Will the UK be the test market for the new Star Alliance credit card?
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The Star Alliance airline grouping made a surprise announcement this week – it is to trial a Star Alliance-branded credit card in an undisclosed country this year.
The card will allow transfers to all 26 Star Alliance frequent flyer programmes. You would earn an intermediate currency – let’s call them ‘StarPoints’ for now – and then be able to transfer your StarPoints into the 26 individual schemes.
This would cover schemes such as Miles & More, Singapore Airlines KrisFlyer, Air Canada Aeroplan, United Airlines MileagePlus and many more. You would be able to arbitrage each trip, picking the scheme with the award chart which offered the lowest mileage and taxes for the flight you wanted.
Why would Star Alliance trial an alliance-wide credit card here?
There are good reasons and bad reasons why the United Kingdom would make a good test bed for a Star Alliance credit card.
On the positive side:
- following the closure of the Miles & More credit card in 2021, and the earlier closure of the United Airlines card, there are no UK credit cards issued by Star Alliance members. The nearest thing you have is the ability to transfer American Express Membership Rewards points to KrisFlyer and SAS, or transfer Marriott Bonvoy points earned from the Marriott Bonvoy American Express card. This means that Star Alliance won’t be treading on any toes.
- there is no single dominant Star Alliance carrier operating out of the UK. Launching a Star Alliance credit card in Scandinavia, Germany, Austria, Switzerland, Belgium, Poland or Portugal would directly compete with products offered by a strong incumbent Star Alliance airline.
- virtually every airline in Star Alliance flies to the UK. Each will have a few thousand core flyers who would be keen to get a Star Alliance branded credit card as the next best thing to having one issued by their preferred carrier
- the UK is, by a large margin, the most pro-credit card country in Europe. If Star Alliance was planning to trial its card in Europe, the UK is the obvious place.
On the negative side:
- the UK credit card market is very competitive. Whilst the Miles & More Mastercard was popular with those looking a generous non-Amex product, this gap has now been filled by the two Barclaycard Avios Mastercard cards. Is there space for a Star Alliance product?
- I would question how generous a Star Alliance branded product in Europe can be, because the alliance will effectively be buying miles off the individual carriers. The Barclaycard Avios card is there to drive a new generation of customers to Barclays, whilst the Virgin Atlantic credit cards are a true joint venture, with the airline sharing in FX and interest revenue. Assuming that Amex cannot be the issuer due to its BA relationship, Star Alliance may struggle to afford more than 0.5 miles per £1. If Star Alliance wants to make money off this product, it may need to look outside Europe where interchange fees are uncapped.
- one key attraction of the UK Miles & More credit card was that holding it stopped your Miles & More balance from expiring. This is unlikely to be a benefit of a UK Star Alliance credit card, even if you transferred the StarPoints you earned from it to Lufthansa. There is no certainty that ex-Miles & More cardholders would want this product.
Irrespective of whether the Star Alliance credit card does launch in the UK first, this is a potentially huge development for the industry. It opens up the possibility of a competing oneworld credit card, which would allow you to transfer miles into not just British Airways but also American Airlines AAdvantage and other ‘low charges’ programmes.
You can read more about Star’s plans in this Bloomberg article.
Our article on the best UK Star Alliance credit cards on the market at the moment is here. A broader article on the best Star Alliance frequent flyer programme for UK residents is here.
Want to earn more points from credit cards? – April 2023 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:
Barclaycard Avios Plus Mastercard
25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review
Barclaycard Avios Mastercard
5,000 Avios for signing up and an upgrade voucher for spending £20,000 Read our full review
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.
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and unbeatable travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and 1.5 points for every £1 you spend Read our full review
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:
American Express Business Platinum
40,000 points bonus and a £200 Amex Travel credit every year Read our full review
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review
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.