UPDATED post: Many people taking their first baby steps towards collecting airmiles make the mistake of opting for the free BA AMEX card. This card is officially known as the British Airways American Express Credit Card.
In this post, I explain why this is a seriously bad idea. The British Airways Premium Plus credit card does levy a mega annual charge of £195 but consider this an investment. An investment which will likely reward you ten times over if you use your perks efficiently.
Let’s start with the basics of the free BA AMEX card.
Free BA AMEX card
AVIOS reward rate
The BA AMEX card is entirely free and rewards cardholders with 1 AVIOS per £1 spend.
BA AMEX card sign up bonus
For free BA AMEX cardholders, the sign-up bonus is a paltry 5,000 points (or 6,000 if you use this referral link). To qualify for it you need to spend £1,000 within 3 months.
To qualify for a companion voucher, you need to spend £20,000 during the membership year. The companion voucher allows holders to redeem only AVIOS for one flight but book two flights. In other words, a buy one get one free.
Passengers still need to pay taxes and fees for two passengers but it is possible to fly business class for less than the cost of economy with this voucher. Why wouldn’t you change your spending habits to fly business but pay less than the cost of an economy ticket?
Now, here is why the free BA AMEX card is such a poor deal! Although the British Airways Premium Plus credit card charges £195 per year, you get a lot more.
AVIOS reward rate
The British Airways Premium Plus credit card has a higher earnings rate than the free BA AMEX card. Every £1 of non-BA spend earns 1.5 AVIOS. For spend on British Airways or BA holidays, this doubles to 3 AVIOS.
BA Premium Plus AMEX card sign up bonus
As if that’s not enough, the sign-up bonus is massive in comparison to the free BA Amex card. Once you spend a minimum of £3,000 in three months, you will earn 25,000 AVIOS (26,000 if you use this link). Now that’s a huge difference!
But, here’s where things get better still. You only need to spend £10,000 on the British Airways Premium Plus credit card to earn the companion ticket. That ticket is valid for 24 months whereas the free BA AMEX card companion voucher is only valid for 12 months.
Redeeming your companion ticket
This may seem like a minor point, but redemptions can be hard to come by on popular routes. You may need to book flights 355 days in advance to secure reward flights to some destinations. That gives you just 10 days to select your destination and redeem your companion ticket. It also provides little flexibility as to when you travel.
If you leave it until your voucher is due to expire, your chances of finding a flight will be slim. You have to travel the outbound leg before the 12 month period expires. This is often not realistic! I’ve heard too many stories of people who struggle to use their voucher because they earned it with the free BA AMEX card.
To earn this voucher and not use it, is an unforgivable travel hacking sin! You have just thrown away £20,000 of eligible spend!
Do the maths
Now that said, I know a £195 fee is offputting for many people. I know people who earn significant salaries and still baulk at this fee.
Here’s why it’s an investment though. Assume you spend £20,000 on both the free BA AMEX card and British Airways Premium Plus credit card and meet the minimum spend qualification, here’s how the two cards compare. This assumes that all spend is not British Airways.
|Free BA AMEX card
|BA Premium Plus card
|AVIOS earned for expenditure
|Sign up bonus (assuming you use my referral links)
|Companion voucher validity
You would earn an additional 30,000 AVIOS with the British Airways Premium Plus credit card,. Assuming an average value of 1p (although this varies enormously) this is worth £300 which is more than your annual fee.
However, let’s say your companion voucher expires because you cannot find availability within 12 months then you have potentially lost out on thousands of pounds of savings. For more evidence, read these posts on how I saved a fortune on flights to Vancouver and Seoul.
Do not redeem AVIOS for economy class
You may take the view that you don’t care about using AVIOS to fly business, but if so cancel your free BA AMEX card and sign up for a different reward card. You will never get value from this card if you only use AVIOS for short haul or economy flights. Taxes and fees account for much of the flight price and you still have to pay these.
The absolute only time it is worth redeeming for short haul or economy is if your companion voucher is about to expire. Better to get some return than no return!
But if you book business class and manage to save £5,000 on flights, your £195 investment provided a massive return. It looks like a bit of a bargain now, right?
What do you think?
If you have either card I’d love to know what you think, and what your experience has been? Feel free to have your say in the comments below.