EXCLUSIVE: Big changes coming to your Lloyds Avios Rewards credit card

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I would like to claim that this story was the work of our crack team of investigative journalists, but I actually owe it to reader Jack. He posted it in the comments on Saturday night whilst I was on the way to the Hilton Honors Bastille gig with a note saying ‘erm, Rob, you should look at this’.

We have known for some time that the American Express element of the Lloyds Avios Rewards credit card was living on borrowed time. Amex has cancelled all of its licensing deals with other banks. The Lloyds Avios Rewards card was withdrawn from the market for new applicants a couple of months ago.

By mistake, I imagine, the terms and conditions of the new Lloyds Avios-earning credit card have been posted online. (EDIT: link removed as the document has been removed)

We believe that the new card will be called the Lloyds British Airways Mastercard.

This is what is going to happen:

The American Express element is dead. The card will be a pure Mastercard.

The upgrade voucher seems dead. It appears that you will no longer get an upgrade voucher for spending £7,000 per year on the card.

There may be no annual fee – it is not mentioned in the new T&Cs

You may start paying FX fees. There is no mention in the new T&Cs that they are waived.

Here are the earning rates for the new Lloyds British Airways Mastercard:

0.4 Avios per £1 spent in the UK

0.8 Avios per £1 spent outside the UK

0.4 Avios per £1 on balance transfers (but presumably there is a fee attached to these)

One implication of how the rules are written, although it isn’t fully clear, is that Avios will be earned in multiples of £5. Your actual earning will be less than 0.4 Avios per £1. Any purchase under £5 will earn nothing. All other purchases will be rounded down to the nearest £5.

(The other implication of the wording is that only your total monthly spending is rounded down to the nearest £5, which clearly makes no real difference to what you earn.)

Here is an interesting quirk:

Holders of a Club Lloyds current account will earn an extra 0.1 Avios per £1 (0.2 Avios per £1 for foreign transactions)

This takes you up to 0.5 Avios per £1 for UK spending and 1 Avios per £1 for foreign spending.

For this to kick in, you must have had a Club Lloyds current account for at least six months.

Going forward, with the closure of the Avios Travel Rewards Programme, you will manage your Lloyds credit card account via www.ba.com/lloyds. This page is not yet live.

When are these changes kicking in?

As the current Lloyds Avios Rewards cards are closed to new applicants, there is no doubt that these changes are for existing cardholders. I assume that you will receive an email shortly from Lloyds announcing the closing date for the existing cards.

What do I think of the changes?

Frankly, compared to the new Virgin Atlantic credit cards (details here) this will be a very poor product.

The free Virgin Mastercard offers 0.75 Virgin Atlantic miles per £1. Lloyds is offering you 0.4 Avios instead.

The paid Virgin Atlantic Mastercard offers a whopping 1.5 miles per £1, almost 4x what Lloyds is offering.

The Virgin cards also have the ‘241’ offer, albeit only in Economy unless you have Virgin status. The new Lloyds Avios Rewards credit cards appear to have nothing. The assumed loss of the upgrade voucher is particularly poor as this was a real boon, especially for solo travellers.

On the upside, assuming there is no annual fee, it will be more generous than the Tesco Clubcard Mastercard (which, note, currently offers 2400 Avios as a sign-up bonus via 1000 free Clubcard points). It was a little embarrassing that you earned more Avios on the FREE Tesco Clubcard Mastercard (0.3 Avios per £1) than on the £24 Lloyds Avios Rewards Mastercard (0.25 Avios per £1) …..

Of course, if you qualify for it, the HSBC Premier Mastercard (free to Premier current account holders) pays 0.5 Avios per £1. The HSBC Premier World Elite Mastercard offers 1 Avios per £1.

It is roughly equal to the free IHG Rewards Club Mastercard which gets you 1 IHG point per £1 which I value at 0.4p. I also value 0.4 Avios per £1 via Lloyds at 0.4p. The IHG card does give you Gold status in IHG Rewards Club as an extra perk, however.

For clarity ….

I can’t be 100% certain that the terms outlined above are fully correct. It is possible, for example, that the upgrade voucher may be retained but just isn’t mentioned in the terms and conditions …. but that would be odd. Similarly, it is possible that FX transactions will remain free. We need to wait for Lloyds to make the full announcement.

In case you’re wondering, I have no idea if Lloyds intends to open up the card to new applicants or not. Based on my recent conversations with Avios, it isn’t happening in the short term.

Want to earn more points from credit cards? – December 2021 update

If you are looking to apply for a new credit or charge card, here are our November 2021 recommendations based on the current sign-up bonus.

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the top current deals:

British Airways BA Amex American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending:

Barclaycard Select Cashback Credit Card

1% cashback and no annual fee Read our full review

Category

British Airways and Avios

This article is closed to new posts. Discussion continues in the HfP Forums.

