Which airline credit card is best for long term spending?

Many of the credit card articles on Head for Points are focused on sign-up bonuses.  Get a card, spend the minimum required to trigger the bonus and potentially move on.

However, if you are a high to medium spender, the few thousand pounds of card spend required each year to hit your sign-up bonus targets is not a stretch.  You need to consider where to put the rest of your annual spend.

This article can help you.

All of these cards add a 3% foreign exchange fee so you might want to get a separate free credit card to use abroad.   

Unfortunately there are no travel rewards cards without a foreign exchange fee.  One option is to get a free card from Currensea. Currensea is a simple but clever idea. You pay abroad with your Currensea Mastercard debit card. Currensea translates the cost to Sterling with just a 0.5% fee (83% less than usual) and withdraws the money from your bank account. You can find out more by clicking here. Currensea is free so there is no risk in giving it a try.

This article was updated on 1st December 2021, and all of the information is correct as of that date. Ignore the original publication date shown.

Here are the results

For people without Virgin Flying Club elite status:

This analysis ignores the value of any sign-up bonus – I am looking for the best long-term solution.

Because this is quite a long article, I will give the results first. The maths is below if you want to look into how we got to these numbers.

• Winner – British Airways American Express Premium Plus – 10.7% back on first £10,000

• Runner-up – the Virgin Atlantic Reward+ Credit Card – 6.2% back on first £10,000

• Well behind – the free Virgin Atlantic Reward Credit Card – 4.0% back on first £20,000

• Bringing up the rear – the free British Airways American Express – 2.1% back on first £12,000

For people with Virgin Flying Club elite status:

If you have Silver or Gold status in Virgin Flying Club, however, the results are different because you get a better deal when using the 2-4-1 voucher:

• Winner – Virgin Atlantic Reward+ Credit Card – 12.0% back on first £10,000

• Runner-up – British Airways American Express Premium Plus – 10.7% back on first £10,000

• Well behind – the free Virgin Atlantic Reward Credit Card – 6.8% back on first £20,000

• Bringing up the rear – the free British Airways American Express – 2.1% back on first £12,000

How did we get to these numbers?

Our base assumption is that you want to redeem for a Business Class flight to San Francisco on a peak date.

If you don’t redeem in Business Class or tend to redeem for shorter flights (US East Coast, Middle East) then the maths will be different.

You need to make some assumptions, though, and I think this is a fair base case for a HfP reader.

The winner (if you don’t have Virgin elite status) – British Airways American Express Premium Plus card

This is not exactly a surprise.  After all, you voted the British Airways Premium Plus card your ‘Best UK Travel Rewards Credit Card’ in the 2019 Head for Points Awards.

Spend £10,000 on this card and you get a voucher which gives you two Avios redemption tickets (on BA planes) for the miles of one.  On a typical redemption (two Club World tickets to San Francisco on a peak day), this saves you 150,000 Avios points.

Based on my very conservative 0.8p per Avios point valuation, which is what they are worth if converted to Nectar points:

• the 2-4-1 voucher is ‘worth’ £1,200 (150,000 Avios saving x 0.8p), and
• you also earn 15,000 base Avios for spending £10,000 to trigger the voucher (worth £120 @ 0.8p), but
• you pay an annual fee of £250

The net benefit for spending £10,000 = £1,070 (£1,200 + £120 – £250) or 10.7% of spend.

Virgin Atlantic Reward+ Mastercard

The value of the annual voucher you earn from the Virgin Atlantic credit cards is very hard to value because:

• there are multiple ways of redeeming your annual voucher – for a 2-4-1, to upgrade a cash ticket or to upgrade a Virgin Points ticket

• members with no elite status in Virgin Flying Club get a poorer deal if they go for a 2-4-1

Spend £10,000 on this card and you can choose from:

• A 2-4-1 voucher, valid for two years, for a Virgin Flying Club redemption in any class
• A Virgin Clubhouse lounge pass (requires a same-day Virgin Atlantic, Delta, KLM or Air France flight)
• A return upgrade – on either a cash or points ticket – from Premium to Upper Class, or from Economy Delight / Classic to Premium (requires reward availability in the higher class)

There is a little bit of small print:

• If you are a Red (no status) member, you need to pay 50% of the points for your 2nd ticket if you redeem your 2-4-1 voucher in Upper Class.  This means that, for Upper Class redemptions for Red members, it is effectively a ‘2 for 1.5’ voucher.
• If you are a Gold member, you would receive two Clubhouse lounge passes instead of one if you chose that option

For obvious value reasons I am not looking at the Clubhouse lounge pass vouchers.

