Jetsetters looking to maximise returns on their spending might want to consider using an airline credit card to accrue rewards.
Virgin Atlantic recently announced the launch of two new credit cards that accrue ‘Flying Club miles’ when you spend.
How far can you fly on airline cards?
With Virgin Atlantic’s new Reward card, you earn 0.75 miles for every £1 spent using the card. Virgin Atlantic’s Reward+ card, meanwhile, pays double at a rate of 1.5 miles per £1 spent, although it comes with a £160 annual fee.
As an example of where you can fly to in the US, 20,000 points gets you a return flight to destinations such as Boston and New York, 25,000 points earns a return flight to Atlanta or Miami, and 30,000 points gets you a return to Las Vegas or Los Angeles.
However, these point limits only apply to ‘off-peak’ times. Peak-time travel, such as school holidays and Christmas, significantly increase the thresholds to 40,000, 45,000 and 50,000 points, respectively.
Global destinations covered by the scheme include Delhi in India, Hong Kong in south-east Asia, and Johannesburg in South Africa.
In addition to earning air miles, you can unlock exclusive benefits, such as a free ticket for a companion when you book a flight, upgrades and lounge access, when you spend at least £20,000 a year on the Reward card and at least £10,000 on the Reward+. The interest rate on the Reward card is 22.9% APR and an eye-watering 63.9% APR for the Reward+.
By comparison, the British Airways American Express Credit Card offers one point for every £1 spent. As an example, earning 20,000 points would afford the equivalent of a return flight to Athens. The card offers an introductory bonus of 5,000 points if you spend £1,000 in your first three months. Like Virgin Atlantic’s Reward card, there’s no annual fee and it has an APR of 22.9%.
"You can unlock good benefits, such as a free ticket for a friend travelling with you"
In related news, Avios Group is closing its UK programme and transferring users into the British Airways Executive Club from May. This affects those who collect Avios through cards including Lloyds Avios and TSB Avios. However, you will still continue to be able to accrue and spend points as normal.
What other types of reward cards are available?
If the offer of upgrades and free flights does not entice you, there are other types of reward credit card you can consider.
For instance, users of the M&S Bank Reward Plus Credit Card earn two points for every £1 spent in M&S during the first year, then one point for every £1 thereafter. Cardholders also earn one point for every £5 spent elsewhere, plus £25 in vouchers on signing up. There is no annual fee. The interest rate is 18.9% APR.
An option for online shoppers is the Amazon Platinum credit card. It offers 1.5 Amazon reward points for each £2 you spend at Amazon, and one point for every £2 spent elsewhere. Once you have earned 1,000 reward points, a £15 gift voucher will be credited to your Amazon account. There is no annual fee and new customers will also receive a £10 Amazon gift voucher when they first sign up. The interest rate is 18.9% APR.
This card has an annual fee of £160, but spend £13,350 – the minimum needed to earn 20,000 points – and you’ll get a free flight to New York. While £13,350 may sound a lot, that’s about £1,112 a month. In comparison, you need to spend £26,667 annually on Virgin Atlantic’s regular Reward card to earn 20,000 points.