Duncan Stevenson-Price says:

10 Jun10 June 11:08

That’s a real shame, but I suppose not too surprising. I only had the card for non-Sterling transactions as we did enough of them that the points were worthwhile. I have the Nationwide Select card for non-Sterling transactions, though it doesn’t have any cash back for those.

Interestingly I got a survey from Lloyds about the credit card asking what I use the card for and what features of it are important to me. Options included the no forex charges and Avios earning. This was very recently, so perhaps they’ve already made up their mind and are just trying to forecast the number of customers they’ll now lose?
Dirtyneedlebluesky says:

10 Jun10 June 11:11

Will be disappointed if the voucher & free FX fees are removed. These were a genuine benefit.

However after just falling back to Blue on BA it’s sounds like it could be perfect timing to start again with Virgin’s offering esp with the expanded options via KLM/Air France (and of course Delta) from Manchester.

I won’t miss BA!
Mr Dee says:

10 Jun10 June 11:25

Sad to see this go, the Lloyds upgrade voucher saved a few Avios, can’t see how they made much money seeing as they had 2 years interest free on the card and now thats ending they change it completely.
Andrew Petty says:

10 Jun10 June 11:45

We took out the Lloyds card as it was 0% on foreign purchases/spend. We ditched our Virgin and BA cards a while back once we had reached the qualifying spend, so it will be back to the market to see the best offers
Jon says:

10 Jun10 June 12:07

OT but kind of related to the LBG card… I’m looking to book a Melia Hotel in Spain for a family vacation. I signed up to Melia Rewards a few days ago (although haven’t got the 2000 welcome points yet), so will at least get some Melia points. When trying to book (via the official Melia website), it seems the only option is to pay in Euros. I don’t have the LBG card so won’t get any points/avios from paying in Euros. I’ll have to use my Santander Zero card. Does anyone know of a way to pay in advance in GBP (so I can use my normal Amex?)
oonagh cacioppo says:

10 Jun10 June 12:38

I presume 1.5 points with Virgin are Virgin Points not avios transferable to BA ? In my experience you can usually find a product available with Amex these days I hardly use my Lloyds at all so no real loss!
- TGLoyalty says:
  
  10 Jun10 June 13:03
  
  Nope not transferable without losing a hell of a lot of value
1DES1 says:

10 Jun10 June 12:42

O/T but no “bits” article today.

In the past two months I’ve gone a bit nuts applying for new credit cards, a) my partner referred me to Gold AMEX Charge; b) IHG Premium Card applied and received; c) HSBC Premier World Elite applied and received. I’ve also opened up an HSBC Premier account (with interest free £500 overdraft).

I’ve now just seen my Experien Credit Score and it’s gone from “Very Good/Good” to “Very Poor / 553” in the last 60 days (April to June’s update). This is a big decrease clearly in response to the above 3/4 applications in a short space of time (my own fault I know!).

When will my credit score recover? I always pay all balances off in full and never miss any payments on cards or bills etc.

For completeness, I currently hold the following:

1) BA Premium Plus Amex (£17k limit) – have banked 2-4-1 voucher already. My partner spends on supplementary card.
2) Amex Gold Charge Card – have banked sign on bonus for £2k spend. New, last two months.
3) IHG Standard Card (£1k limit) – historic, held for about a year or more.
4) IHG Premium Card (£1k limit) – new, last two months, for corporation tax payments due soon.
5) Loyds Avios MC/AMEX (£7.5k limit) – historic, I’ve held this since 2015.
6) HSBC World Elite MC (£7k limit) – new, last two months, for sign on bonus, £12k spend bonus and lounge access.
7) Hilton Honors Visa Barclaycard (£8k limit) – Historic, held for last 18 months. Used to trigger free night in Hilton. With Curve now being recharged via debit card I may spend £10k to trigger Gold Honors status.

My partner and I have high incomes, no dependents and have been building up our credit history since late 2013 (when we relocated to the UK).

I’m not due to churn my AMEX cards for another 6 months (i.e me referring my partner for them).

Any comments, as always, very much appreciated!

1DES1
- the real harry1 says:
  
  10 Jun10 June 12:55
  
  If all cards are properly managed by yourself, then once you stop taking out new cards, it’ll just be a couple of months before the credit record improves. You might also benefit by taking a temporary hit by closing down a card or 2 (this is negative at first) then waiting a couple of months, which would see a bounce back. Keeping a card for years & years seems to be very good for your record, so don’t close down your longest-standing cards, even if you don’t use them much. Don’t forget other stuff impacts such as mobile phone contracts. And I do hope you’re on the electoral roll? 🙂
  
  Just guessing here, but if you reduced your overall credit limit (ring up the card issuers if you can’t do it online) that might help. Eg why on earth would you need £17K on BAPP? I don’t think bigger is better.
  - the real harry1 says:
    
    10 Jun10 June 13:40
    
    The other thing to bear in mind is that a recently deteriorated credit score/ record is not a valid judgement on your probity or credit-worthiness, ie you shouldn’t take it personally. Each credit card issuer will have different ways of doing things, as mentioned below, it’s the decision from a card issuer that matters, not what Experian or the others reports back.
    