There are three ways you can redeem the vouchers. Let’s take a look at typical examples, using the same San Francisco redemption that I used for the British Airways American Express Premium Plus example:

Let’s assume you use the 2-4-1 voucher to fly to San Francisco in Upper Class on a peak day (ideal for couples):

Based on a conservative valuation of 0.8p per Virgin Point, to match our Avios valuation:

• the 2-4-1 voucher is ‘worth’ £1,240 (155,000 Virgin Points saving x 0.8p) and
• you also earn 15,000 base Virgin Points for spending £10,000 to trigger the voucher (worth £120 @ 0.8p)

The net benefit for a Silver or Gold member spending £10,000 = £1,200 (£1,240 + £120 – £160) or 12.0% of spend.

However, a base Red member of Virgin Flying Club has to pay half of the points required for the second flight if it is in Upper Class. This means:

• the 2-4-1 voucher is ‘worth’ £612 (half of the value of a true 2-4-1, since a Red member has to pay half of the points needed if you redeem in Upper Class)

• you still earn £120 of base Virgin Points

The net benefit for a Red member spending £10,000 = £732 (£612 + £120 – £160) or 5.7% of spend.

Let’s assume you use the 2-4-1 voucher to upgrade to San Francisco in Upper Class on a peak day (ideal for solo travellers):

A return Upper Class flight to San Francisco is 155,000 Virgin Points. A return Premium ticket is 75,000 Virgin Points. The voucher saves you 80,000 Virgin Points.

Based on a conservative valuation of 0.8p per Virgin Point, to match our Avios valuation:

• the upgrade voucher is ‘worth’ £640 (80,000 Virgin Points saving x 0.8p) and
• you also earn 15,000 base Virgin Points for spending £10,000 to trigger the voucher (worth £120 @ 0.8p)

The net benefit for spending £10,000 = £600 (£640 + £120 – £160) or 6.0% of spend.

Let’s assume you use the 2-4-1 voucher to upgrade a CASH ticket to San Francisco in Upper Class on a peak day (ideal for solo travellers):

A unique feature of the Virgin Atlantic credit card annual voucher is that you can use it to upgrade a CASH ticket.

For example:

• you buy a Premium Economy flight to San Francisco for £800 in a sale

• you use the credit card voucher to upgrade it to Upper Class (there must be Virgin Points reward availability in Upper Class to do this) – let’s assume that this would cost £1,500 in a sale

The credit card voucher has saved you:

• £700 for the value of the upgrade to Upper Class, plus
• £120 of base points for spending £10,000 as per the calculation above

The net benefit for spending £10,000 = £660 (£700 + £120 – £160) or 6.6% of spend.

Which option is best?

As you can see from the maths above, if you have Silver or Gold status in Virgin Flying Club, the 2-4-1 redemption route is by far the most valuable.

However, if you are a base level Red member and only get ‘2 for 1.5’ on Upper Class redemptions using the voucher, the three options:

• a ‘2-4-1.5’ redemption in Upper Class
• upgrading a Premium ticket booked on points to Upper Class
• upgrading a Premium cash ticket booked on points to Upper Class

…. will all give you the same return of around 6.2%.

Virgin Atlantic Reward Mastercard

Spend £20,000 on this card and you get the same options that you get from the Reward+ card:

• A 2-4-1 voucher, valid for two years, for a Virgin Flying Club redemption in any class
• A Virgin Clubhouse lounge pass (requires a same-day Virgin Atlantic, Delta, KLM or Air France flight)
• A return upgrade – on either a cash or points ticket – from Premium to Upper Class, or from Economy Delight/Classic to Premium (requires reward availability in the higher class)

There is the same small print too:

• If you are a Red (no status) member, you need to pay 50% of the points for your 2nd ticket if you redeem your 2-4-1 voucher in Upper Class.  This means that, for Upper Class redemptions for Red members, it is effectively a ‘2 for 1.5’ voucher.
• If you are a Gold member, you would receive two Clubhouse lounge passes instead on one if you chose that option

There is an important point here. Unlike British Airways, the Virgin Atlantic credit card vouchers are identical across both cards. The only difference is the spending required to trigger them.

Let’s take a look at typical examples, using the same San Francisco example:

Let’s assume you use the 2-4-1 voucher to fly to San Francisco in Upper Class on a peak day (ideal for couples):

Based on a conservative valuation of 0.8p per Virgin Point, to match our Avios valuation:

• the 2-4-1 voucher is ‘worth’ £1,240 (155,000 Virgin Points saving x 0.8p), and
• you also earn 15,000 base Virgin Points for spending £20,000 to trigger the voucher (worth £120 @ 0.8p)

The net benefit for a Silver or Gold member spending £20,000 = £1,360 (£1,240 + £120) or 6.8% of spend.

