Maximise your Avios, air miles and hotel points

When is it worth paying an annual fee for a miles and points credit card?

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I get numerous emails from Head for Points readers asking for advice on which miles and points credit card they should get.  These often come with the caveat “but I don’t want to pay a fee for a card”.

I don’t agree with this approach.  Let me explain why.

Most credit cards in the UK do not carry an annual fee.  It is very likely, before you became interested in miles and points, that you had never paid a fee for a credit card in your life.

When is it worth paying an annual fee for a miles and points credit card?

I can see why you wouldn’t want to. 

You know that the card company gets a cut from the retailer every time you buy something.  You know that they add a 3% foreign exchange fee whenever you spend abroad, and whenever you end up withdrawing some cash on it (which, however much you try to avoid it, always happens once or twice).  You may accidentally miss a payment date occasionally, or your direct debit bounces, and run up some interest.

Paying for the privilege of generating this revenue for the credit card company may seem wrong.

I think you need to look at it differently.  Forget that you are paying for a credit card.  Look at it as simply paying for the benefits offered.

When is it worth paying an annual fee for a miles and points credit card?

Taking the British Airways Premium Plus card as an example

Some people take one look at the £250 annual fee on the British Airways American Express Premium Plus credit card and are put off instantly.

Purely from the point of view of the sign-up bonus, being put off by the fee is a mistake.  The card is currently offering 25,000 Avios for signing up when you spend £3,000 within 90 days.  Many Head for Points readers would jump at the chance of buying 25,000 Avios for £250 which is basically what you are doing.

The fee becomes even more realistic when you look at the 2-4-1 voucher:

Would you pay £250 to buy a voucher which allowed you to get two Avios redemptions (BA planes only) for the miles of one? Especially if you got access to reward seats that non-cardholders can’t book?  This would save you 180,000 Avios on two Club World tickets to Tokyo for example.

This is clearly a ‘no brainer’ for anyone who understands the value of Avios.  180,000 Avios are worth at least £1,800 if used sensibly, and (180,000 x 0.8p) £1,440 if you turn then into Nectar points.  More importantly, if you wouldn’t otherwise be able to earn enough Avios for two Club World tickets to Tokyo, it lets you undertake a trip that would otherwise be impossible.

Following recent changes, the voucher also works well for a solo traveller – you save 50% on the Avios required for a ticket for one person. In our Tokyo example, you would save 90,000 Avios in Club World.

You need to spend £10,000 to trigger the voucher each year, of course, but you need to channel your credit card spend somewhere.

Compared to the free British Airways American Express card, the £250 fee also lets you earn 50% more Avios on every purchase and earn double Avios on BA spend. You also get a 2-4-1 voucher valid for two years rather than one year and usable in ALL classes rather than just Economy.

Virgin Atlantic credit cards

And some other examples …..

Here are some other examples where, if you treat the fee as paying for a benefits package, it makes sense:

Would you pay £160 per year for the right to upgrade two Virgin Atlantic economy redemptions to premium economy, or from premium economy to Upper Class, or to get a 2-4-1 voucher on economy or premium economy redemptions?  Especially if you also got 15,000 Virgin Flying Club miles in the first year for signing up?

When you put it like that, the Virgin Atlantic Reward+ Mastercard looks good value (you need to spend £10,000 to trigger the annual voucher).  This is before you factor in the excellent ‘1.5 miles per £1’ earning rate.

Would you pay £575 per year to get travel insurance for your family, car hire insurance, Hilton Gold, Marriott Gold, Radisson Rewards Gold, Melia Gold, Eurostar lounge access, Delta lounge access, two Priority Pass cards each admitting two people for free to 1300 airport lounges, £100 per year to spend in Harvey Nichols, £300 per year to spend in selected restaurants and exclusive benefits at luxury hotels including guaranteed 4pm check-out?  Especially if you got 60,000 Avios or other miles as a bonus in your first year, with a £200 Amex Travel credit thrown in for good measure?

This is clearly more of a ‘heavy hitters’ package, but the American Express Platinum charge card will give you all of the above. The ‘60,000 points + £200 travel credit’ bonus is only available to 25th October 2022.