    MSE has a decent tool to assess how likely you are to be accepted by the main cards, given your current status.
    
    But sure – if you have an important credit decision coming up in (say) 6 months, you would play the game quite carefully. We have a couple of 30 month Purchases credit cards (you get free credit on say £5-10K for the agreed term) coming up for switch to new ones, I don’t want to queer the pitch for our applications in the autumn so will be going easy on new credit card applications now onwards.
    - the real harry1 says:
      
      10 Jun10 June 14:19
      
      Anybody wanting to take out a new mortgage, don’t go for new credit cards in the 4 months before you plan to apply 🙂
    - Genghis says:
      
      10 Jun10 June 17:40
      
      We took a six month break as didn’t want to risk anything. Got the rate we wanted. Now saving c£300 pcm.
- Alastair says:
  
  10 Jun10 June 13:00
  
  I shouldn’t worry about the scores too much – what counts is if you are accepted and only a lender will asses that. The actual score is proprietary to Experian and doesn’t really count for much – it is not like the American FICO system at all, but there is money to be made from selling these scores and subscriptions to the service.
  It is true that if you already hold a decent credit limit with a lender (say Amex) – they may be reluctant to give you another card, however often they will split the limit across the old and new card.
  In my personal experience, I’ve moved house a couple of times for work and always take that as an opportunity to review finances and check out the best deals, since I have to set up all the utilities etc anyway. I’ve recently done this and had no trouble setting up a new bank account, getting the Virgin card and changing a couple of Amex-es, and like you my Experian score has just dropped quite substantially, but it has not caused any issue.
- will says:
  
  10 Jun10 June 13:14
  
  A high limit granted on a card you have had for a long period of time is seen as a positive on a credit file in a lot of cases (ie long term availability of a large line of credit which is repaid).
  
  As long as you don’t hold large outstanding balances your score will improve over 3-6 months.
  
  As above though, your experian score is just a crude indication. I know people with great experian numbers who have applied for mortgages and had deep questions asked about why they have so many credit cards, and a good look into the history of the spend on those cards.
- Roberto says:
  
  10 Jun10 June 13:18
  
  I suggest you dont put your credit limits online.
  - shd says:
    
    10 Jun10 June 13:30
    
    Why not? Is this like not talking about your salary?
  - TGLoyalty says:
    
    10 Jun10 June 13:47
    
    It can be used by companies to confirm your identity.
- Jim says:
  
  10 Jun10 June 14:00
  
  Ha! Exactly the same issue
  I applied for the virgin premium card as well and amex platinum and SPG with a view of churning amex cards
  Credit plunged but after a few months went up
- Genghis says:
  
  10 Jun10 June 14:11
  
  How not to churn (IMO anyway). I’m not comfortable destroying my (albeit indicative) credit scores, yet we still apply for probably what, seven or so cards a year each. Just space things out a bit more.
- Daniel Evans says:
  
  10 Jun10 June 17:42
  
  Do not ask your credit card company to reduce your limits. That will make your score worse! Having access to credit is a positive on your file. If you ask for it to be reduced other companies won’t know why and will assume it was reduced for negative reasons. I’d close down cards you no longer use and wait a few months then apply with a little more restraint.
  - Rob says:
    
    10 Jun10 June 18:01
    
    There is a happy medium. You don’t want to spending near your limit because it makes you look squeezed. Having a £20k limit, which is MBNA’s typical number, on a card where you spend £2k per month is also stupid if you want to apply for other stuff.
RussellH says:

10 Jun10 June 13:00

By coincidence I cancelled yesterday both my Lloyds Amex which dates from 2007, (no fee, no upgrade voucher, full FX charges) as I had used it once in the last 18 months; and my Tesco Mastercard (taken out 18 months ago the last time they were giving 1000 CC points for taking out the card).
This article reminds me that I also have a LLoyds MCard linked to the Amex, which I have never, ever, used – I think it was one avios per £50 spent, or something ridiculous.
No attempts by either Tesco or LLoyds to make me think twice about cancelling – I did tell Tesco that I was concerned about the recent increase in charges, as “I had friends who had been charged an extra 3.99% on purchases”, thinking of recent Curve problems mentioned here (I do not have Curve) and the agent did not deny this.