I receive a steady stream of emails from people who have come across Tricks of the Trade and the world of loyalty programs in general. The question that I get asked more than any other is:
“What is the very best card that I should get to start off with?”
Once people stumble across the idea that flying first or business class isn’t something that will have to wait until retirement, they want to go all out straight away. However, making 10 credit card applications in a week is probably not a great idea.
So where do you start?
The Preferred Rewards Gold Credit card is the strongest all-round contender as your first stop for a dedicated travel rewards card.
Here’s a closer look at its various features and why it was the first card I ever applied for:
This card is currently offering 20,000 Membership Rewards (MR) points when you sign up and spend £2000 within your first 3 months of Card membership. For a ‘free’ card that is a tremendous bonus.
MR points convert at a 1:1 ratio to various frequent flyer programs including British Airways Avios, Virgin Atlantic Flying Club, Emirates Skywards and Etihad Guest miles. These points also transfer to hotel loyalty programs such as Hilton or can be cashed out for M&S or Amazon gift cards.
What are these points worth?
You have numerous options available when it comes to redeeming redeem your points:
- Airline Miles: Your 20,000 MR points are worth 20,000 British Airways Avios. That alone is enough miles for a return trip for 2 people to Paris, Amsterdam or Geneva!
- Hotel Points:
- MR points transfer at 1:2 ratio to Hilton. This means that your sign-up bonus is worth 40,000 Hilton Honors points. That is enough for a free night in the DoubleTree by Hilton Hotel London- Docklands Riverside for example.
- Your points also transfer at 1:3 ratio to Club Carlson. This means that your sign-up bonus is worth 60,000 Club Carlson points. That is enough for a free night at the Park Plaza Riverbank London for example.
- Gift cards: You could choose to cash out your points for a range of gift card options. 20,000 MR points can be exchanged for a £100 voucher at the likes of Amazon, M&S, Harrods or House of Fraser.
This card is free for your first year.
Thereafter the fee is £140. However, that fee will be refunded pro-rata if you chose to cancel the card at any point during the year. This is a feature unique to Amex. This means if you did decide to keep the card for the second year you need not consider the £140 fee a sunk cost.
You ought to also bear in mind that as this is a charge card, not a credit card, you have to pay off your card balance in full every month.
Other card benefits
- Free airport lounge passes – These can be used in any lounge that participates in the ‘Lounge Club’ network worldwide. Further visits can be accessed for a £15 charge thereafter.
- 10,000 bonus Membership Rewards points – after spending £15,000 on your card in a year. These will typically post to your account 3/4 weeks after your account renewal date.
- $75 in-hotel credit plus an upgrade – This offer can be redeemed multiple times at any of 350+ 4* & 5* participating hotels worldwide when booked via the Amex Travel service.
Day-to-day earnings rate
Cardholders will generally receive 1 MR point per £1 spent on their card. There are a couple of exceptions:
- Foreign currency transactions and airline transactions will earn a bonus point, for a total of 2 points per £1.
- Transactions made with Amex Travel will attract an additional bonus point for a total of 3 points per £1.
In terms of using this card for your day-to-day spending, you will have to analyse what are your key areas of spending are. If you are spending a decent amount directly with airlines or making regular foreign currency transactions, earning 2 MR points per £1 is an excellent return.
Am I eligible for the bonus?
You are eligible for the sign-up bonus UNLESS you hold or have cancelled one of the Amex Green, Gold or Platinum cards in the last 6 months.
You WILL still receive the sign-up bonus on this card if you hold/have held either of the BA Amex cards, SPG card, Platinum Cashback card, Nectar Card or any other Amex issued by Barclays, Lloyds, TSB or MBNA.
Amex will generally allow you to hold 2 of their charge card products and 2 of their credit card products at any one time. Platinum and Green are the other charge cards available while credit cards include the 2 BA cards and the Nectar credit card.
There is NO minimum income requirement to be eligible for any cards issued by American Express.
Remembering that this card has no fee for the first year, the current sign-up bonus is the most lucrative offer available on any free card in the UK.
In fact, if you are just dipping a toe into the whole loyalty points world this card is one of the ideal ways to make a start. With no fee to worry about during the first year and a large chunk of points, this is an easy method to get your first big redemption under your belt. A ‘free’ return trip to Paris or Amsterdam should definitely whet your appetite for more.
Even if you chose not to convert to airline miles or hotel points, this bonus is worth at least £100 if you cashed out your points for an Amazon or House of Fraser gift card. The variety of options when redeeming your points means there is something for everyone.
Disclaimer: The above information is intended solely as a helpful guide to the relevant card products on the market and their various features. You should always conduct your own research as the recommendations provided within may not be suitable for your personal financial requirements.