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Normally, I’m very vocal in saying that you should never apply for the British Airways American Express card. This post explains why you should avoid the Free BA Amex card but there is one occasion when it makes absolute sense to hold this card. First let me explain, why the card that has no annual fee is far from free.
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How much does the free BA Amex card really cost?
The BA Amex card is ‘free’ but it does cost you money! Now before you start scratching your head and shouting at your computer screen saying ‘What the hell do you mean?’ please hear me out. There are four ways in which this card costs you money.
Minimum spend for the companion ticket
You need to spend an extra £10,000 on your ‘free’ BA Amex card to secure a companion ticket. To earn this valuable reward, you have to spend a whopping £20,000 per annum. Even putting all my work expenses on my card, I would struggle with this!
It requires significant spend, and may encourage you to spend more than you planned just to ‘not miss out’.
Companion ticket validity
The free BA Amex card also costs you an extra year of validity on that companion ticket. If you wish to redeem for a popular route, this alone can wipe out any chance you have of a successful redemption.
Imagine spending £20,000 on a credit card only to then be unable to use the companion ticket because it is only valid for twelve months.
Extra AVIOS
Furthermore, it costs you an extra 10,000 AVIOS, as the earnings rate is just 1 per £1 rather than 1.5 per £1 on the BA Premium Card. Assuming a conservative 1p value per AVIOS, this alone covers £100 of your annual fee on the premium card.
Sign up bonus
The free BA Amex card also costs you dearly when you sign up. If you hit the minimum spend you earn a sign up bonus of just 4,000 points (5,000 with my referral). This fades into insignificance compared to the mammoth 25,000 (26,000 using this link) you earn on the Premium card.
That’s another £210 of value you have missed out on. That £195 fee doesn’t look so bad now, does it?
Comvinced yet?
For all these reasons, I normally tell people to avoid this card like the plague. Except, on one occasion…
When should you apply for the BA Amex card?
Let’s suppose, you applied for the BA premium card and satisfy the £10,000 annual spend. You bank your 26,000 bonus (remember to use this link to get the extra 1,000 points) and you earn 15,000 for the spend. You have earned 41,000 points already on this card.
More importantly, you now have a companion ticket that is valid for two years. That card attaches to your British Airways Executive Club until you use it. When you use it you must book using a British Airways American Express card.
But, it doesn’t have to be the same card!
Downgrade time
Once you bank the companion ticket, you can downgrade the premium card and obtain a refund of the pro-rata annual fee. I have just done this after achieveing the minimum spend in four months.
Ring American Express and ask to downgrade. They take you through a number of queries for the BA AMEX card application. This triggers the refund which is credited to your account within days. In my case, £132 was refunded. This is the only time you should hold this card!
Benefits
You retain the AVIOS you earned and the companion ticket. You then have two years to use this ticket making it extremely unlikely that you will fail to find a suitable redemption. In other words, the pressure is off!
Any future earnings on the BA Amex card will only earn 1 AVIOS per £1 but this isn’t an issue. Now you have secured the sign up bonus and the companion ticket from the BA Premium Card, it is time to move on. Sign up for the AMEX Gold and target another sign up bonus. This one is 22,000 (use this referral link or it will be 20,000) which compensates for the reduced earning rate.
You retain the BA Amex card because you need to redeem your companion ticket with a BA Amex card (free or premium). Once you book the flights, you can cancel the free BA Amex cardand wait six months before reapplying for the premium card to repeat this whole process.
What do you think?
In my opinion, this is the only time you should ever hold this card. I know not everyone agrees, so what do you think?
Hi Anne,
Is this still a valid tactic as it’s something I may be looking to do in the future. Have your heard of anyone else being successful doing it?
I actually discovered this from someone else so I’m not aware that it has changed. In fact I only about six months ago downgraded my card after securing my companion voucher as I didn’t want to pay the higher fees for the black card in the current environment and I got the partial refund.
Apologies for the late reply btw – it’s been a little difficult to motivate myself to provide TLC for my blog of late!!
The downgrade option is not recommended as Amex is known to claw back sign up bonuses if you downgrade within the first year. They see you as someone trying to scam them for their Sign Up Bonuses and can take adverse action.
That’s certainly not my experience. I’ve done this a number of times and that has never happened. More importantly their terms and conditions do not prevent it. Furthermore, i fail to see how they could claw back the points given that these transfer to the BA Executive club on a monthly basis. Inside Flyer also write about this with the same conclusion so I’d have to disagree with you.