A couple of weeks ago, I highlighted the benefits of the free Hilton Honors Platinum Visa issued by Barclaycard. Specifically, the valuable free hotel night voucher available as a welcome bonus when applying for the card.
Summing up I said:
“Along with the Preferred Rewards Gold card from American Express, this is the card that I always recommend to readers who are just starting to dip a toe into the world of collecting airline miles and hotel points”.
Well, if you applied for the card on the back of that article you did well. Last Wednesday, a reader alerted me to the fact that this card had vanished from the Barclaycard website.
And that wasn’t to be the only credit card casualty that day.
Background – the barren state of the UK’s travel rewards credit card market
Back in November 2017, MBNA withdrew all of their co-branded airline credit cards without warning. This meant that you could no longer apply for any of the Virgin Black, Virgin White, Lufthansa, American Airlines, United Airlines, Emirates or Etihad credit cards in the UK.
While existing cardholders (I currently have the Virgin Black card) have been unaffected, it’s surely only a matter of time before those products as we know them are withdrawn entirely.
Bar the American Airlines card which had been relaunched not that long ago as a standalone Visa card, all of the above products were ‘double packs’. They featured an American Express card along with a Visa card. The earnings rate on these cards were generally pretty good, in fact, some of them were downright excellent.
The Virgin Black card earns 2 Flying Club miles per £1 spent on the Amex and 1 mile per £1 spent on its accompanying Visa card.
By comparison, if your main focus is Avios, you generally won’t find anything that can rival that earnings rate. Only the HSBC Premier World Elite MasterCard (reviewed here) offers 1 Avios per £1 on a non-Amex card but that has some tough eligibility criteria. Meanwhile, the Virgin card’s closest direct rival, the British Airways Premium Plus Card, (reviewed here) only offers 1.5 Avios per £1.
Why these products are being withdrawn
It would be impossible to fully elaborate on the various regulation changes and technicalities, but here is a brief summation. Feel free to add your comments below.
This mass withdrawal owed much to the EU interchange fee changes that came into force back in 2015.
These new regulations placed a cap of 0.3% on the amount that credit card issuers could charge retailers for transactions. Less revenue for issuers meant that generous miles/points earning rates on Visa and MasterCard credit card products were definitely destined for the chop.
This also affected any third-party Amex cards such as those offered by MBNA, Lloyds, Barclays and TSB (as part of their double packs). They were effectively all on borrowed time and Amex duly discontinued all third-party licencing agreements.
The demise of the Hilton Honors Visa by Barclaycard
Presumably, offering 2 Hilton points per £1 spent was seen as an overly generous earnings rate in the new 0.3% world. As a result, the Hilton card has been withdrawn from the Barclaycard website.
Barclaycard has given us the following statement:
Barclaycard and Hilton are collectively reviewing our Hilton Honors Platinum Credit Card proposition for new customers, and have removed the product from the market whilst we undertake this review. There is no impact to existing Hilton Platinum Credit Card holders.
It will be interesting to see what happens with this card if/when it reappears. Personally, I would like to see one of two options:
A genuine premium card
The US credit card market is vastly different to what we have here in the UK for many reasons. Nevertheless, I’d love to see what sort of traction a card like the Hilton Aspire Amex that recently launched in the US would get.
For perspective, that card costs $450 a year but offers:
- 100,000 Hilton Honors points welcome bonus when you spend $4,000 in the first three months of card membership
- $250 airline credit per year
- $250 credit to use at Hilton resorts each year
- Unlimited Priority Pass lounge visits
- Complimentary top-tier Hilton Diamond status
- Free weekend night certificate at any Hilton hotel worldwide just for holding the card.
- Second free night after you spend $60,000 in a card year.
Yes, it’s a hefty annual fee, but if used wisely, the value of the card benefits would far outweigh the cost.
The ‘IHG Premium’ route
To put it bluntly, the Hilton Visa offered no real incentive to spend on it beyond the £750 required to trigger the welcome bonus.
The exception being if you were using it to achieve Gold status – earned after spending £10,000 in a calendar year.
It surely would be far more constructive to offer something similar to the IHG Premium Card (reviewed here). That card offers a free night at any InterContinental or other IHG property worldwide after spending £10,000 in a year.
Moving to that sort of model would provide Hilton Visa cardholders with the much-needed impetus to keep the card in the long-term and channel some proper spending through it.
The Lloyds Avios Rewards cards (mostly) disappear too
This card was popular for its good earnings rate (1.25 Avios per £1 on the Amex), low annual fee and lack of foreign transaction fees – making it the only UK card that allowed you to earn airline miles abroad without incurring extra fees.
You can find my full review of the card here.
However, once the MBNA cards disappeared, it was clear that this card was going to be axed or at least revamped at some point.
Crucially, unlike the Hilton card, you CAN still apply for this card by phone or in-branch. This isn’t a technical error and has been confirmed by Lloyds (see below).
Again we reached out to Lloyds for comment:
“American Express is discontinuing its existing UK licensing arrangements. As a result, we are no longer accepting applications for American Express credit cards online. Applications in branch and by phone will continue to be accepted for a period”.
If you had your eye on this card, don’t wait. It isn’t clear how long those avenues for applications will be open for and though the card won’t survive long-term in its current form, existing cardholders should be OK for a brief period. If you feel that’s worth the hassle, apply now.
More radical changes to come?
While it’s clear that the UK credit card market is going through quite the shakeup, there may be more drastic changes to come.
A second more unexpected development in this interchange fee saga came when American Express was told they were to be to be restricted by the 0.3% rule changes even on their own directly issued co-branded credit cards. Those include the British Airways, Starwood and Nectar credit cards.
Broadly speaking, cards with an annual fee such as the BA Premium Plus and Starwood cards should be sustainable. However, you’d have to think we’re likely to see some form of restructuring with the free BA credit card which still earns a respectable 1 Avios per £1 spent.
While the demise of the Lloyds Avios Rewards card was anticipated, I didn’t expect the Hilton Visa to be pulled quite so abruptly.
The next few months will certainly be intriguing as we see what steps American Express takes, if any, to make its British Airways credit cards more sustainable in the long run. I would also hope to see a Virgin card, as well as various other airline cards, reemerge under a new issuer perhaps – there is a distinct lack of variety in the travel rewards credit card market at the moment.
Interesting times indeed…