However, a base Red member of Virgin Flying Club has to pay half of the points required for the second flight if it is in Upper Class. This means:

• the 2-4-1 voucher is ‘worth’ £612 (half of the value of a true 2-4-1, since a Red member has to pay half of the points needed if you redeem in Upper Class)

• you still earn £120 of base Virgin Points

The net benefit for a Red member spending £20,000 = £732 (£612 + £120) or 3.7% of spend.

Let’s assume you use the 2-4-1 voucher to upgrade to San Francisco in Upper Class on a peak day (ideal for solo travellers):

A return Upper Class flight to San Francisco is 155,000 Virgin Points. A return Premium ticket is 75,000 Virgin Points. The voucher saves you 80,000 Virgin Points.

Based on a conservative valuation of 0.8p per Virgin Point, to match our Avios valuation:

• the upgrade voucher is ‘worth’ £640 (80,000 Virgin Points saving x 0.8p), and
• you also earn 15,000 base Virgin Points for spending £20,000 to trigger the voucher (worth £120 @ 0.8p)

The net benefit for spending £20,000 = £760 (£640 + £120) or 3.8% of spend.

Let’s assume you use the 2-4-1 voucher to upgrade a CASH ticket to San Francisco in Upper Class on a peak day (ideal for solo travellers):

A unique feature of the Virgin Atlantic credit card annual spend voucher is that you can use it to upgrade a CASH ticket as well.

For example:

• you buy a Premium Economy flight to San Francisco for £800 in a sale

• you use the credit card voucher to upgrade it to Upper Class (there must be Virgin Points reward availability in Upper Class to do this) – let’s assume that this would cost £1,500 in a sale

The credit card voucher has saved you:

• £700 for the value of the upgrade to Upper Class
• £120 of base points for spending £20,000 as per the calculation above

The net benefit for spending £20,000 = £820 (£700 + £120) or 4.1% of spend.

Which option is best?

As you can see from the maths above, if you have Silver or Gold status in Virgin Flying Club, the 2-4-1 redemption route is by far the most valuable.

However, if you are a base level Red member and only get ‘2 for 1.5’ on Upper Class redemptions using the voucher, your three options:

• a ‘2-4-1.5’ redemption in Upper Class
• upgrading a Premium ticket booked on points to Upper Class
• upgrading a Premium cash ticket booked on points to Upper Class

…. will all give you the same return of around 4.0%.

Bringing up the rear – British Airways American Express card

This card used to be our runner-up. The September 2021 changes, however, stripped it of its value.

The standard, free, British Airways Amex gives you a 2-4-1 voucher when you spend £12,000, and a lower 1 mile per £1 on your spending.  

The snag is that the companion voucher is only valid in Economy. There is, in most cases, zero value in redeeming Avios for long-haul Economy flights. The taxes and charges destroy the value.

I am assuming that the very best use of the 2-4-1 voucher will be for an Economy flight in Europe using Reward Flight Saver. The maximum possible saving here is 21,500 Avios based on a long European flight to, say, Athens on a peak date.

Based on my very conservative 0.8p per Avios point valuation, which is what they are worth if converted to Nectar points:

• the 2-4-1 voucher is ‘worth’ a maximum of £172 (21,500 Avios saving x 0.8p), and
• you also earn 12,000 base Avios for spending £12,000 to trigger the voucher (worth £96 @ 0.8p)

The net benefit for spending £12,000 = £268 (£172 + £96) or 2.2% of spend.

Any serious Avios collector should switch to the British Airways Premium Plus Amex so you can redeem in Premium Economy, Business or First. This is where the real value sits.

Why are we only focused on airline cards?

In the past, this analysis has also included hotel credit cards.

With the closure of the IHG Rewards Premium Mastercard, however, there are no hotel credit cards which give a meaningful return for long-term spending.

We do not include the Marriott Bonvoy American Express card, because a Category 1-4 free night (worth £100) for spending £25,000 is frankly negligible.

We also exclude the 10,000 bonus points you receive for spending £15,000 per year on American Express Preferred Rewards Gold, because the value does not even cover the £140 annual fee.

I am happy to hear arguments for and against my views here.  Many of these rewards are subjectively valued, dependant on your travel patterns.

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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:

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.

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: