Free or Fee Based Airline Credit Cards?

Fee or Free Airline Credit Cards

There are 2 main issuers of airline credit cards in the UK. This are Virgin Atlantic Mastercard and British Airways American Express, with a free and a fee based version of both. Before choosing which card to opt for, you should first analyse your spending, airline alliance and mileage goals. If your spend on the ‘card’ is not enough to gain sufficient miles to make it worth while, then a ‘rewards’ based card may prove more beneficial where you can exchange points for a broader range of rewards.

BA Amex Plus
British Airways American Express Premium Plus Credit Card

It does not make sense to have a Virgin Atlantic Mastercard if you only fly British Airways or the BA Amex card if you always fly Virgin. Other things to consider is that BA have a more extensive route portfolio, however Mastercard is more widely accepted.

Virgin Atlantic Rewards Mastercard
Virgin Atlantic Reward Mastercard

The Points Guru has done a comparison of the free and fee based airline credit card offerings from Virgin Atlantic and British Airways. The comparison is based on an assumed total spend of £12,000 per year, with £2,000 of this being spent on the card issuers airline.

Virgin Atlantic
Reward Card
Virgin Atlantic
Reward+ Card
British Airways
American Express
British
Airways
American
Express Premium
Plus
Fee Free £160 Free £195
Sign-up Bonus 5,000
(miles)
15,000
(miles)
5,000
(Avios)
25,000
(Avios)
Assumed spend (normal) £10,000 PA 7,5000
(miles)
15,000
(miles)
10,000
(Avios)
15,000
(Avios)
Assumed spend (airline) £2,000 PA 3,000
(miles)
6,000
(miles)
2,000
(Avios)
6,000
(Avios)
Total Miles / Avois 15,500 36,000 17,000 46,000
Points Value in £ 186 432 187 506
Value after Fee in £ 186 272 187 311
2 for 1 / Companion
Upgrade (Virgin)
No Yes No Yes

In the above example and even with the higher yearly fee, the British Airways American Express Premium Plus Card has a higher miles value after fee. Plus you will also have a 2 for 1 voucher. Virgin Atlantic Reward+ card is a close second on miles value, plus you have the option of a 2 for 1 or Upgrade voucher. See issues website for full T&C.

I have just recently signed up for the Virgin Atlantic Reward+ Mastercard, mainly as I wanted an alternative to American Express that I can win miles with use and that also has a good sign-up bonus. I use in place of my bank debit card and pay the card balance off each month. When travelling overseas, I will use my Rewards+ Mastercard via my Curve Card in order to be faced with foreign transaction frees.

When spending on a card in order to maximise miles, the card should be used in place of your debit card for as mush of you card spend as possible, however you should pay this off each month in order not to reduce the value of the points. If you are paying interest each month, then this could wipe out any gains from the mileage rewards. You should not fabricate spend in order to gain miles.

The above does not constitute financial advice. If you are unsure, please seek financial advice prior to enter into any credit agreements