We find out where HSBC Premier credit card holders actually spend their points

I’ve often wondered how many people actually redeem American Express Membership Rewards points for airline miles – the most valuable option – versus taking statement credit or shop vouchers.

I don’t have the answer to that question.

I DO have the answer to a very similar question though – how do HSBC Premier credit card holders spend their points?

The HSBC press office generously put together the numbers for an article in The Times, which I have been helping with. It gives some interesting insights.

As a reminder, if you sign up for free to HSBC’s Premier current account (requires £100,000 income or investments with HSBC) you are allowed to apply for the free Premier credit card and the paid-for Premier World Elite credit card.

The two HSBC credit cards earn as follows:

• the free HSBC Premier card, reviewed here, earns 1 HSBC point per £1 spent. Foreign currency spend earns double points. There is no sign-up bonus.
• the £290 HSBC Premier World Elite card, reviewed here, earns 3 HSBC points per £1 spent. Foreign currency spend earns 4 points per £1. There is a sign-up bonus of 40,000 points, worth 20,000 airline miles or hotel points.

Before I go on, you need to know a few things about how HSBC Premier credit card points work:

• you can convert into 12 airline and hotel schemes

• the conversion ratio is the same for all schemes (2:1) which means that the hotel options (IHG and Wyndham) are terrible value – no-one in their right mind believes 1 IHG point is worth anything near 1 Avios

• HSBC has been running annual conversion bonuses into Avios (20%-30%) which are rarely seen with other airline partners

• you can convert into shopping vouchers at 3:1, which is weak

This means that 1,000 HSBC Premier credit card points would get you:

• 500 Avios or other airline miles, worth £5ish
• 600 Avios if you wait until a 20% transfer bonus is running, worth £6ish
• 500 IHG or Wyndham points, worth £2ish
• £3.33 of shopping vouchers

For anyone confident of redeeming airline miles for 1p+ of value, it is a no-brainer.

Bearing all that in mind ….

How did HSBC Premier customers spend their points over the last 12 months?

This is how the redemptions were made (numbers do not sum to 100% due to rounding):

You can learn two things from this:

• people are not stupid – they have realised how poor the hotel redemptions are

• people with larger than average balances seem to be converting into airline miles, whilst people with smaller than average balances are taking shopping vouchers

This makes sense, because you need large balances to get the most value from airline miles (ie business class flights). If you only have a few thousand HSBC Premier points, shopping vouchers are probably a better deal.

I suspect that the link between larger balances and airline miles is even starker than the numbers show. This is because frequent travellers will use HSBC Premier points to top up accounts with different airlines to the level they need for a flight and may not be using all their points at once.

HSBC Premier points also transfer instantly, so there is no need to transfer to an airline before you need them.

Which airlines did HSBC customers transfer to?

This is how the airline miles were split by number of points moved:

Virgin Atlantic is NOT a HSBC Premier partner which is why it is missing from the list.

Qatar Airways ran an Avios transfer bonus recently from HSBC which will account for most of their 3% share.

The ‘Other’ list comprises Finnair Plus, Etihad Guest, EVA Air Infinity MileageLands, Flying Blue, Qantas Frequent Flyer and TAP Miles&Go.

I am surprised to see Flying Blue score so badly – not even high enough to break out of the ‘Others’ band – and equally surprised to see how well Emirates Skywards performed. Emirates Skywards is a shell of the programme it once was – surcharges have gone through the roof, availability is poor and mileage rates have shot up.

I hope you found this interesting. Thanks to George Nixon at The Times for his help and the HSBC press office for supplying the data.