Long haul flight air miles - rewards - credit card

Boomel123

We are planning a long haul flight around the world Westwards mainly using Star Alliance. I have been looking at using a credit card to gain air miles / rewards and considering Amex. What has put me off is the annual fees that are required. We intend to use this for the flight and hotels, pay it all off immediately but potentially use the points later on (perhaps for a flight in Europe). I note that they include free travel insurance which is an added bonus. 

- Which card do people recommend 
- Do you have to pay the fees in order to use the points (perhaps a year later) 
- Are there any big caveats that I should be aware of 
- How quickly can I use the points, i.e. whilst I am on holiday can I use them for car hire 

Regards,

BOOMEL

Voyager2002

Amex offer a wide range of cards, some of which are fee-free. Obviously the cards with hefty fees offer more benefits, and in particular give you more points for the same level of spend.

You might consider the Preferred Rewards Gold card, which has no fee for the first year.

If you want to save the points after you cancel a card with a fee, you should take out another card, one that has no annual fee. Apply for this in good time, and so long as your new card account is operating before you close the old card, your points will not be affected.

See if you can find a card-holder to give you a referral code so that you both get extra points when you open the account.

WillPS

You need to work out which currencies you want/need to do the flights you desire, researching actual reward availability at whatever price point. Factor taxes too. Then compare to how quickly you'd get to the same place with a 1% cashback/reward credit card (with the considerable added benefit of being able to buy whatever cash fare you like with whatever airline).

Every card has a different arrangement in terms of how quickly the points hit your account - but car hire is unlikely to be a very strong redemption option.

DullGreyGuy

Boomel123 said:

We are planning a long haul flight around the world Westwards mainly using Star Alliance. I have been looking at using a credit card to gain air miles / rewards and considering Amex. What has put me off is the annual fees that are required. We intend to use this for the flight and hotels, pay it all off immediately but potentially use the points later on (perhaps for a flight in Europe). I note that they include free travel insurance which is an added bonus. 

- Which card do people recommend 
- Do you have to pay the fees in order to use the points (perhaps a year later) 
- Are there any big caveats that I should be aware of 
- How quickly can I use the points, i.e. whilst I am on holiday can I use them for car hire 

Regards,

BOOMEL

You can go fee free by choosing their blue Reward credit card... your points earning will be at the same rate but miss the "benefits" you get with the fee incurring cards which may not be of any benefit to you if you're not travelling etc. The sign up bonus is also lower but no fees at all 

The advantage of the MR cards like the Blue, Gold, Platinum and Centurion is that the points never expire so you can spend years collecting them if you need to. When you transfer them from MR to HiltonHonors or Avios etc then they following those scheme rules which may mean they expire if not used in two years. 

How long a transfer from MR to another scheme takes varies by the destination scheme... some happen within a business day some take up to three weeks; the system does clearly state how long it will take up to before you make the transfer. 

Alternatively you can use them to book travel directly with AmEx but they then have a 0.5p value which is fairly poor compared to what Airmiles can be worth. 

Just remember that not all schemes are equal and if using schemes you may still have to pay taxes and surcharges which for economy flights make up a lot of the price. You tend to get better value by using them in higher class cabins but with how UK taxes work that pushes up the cash component whereas with hotel schemes the opposite is often true, the basic room proportionally costs less points than a suite. 


You can do very well out of the cards, maybe not Centurion, but it requires you to understand airlines, hotels etc programmes and for you to be aligned to their partner brands. There have been many threads on here from people who didnt understand say BA's Avios and they've lost money by making bad decisions (eg buy Avios at 3p per mile then redeeming them at 0.5p per mile)

Boomel123

But I get charged for every foreign transaction? 2.99% I understand that I dont for debit cards but it does not have the same fraud protection? 

WillPS

Boomel123 said:

But I get charged for every foreign transaction? 2.99% I understand that I dont for debit cards but it does not have the same fraud protection? 

Yes, generally.

The Virgin Atlantic cards from Virgin Money are FX free in the eurozone only, but apart from that airline rewards credit cards all have an FX attached to them.

For FX free with rewards consider Barclaycard Rewards @ 0.25% or Santander Edge @ 1% (doubled to 2% in Y1, £15/month max rewards, £3/month fee, requires Santander current account). You can also investigate using Curve in conjunction with a non-Amex rewards card; Barclaycard Avios plays nicely with this for example.

ColdIron

Boomel123 said:

But I get charged for every foreign transaction? 2.99% I understand that I dont for debit cards but it does not have the same fraud protection? 

Cards like the AMEX Preferred Rewards Gold (free for year 1) are valuable for the sign up bonus but not for spending abroad. For that something like the Santander Edge CC gives you good Fx rates and 2% cashback (even on non-sterling purchases)

In short you should use multiple cards

WillPS

ColdIron said:

For that something like the Santander Edge CC gives you good Fx rates and 2% cashback (even on non-sterling purchases)

It's a great product, but it's important to note the 2% is a 1 year enhancement, the £3/month fee and the max £15 cashback - that latter point means you earn no cashback at all on spend above £750/month in Y1 and £1500/month afterwards. Could be a killer if the intended purpose is for high spend while travelling.

The effective cashback rate for Y1 on exactly £750 monthly spend deducting the £3 fee is 1.6%.
The effective cashback rate after Y1 on exactly £1500 monthly spend deducting the £3 fee is 0.8%.

These are both strong - but in Y1 at least you will likely need another card in addition to ensure every £ spent is earning maximally.

ColdIron

WillPS said:

ColdIron said:

For that something like the Santander Edge CC gives you good Fx rates and 2% cashback (even on non-sterling purchases)

It's a great product, but it's important to note the 2% is a 1 year enhancement, the £3/month fee and the max £15 cashback - that latter point means you earn no cashback at all on spend above £750/month in Y1 and £1500/month afterwards. Could be a killer if the intended purpose is for high spend while travelling.

I wouldn't call it a killer. As ever it's down to planning, multiple cards is an obvious solution and prudent whilst travelling

The effective cashback rate for Y1 on exactly £750 monthly spend deducting the £3 fee is 1.6%.
The effective cashback rate after Y1 on exactly £1500 monthly spend deducting the £3 fee is 0.8%.

Yes, after year 1 there are better cards. I cancelled mine and as far as I can see there is nothing to stop you applying again for another year. I was going to do that but chose the new Chase CC as stoozing is more profitable than cashback. Good Fx rates as well

These are both strong - but in Y1 at least you will likely need another card in addition to ensure every £ spent is earning maximally.

Indeed

ColdIron said:

In short you should use multiple cards

WillPS

Don't disagree with any of what you're saying @ColdIron - just elaborating on the limitations of the one and only option for spending you put forward especially given the OP's intended usecase.

Natwest Travel Reward CC is potentially a very useful part of the mix as it has 0 FX and 1% cashback on a fairly broad range of Travel related MCCs.

Mix those 2 products, along with a fallback option for transactions that don't qualify for 1% at Natwest and when Edge CC has already been exhausted - either Barclaycard Avios with Curve or one of the 0.25% cashback 0 FX players (Barclaycard and Virgin Money); that's a pretty strong set of cashback options.