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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:

  • 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.

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Comments (44)

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

  • John T says:

    I’m a huge fan of Air Canada’s Aeroplan program and would love to be able to earn miles from a UK credit card there.

  • Colin MacKinnon says:

    Asda was my first loyalty credit card – 1% cash back, 2% in Asda vouchers?

    Then I discovered BMI!

  • Bagoly says:

    re second Positive, no longer true in Poland: Mbank M&M card closed last year, and Diners is closing at the end of next month.

  • aseftel says:

    I would guess UAE. It’s a very similar thesis to what you outlined, but with much thicker interchange and an expat consumer base that has a diverse set of existing relationships with *A carriers.

    • Rob says:

      That was my thought too but people keep telling me that getting cards is tough unless you back with the issuer.

  • Jonathan says:

    Do we know if it would operate similar style system to the Amex MR scheme, where you rack up a balance of points then redeem at your request ?
    This is one of getting around Lufthansa’s (and other carriers) hard policy of mileage expiration, only requesting a certain number of points being sent to a scheme then you’d have enough for your reward flight without worry of losing your balance

  • Thom says:

    I’d probably be more interested if it didn’t earn points, rather you qualified for Star Alliance benefits at spend thresholds: free seat selection, free extra bag when spend 1k, Star alliance silver at 5k, gold at 10k etc

    • Peter K says:

      You’d have to put at least another zero on the end of those 5k for silver and 10k for gold figures before they’d even consider it!

    • Dubious says:

      That sounds like a further march of the commoditisation of air travel, albeit in the frequent flyer realm.

  • Ian says:

    Ahhh the BMI Diamond Club! I travel to Canada a lot and prefer Air Canada’s product over BA’s, so would definitely be interested. Snag is that that almost all of my miles are now Avios so splitting my credit card earning doesn’t seem sensible… or is it?

    • Charles Martell says:

      I have about 550k Avios, 3nr 241 vouchers and I’, probably not far from a Barclays upgrade voucher. I’d be interested in a Star card just to diversify away from Oneworld. An issue I’ve always had with Star overall is it’s so complicated, some economy fare codes credit to some schemes but not others, the benefits are limited until you hit gold; it generally feels messier than the leading Oneworld products.

      • Dev says:

        OneWorld is simple to understand. You know that sapphire gets you Biz lounge without many restrictions (yes, I know Al Mourjan!) and Emerald gets you First Class ground privileges.

        On the earning side, you know your getting at least 25% miles and TP equivalents for even the cheapest economy and so forth without many restrictions (save for BAs IT issues and certain RJ Biz fares).

        The same cannot be said about Star! The only thing that would attract me is to this card is to build up a pot for a truly aspirational flight like SQ Suites or LH F, and even that depends on the earning rate. Otherwise I find Star a bit to complicated.

  • Alex Sm says:

    Wouldn’t it be better for Star Alliance to adopt a more universal “currency” across its airlines. The current array of earning rules and options is a positive shamble tbh…

    • James Harper says:

      I think you are right however trying to get any agreement on that would be like herding cats. For one, Singapore would be unlikely to go along with it. Unless you are a PPS member (status that can only be earned with them in f&c) they will treat you with the same contempt as any other passenger.

      *A F benefits seem to be reserved for the airline’s own scheme members and no one else gets near them.

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

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