My heart is heavy – not just because not one, but both my back up credit cards have been stopped whilst on my travels – but also because it’s an end of an era with American Express pulling out of Lloyds Avios Rewards Credit card scheme…
Most people would advice against getting a credit card in fear of overspending, but for me getting a credit card in my early 20s was the turning point of my adulthood, and surprisingly made me meticulously responsible! I still remember that day in 2009 I had a meeting with a finance advisor at my local Lloyds bank in London, and told her about my travel plans to Brazil. She recommended the then Airmiles rewards cards (American Express and Master Card) which was later replaced by Avios in 2015, and the rest you could say, is how I managed to get around the world!
I used my credit cards mostly for purchasing flight tickets and expensive items (at the time I’d also moved into my apartment which I was slowly adding to over the years), and grocery shopping I knew I could pay the money back into my credit card straight away. I was meticulous at calculating what was, and what wasn’t worth using my credit card for… And rarely did I pay any late payment fees.
10 years later, I’m back in Brazil, and as I tried to pay for my groceries (tallying up if its worth using the credit card vs cash, and how many avios points I’ll earn!), my AmEx card got rejected. So I tried the Mastercard (less reward points but who’s counting when this could quickly become embarrassing). Rejected. Luckily I had some local currency so I paid for my shop and later called my bank. Initially I thought the cards didn’t go through because I hadn’t phoned my bank to tell them I was travelling. Then I double checked the expiry date of my cards – I was well within expiry. So what was it?
The advisor patiently explained the situation. That’s when it hit me, the letter I received last summer from my bank – the action has happened! I knew this day was coming, but I didn’t expect it to happen whilst I’m away, reply on my credit cards to get around… American Express has officially left the building.
I took to the web to find out, what exactly does this change mean for travellers and avios collectors like myself? Here’s what I discovered….
What do Avios Rewards cardholders need to know?
Lloyds Avios Rewards cardholders have recently been issued with a single Mastercard which replaced both existing American Express and Mater cards. The scheme will continue to be called Lloyds Avios Rewards. The new card isn’t available to new customers however, only for existing cardholders.
Here’s how it works:
- It pays 2 Avios points per £5 spent.
- Existing cardholders who’ve also had a Club Lloyds current account for six months or more will also earn an additional 1 Avios for every £10 spent.
- There’s no longer any annual fee.
- There’s no longer any free flight upgrade voucher.
- The new card will have a 2.95% foreign exchange fee.
If you already have an Avios account, any Avios balance you have will remain.
How does the new card compare with the old version?
The Lloyds Avios Rewards card previously offered customers both an Amex and a Mastercard attached to the account. The major benefit of this was that if a shop didn’t accept Amex you could still earn points on spending.
While the new Lloyds Avios Rewards card is fee-free, the rewards it offers are much less. Previously you could earn 6.25 Avios for every £5 spent on the Amex – this has dropped to just 2 Avios on the new Mastercard.
The new card also comes without any flight upgrade offer. The previous Lloyds Avios Rewards scheme offered a free flight upgrade voucher when you hit a £7,000 annual spend. The upgrade voucher could be used for a one category upgrade (except for Club to First), for either a return flight or two one-ways.
It’s worth noting that if you rarely used the Amex card, the new Mastercard offers a slightly better return than the previous Mastercard which was 0.25 Avios per £1 spent.
This change comes with a great knock-back for a budget, yet avid traveller like myself. It will take me twice – or more – as long to earn valuable points which help towards flights, and even at times I’ve been able to get reward flights where I haven’t paid anything (throwback to summer in Italy when I could spontaneously get ticket home after changing my mind to stay longer – twice!) I’ll definitely be looking into other airline reward cards in the near future…
Could you earn much more with other Avios cards?
If you’re a Lloyds Avios Rewards cardholder it’s worth checking if you can earn more Avios with another card. Here are our current top picks:
- The fee-free BA Amex (eligibility calc / apply*) gives 5,000 bonus Avios points if you spend £1,000 within three months and a free companion flight ticket if you spend £20,000 in a year. Plus you earn 1 Avios point per £1 spent on the card. (22.9% rep APR).
- Alternatively, the BA Premium Plus (eligibility calc / apply*) is an Amex which offers a much higher 25,000 Avios introductory bonus as long as you spend £3,000 within three months. You also earn 1.5 Avios per £1 spent on the card as well as a free companion flight ticket if you spend £10,000 in a year. However the card comes with a £195/year fee, so is only worth it for high spenders. (76% rep APR, incl fee)
- For those not looking for an airline credit card, the Amex Gold (eligibility calc / apply*) gives 10,000 bonus Avios if you spend £2,000 within the first three months, plus 1 Avios point for every £1 spent on the card. There’s a £140 annual fee, but it’s waived for the first year so you can cancel before year two if you don’t want to pay it. (57.6% rep APR incl fee).
As always, if you’re are thinking about applying for a credit card, first use our eligibility calculator to check your chances of acceptance without harming your creditworthiness. Always ensure you repay IN FULL or the rep APRs will dwarf the Avios gain. For full info, see Airline Credit Cards.
It’s worth noting all the above are American Express cards. If you don’t want to rely on an Amex or would prefer a Mastercard instead – which is more widely accepted – then Lloyds’ Avios card may be worth holding on to. If you aren’t too concerned about earning Avios as such, our Reward credit card guide includes a host of the best Mastercards which pay cashback or rewards.
What does Lloyds Bank say?
Lloyds Bank said in 2018; “American Express is discontinuing its existing licensing arrangements in the UK. Customers who currently hold an American Express credit card with Lloyds Bank will see their product replaced by a Lloyds Bank MasterCard.
“We are in the process of writing to those customers to communicate this change. In the meantime, customers can continue to use their Lloyds Bank American Express credit cards as normal.”
*info sourced from Money Saving Expert
*Please thoroughly research credit card options before getting one, and as always be responsible with your credit card and spending.
Do you use a rewards credit card? Let me know your thoughts!
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