I’VE just heard that my MBNA Virgin Atlantic credit card is going to be axed.
Can you tell me what will happen to the airline miles that I have already collected?
Which are the best credit cards for earning airline miles?Are there going to be restrictions on where and when I can spend them?
What other credit cards can I use to earn air miles once this card has been scrapped?
Jess James, London
Leah Milner replies: It’s very disappointing for frequent flyers that MBNA is ditching two of its popular air miles cards.
The MBNA Virgin Atlantic credit card, which is the one that you have, and also the MBNA American Airlines card.
The bank closed applications for all its airline cards last November, so the Emirates, Etihad and Lufthansa credit cards may be next to face the chop, although the bank remains tight-lipped about this.
It also won’t tell me me when the deadline for using the points is going to be, but it is probably a good idea to start thinking about how you would like to spend them to make sure they don’t go to waste.
Do you have a money problem that needs solving? Email Leah at Money@The-Sun.co.uk
An MBNA spokeswoman says: “There’s no immediate change for customers, who can continue using their cards and redeem miles as normal. As always, we’ll let customers know of any change.”
The changes come as banks have been cutting back the rewards they offer on credit cards partly because January’s ban on charging customers a fee to use their cards at the checkout has been so expensive for them.
The best alternative air miles credit cards
There could be more closures of airline credit cards or downgrade to how much you are able to earn.
If you want to make the most of what is currently available while the deals last, here are the best options according to MoneySavingExpert.com:
- Amex Preferred Rewards Gold 57.6 per cent APR – Apply here
Free 20,000 points when you spend £2,000 in the first three months. That’s enough for two short-haul return flights to Paris or Amsterdam, or one return to Rome with British Airways (plus taxes of around £35).
Can convert miles to all major schemes, plus lounge access at many airport. See the full list here.
The card has a £140 annual fee, but is fee-free in the first year, so set a calendar note to cancel the card if you don’t want to pay.
- BA Amex 22.9 per cent APR – Apply here
No fee. Bonus of 5,000 Avios if you spend £1,000 within three months. Free flight for plus one if you spend £20,000 in a year.
You can earn one point per £1 spent on the card.
The value of points when you spend them varies, but is typically between 1p and 2p.
- BA Premium Plus 76 per cent APR – Apply here
Get 25,000 point bonus when you spend £3,000 within three months. You also earn 1.5 Avios per £1 spent on the card.
Free flight for plus one if you spend £10,000 in a year.
But the big catch is that the the card comes with a £195 a year fee, so it will only work out as good value for money if you are a big spender.
- Virgin Atlantic Reward credit card 22.9 per cent APR – Apply here
Get 5,000 bonus Virgin miles if you spend anything on the card within 90 days.
Spend £20,000 in a year and you will can choose between a companion ticket in economy or a flight upgrade to premium.
You also earn 0.75 miles for every £1 spent on the card.
- The Virgin Atlantic Reward+ 63.9 per cent APR – Apply here
Get 15,000 bonus miles if you spend anything on the card within 90 days.
Spend £10,000 in a year you’ll earn an economy companion ticket or flight upgrade from economy to premium.
You also earn 1.5 miles per £1 spent on the card.
It comes with an annual £160 fee, so it’s only suitable for high spenders, as with the BA Premium Plus card above.
Act fast as rewards won’t be around forever
If you are thinking about applying for an airline credit card or any other card that gives you cashback or shopping rewards, it is a good idea to apply soon as banks have been steadily cutting back these deals.
Normally banks will stop offering cards to new customers first before taking away benefits from existing customers, so if you apply now you should still be able to enjoy the rewards for some time.
Rachel Springall, finance expert at Moneyfacts.co.uk says: “Clearly the writing is on the wall that these perks won’t be around forever.
“The credit card market has undergone so much change over the past few years, with providers weighing up whether they can sustain their rewards after the checkout fees ban.
“Existing customers would do well to make the most of any perks they have left and be sure to convert any points before they miss the boat and lose what they have accumulated.”
What you need to know before taking out a rewards credit card
REWARDS credit cards, such as those that allow you to earn airline miles, cashback or shopping vouchers, can be a great way to get extra perks for money you would spend anyway. But before you apply it is vital to keep in mind these points:
- It can been harder to qualify for a rewards credit card than some other more basic types of credit card. Making failed applications can damage your credit file so use an eligibility checker, such as this one from MoneySavingExpert.com to see how likely you are to be accepted before you apply.
- Make sure that you pay off your bill in full every month or the interest will quickly wipe out any rewards you earn.
- Set up a monthly direct debit to ensure that you never miss a payment.
- While American Express is accepted in many more places than it used to be, there are still some shops and restaurants that won’t let you pay with this type of card so make sure it’s not the only card in your wallet.
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