American Express Amex Platinum card

Not all credit cards justify their fee …..

I don’t want to suggest that all fee-bearing miles and points cards justify the annual fee.

  • American Express Preferred Rewards Gold is harder to justify after the free first year.  You are paying £140 from year 2, with the main benefit being two free airport lounge passes (increased to four from October 2022) and 24 x £5 Deliveroo credits.  It might work if you spend enough to trigger the spending bonuses of up to 12,500 Membership Rewards points per year but otherwise I would consider it marginal.
  • The £240 annual fee for the Barclaycard Avios Plus Mastercard is trickier to justify after the first year if you are a big spender. The annual upgrade voucher is identical on the free card and the £240 card – the only difference is that the paid card triggers it at £10,000 of spend and the free card at £20,000 of spend. If you can hit £20,000 easily then the extra 0.5 Avios per £1 earned on your spending doesn’t offset the fee.
  • The Marriott Bonvoy American Express card has a £75 fee.  For the first year it is worth it for the 20,000 Marriott Bonvoy points sign-up bonus.  Earning just 2 Marriott Bonvoy points per £1, you need to a big spender to justify £75 for Year 2+.  The real value here is the 15 elite night credits you get each year – most people treat it as a cheap way of getting a head start on status renewal – but if you’re not chasing Gold, Platinum or Titanium Marriott status then this isn’t relevant.

These three examples show that not all fee-based cards necessarily offer long-term value.  However, if you can get your head around the concept of paying an annual fee, you will find that many miles and points card do offer value for money.

Mariott Bonvoy American Express credit card

Learn more about the credit cards mentioned above

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

The Platinum Card from American Express

60,000 points, £200 travel credit and an unbeatable set of travel benefits – for a fee Read our full review

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable card perk – the 2-4-1 voucher 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

Marriott Bonvoy American Express

20,000 bonus points and 15 elite night credits Read our full review


Want to earn more points from credit cards? – September 2022 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 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 card

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.

EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable card perk – the 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 & two airport lounge passes Read our full review

The Platinum Card from American Express

60,000 points, £200 travel credit and an unbeatable set of 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 sign-up bonus and a long list of travel benefits 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

50,000 points bonus until 2nd October – the most generous Avios Visa for a limited company 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.

Barclaycard Select Cashback credit card

1% cashback and no annual fee Read our full review

Comments (82)

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

  • tw33ty says:

    The marriot Amex is actually very good if you actually stay in Marriott hotels for the 6x points.
    I think I worked it out if you spend 3k in Marriott and pay via the bonvoy Amex card, it covers the fee vs just paying for it on an Amex card earning membership rewards then transferring those into bonvoy.

    Plus the bonvoy card has higher cash back offers for marriot than the standard offers when they pop, which when you get p2 to sign up for too, you get it twice.

    I’ve found the bonvoy card to be excellent value for only £75 a year and I’ve got many times the cost of the card out off it, (and that’s without factoring in the free night due to the spend needed for it)

    • Rob says:

      True. Marriott cashback deals this year have been better on their own card.

      If you are spending someone else’s money then using is abroad is great too – but the 3% FX fee wipes it for leisure travel.

      I paid for the HfP Summer party on my card – now that was a result 🙂

      • memesweeper says:

        Yowsers … can I ‘organise’ your next party Rob? Might be worth it for the points-back 🤣

  • Paul says:

    Do I need hotel status at time of booking (with cash) to get benefits, or is adding it after the booking the same?

  • Skywalker says:

    Just wondering about the travel insurance – if the Amex platinum card provides travel insurance for close family, assuming all other caveats are met, do they have to be travelling with you at the time if something occurs, or is it the case they can be insured from afar, if they are going elsewhere?

    Also, do you have to record those you wish to have insured at Amex (or underwriters) in some way? For example give name /DOB/address for those to be included on the policy?

    Thanks in advance

    • Rob says:

      Document is on the Plat application website. Don’t rely on our half remembered recollections!

    • memesweeper says:

      I checked my Amex Plat ICC insurance and that *did* cover my daughter travelling independently in Mexico earlier this year. HSBC Premier did *not* unless a parent was in tow.

