrade 1 x return flight if travelling alone or 2 x one-way legs of two return flights if travelling with someone else.

• A Virgin Clubhouse lounge pass (requires a same-day Virgin Atlantic, Delta, KLM or Air France flight)

There is small print:

• If you are a Red (no status) member, you need to pay 50% of the points for your 2nd ticket if you redeem your 2-4-1 voucher in Upper Class.  This means that, for Upper Class redemptions for Red members, it is effectively a ‘2 for 1.5’ voucher. For Economy or Premium redemptions, it is a genuine ‘2 for 1’.

• If you are a Gold member, you would receive two Clubhouse lounge passes instead on one if you chose that option

• Taxes and charges need to be paid on the ‘free’ ticket as part of your 2-4-1 booking

• Vouchers are valid for two years and you must fly the outbound leg of your trip before the expiry date

Reward seat availability is required to use the voucher.  This means:

• you can only upgrade a flight if there is a reward seat in the higher class (irrespective of whether you are upgrading a cash or a points ticket)

• you can only apply a 2-4-1 voucher to a cash booking if there is a reward seat available for the 2nd ‘free’ seat

The voucher benefits are substantially better now than they were before changes in August 2020.  You can now upgrade to Upper Class, you can now use the upgrade voucher on either cash or points tickets, and Red (base level) members can now redeem the 2-4-1 voucher in Upper Class.

If you usually travel on your own, the upgrade voucher is likely to suit you best. This can also be used by a couple to upgrade one leg per person on a return cash or reward flight.

Which Virgin Atlantic credit card is best for you?

As usual, there is no easy answer to this question.  In the short term, I would get the paid card to benefit from the 15,000 bonus points and higher earning rate of 1.5 points per £1.

After that, it really depends on how much you spend and how easy you find it to trigger the annual voucher.

The free Reward credit card has an excellent earnings rate of 0.75 Virgin Points per £1.  You won’t get better value from a free travel rewards card.

However, the Reward+ credit card is definitely worth considering long term, especially for higher spenders. Lower spenders may also find it worthwhile paying the fee in order to reduce the voucher target from £20,000 spend to £10,000.

There is one bit of small print to note. The number of points you can earn per month is capped by your credit limit. If your credit limit is £5,000 and you choose to spend £4,000, pay it off mid-month and then charge another £3,000 before month-end, you will only earn points on the first £5,000.

There are now lots more ways to spend small amounts of Virgin Points

The recent launch of the Virgin Red app has brought a lot of new ways to spend Virgin Points, especially if you don’t have a huge amount.

This article on Virgin Red has a few examples. If you want, you can now use Virgin Points for food and drink at Greggs! Higher up the scale, Virgin Red has a private suite at the AO Arena in Manchester where you can redeem for tickets to top concerts.

If travel remains your goal, Virgin Flying Club has added Air France and KLM flights for redemption.  This has added short haul options in Europe as well as the excellent Air France / KLM long-haul network.

You can read about how to redeem Virgin Flying Club points on Air France and KLM in this article.

If you need to top up your Virgin Points from the credit card, the good news is that you can also earn Virgin Flying Club points through transfers from other partners:

• American Express Membership Rewards from Amex Gold or The Platinum Card (1:1)

• Tesco Clubcard (1 point is 2.5 points)

• Heathrow Rewards (1:1)

• Transfers from hotel loyalty schemes

There are also lots of partner promotions which we write about on Head for Points.  You CAN build up a decent stock of points relatively easily – the ‘free for a year’ American Express Preferred Rewards Gold has a 20,000 point sign-up bonus which will convert into 20,000 Virgin Points.

Conclusion

From the perspective of day-to-day earning, the Virgin Atlantic credit cards are excellent.  They are the most valuable Visa or Mastercard travel cards on the market in terms of return.

The improvements to the credit card vouchers in 2020 make a SUBSTANTIAL difference to the value of the card.

Now that it isn’t just a 2-4-1 points voucher, the voucher is now a lot more relevant for:

• solo travellers, who can now use the voucher to upgrade a return cash or mileage flight from Premium to flat bed Upper Class

• ‘no status’ Red and mid tier Silver members of Virgin Flying Club, who can finally use the 2-4-1 voucher to redeem in Upper Class

• anyone who has a low points balance and who can now use their voucher to get a 2-4-1 or upgrade on a cash ticket

If you are a casual Virgin Flying Club collector, 0.75 points per £1 spent on the free card will see your balance move along.  However, you would get better value from paying £160 for one year for the Reward+ card to get the 15,000 points bonus and the 1.5 points per £1 spent.

You can apply for the FREE Virgin Atlantic Reward credit card (no bonus) here and the paid-for Virgin Atlantic Reward+ credit card (15,000 points bonus) here.

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. The site discusses products offered by lenders but is not a lender itself. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as an independent credit broker.