      You should check the insurance small print, the exclusions on ‘included’ policies are significant and sometimes surprising — for instance, Plat ICC excludes cycling holidays!

  • tw33ty says:

    To be honest, I’d really like to get the Amex platinum card, but due to having other Amex cards that earn Amex membership reward points, it would exclude me from the reward from newly taking out the card, and I can’t be bothered going through the two year wilderness in order to be able to be eligible.

    I know I could get the card and just not get the intro points, but it would stick in my throat a fair bit.

  • George K says:

    There’s one thing that I’m not clear on when it comes to travel insurance but holding multiple cards. Amex Plat is obviously the king of travel insurance, but it offers less for baggage delays than, say, the Amex Prem Plus card. If you hold both cards and end up experiencing a delay, can you realistically choose which card you’d want to put your claim through, despite not having paid with it? The definition of Card Account seems to allow for this, but I’m not 100% clear…

    • Rob says:

      Yes, won’t be an issue. Most people have multiple sources of insurance anyway via various products and just pick and choose the most appropriate one when needed.

      • Steve says:

        On a similar theme, what is the approach for insurance and flights? On the basis that the Platinum card needs to be used for the insurance to apply, if you use a BA Amex to book a flight for the 3x points on a BA booking, does that mean in the event something happens and you need to make a claim, it cannot be claimed again the Amex insurance? That is what was once said (not necessarily here), in which case, if additional insurance were required for that transaction in isolation, does that not negate part of the insurance benefit? This is what is holding me off from taking the Platinum at the moment.

        • Rob says:

          Platinum card does NOT need to be used for the insurance to apply. This is why we keep telling people to read the document!

          Big stuff – you’re covered regardless
          Small stuff – you need to pay with ANY personal Amex card in the name of the Platinum cardholder for that part of the trip which leads to the claim (ie hotel if its lost items, flight if its delayed bags) if Amex is accepted

          • Steve says:

            Interesting, thanks. I was sure any purchase had to be made on the card, in order for the purchase to be covered by the card insurance, but thanks for the confirmation.

      • TimM says:

        Rob not true. All insurance companies require a disclosure of any other insurers in the event of a claim. You cannot pick and choose. They have to sort it out between them with their various exposures and excesses. Not to disclose other insurers would be fraud.

        • Rob says:

          I wouldn’t bother disclosing other sources of free insurance. I doubt most people even know they have cover via certain sources.

          • JDB says:

            It is an absolute requirement if asked whether your claim may be covered by any other insurer to disclose that – the principle of subrogation. Insurance is a contract of uberimma fides; if you fail to disclose something it can invalidate your claim and the insurance industry does hold a central register. In any event, why wouldn’t you say if asked?

          • JDB says:

            @Rob – obviously the other reason for this (and a central register) is to try and prevent people making duplicate claims for the same incident.

  • The Paw 🐾 says:

    Do the Mastercard World Elite benefits party justify the £240 fee for the paid Avios Barclaycard?

    (I think there was mention of upcoming article on Mastercard World Elite benefits but I haven’t seen it yet. I could Google it but I prefer to read Rob’s analysis)

    • Rob says:

      Will let you know when we get the official list!

      • Jan M says:

        I’ve been trying to find out about these. There is nothing on them anywhere. Binging on the free Apple TV. Some good shows but wasn’t going to pay for a fourth streaming service.

  • Gary says:

    Totally agree with value for money….. until…. kids arrived (well yes I guess it’s is a choice perhaps an inadvertent one) & the expectation 4 J seats fr LHR. So any card fees, however unwillingly and unconsciously, are just debited.

    • Rob says:

      There ARE now 4 guaranteed J seats per flight though. I never had this for the first 10 years of having two kids and we still managed to get four J or F seats.

  • pureshtuyot says:

    has the Virgin money current account offer of 20,000 virgin points been pulled?
    This article doesn’t show any end date https://www.headforpoints.com/2022/07/31/20000-virgin-points-virgin-money-m-current-account/
    the website now only shows a cashback offer

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

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