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Lloyds Bank to slash Avios points on credit cards

Find out how you will be affected and the best alternative deals

Lloyds Bank is cutting the number of Avios points existing customers can earn on its reward credit cards and scrapping the free flight and upgrade incentives available on some of these deals.

If you have a Lloyds Bank Duo Avios, Premier Duo Avios, Avios Rewards or Premier Avios Rewards credit card, you will see the benefits reduced by next year – especially if you tend to use your American Express card for purchases.

Which? explains what’s changing, how it will impact you and the best alternative credit cards to explore.

What’s changing?

Currently, Avios reward customers get two credit cards to spend on – one Mastercard and one American Express – that are both linked to a single account.

The American Express currently offers a better Avios earning rate on spending than the Mastercard.

Under the changes, existing customers will be moved onto a Mastercard-only deal. While this means there will no longer be an annual fee for the card, rewards will also be greatly reduced.

Existing Avios cardholders will have a single card and only be able to earn two Avios for every £5 spent (or four  that when spending abroad) rather than up to 7.5 points for every £5 spent.

While some deals allow fee-free spending abroad, under the new scheme all will have a 2.95% foreign transaction fee.

In addition, certain incentives will be scrapped, like earning a free companion ticket or cabin upgrade. However, Lloyds Bank says it will give customers until the next anniversary of the account being opened to qualify for their last voucher.

The Lloyds Bank Duo Avios, Premier Duo Avios, Avios Rewards and Premier Avios Rewards credit cards are all affected by the changes. You can see what it means for you using our table.

Will you be better or worse off?

Lloyds Bank says the majority of customers will benefit from the change.

If you use your American Express card for less than 25% of your spending, the bank claims you will be better off on the new Mastercard rate for Avios points.

In addition, the annual fee across the reward cards (which is as high as £140 on the Premier Avios Reward Credit Card) will be removed to offset the reduction in point-earning power. Lloyds Bank says if you have paid a fee in the past 12 months, you’ll get a refund on a pro-rata basis.

However, the move will be a big blow for customers that regularly use the American Express card rather than the Mastercard to boost their Avios points.

The table below sets out how Avios points accumulation will change on a typical £1,000 spend split three different ways.

Credit card Points you can earn on £1,000 American Express spend now Points you can earn on £500 American Express and £500 Mastercard spend now Points you can earn on £250 American Express and £750 Mastercard spend now Points you will earn on £1,000 Mastercard spend after the changes  
Lloyds Bank Duo Avios 1,000 600 400 400
Lloyds Bank Premier Duo Avios 1,250 750 500 400
Lloyds Bank Avios Rewards 1,250 750 500 400
Lloyds Bank Premier Avios Rewards 1,500 900 600 400

When will the rewards change?

Lloyds Bank says it will be contacting customers about the changes over the next few months.

In the meantime, customers can continue to use their Lloyds Bank American Express credit cards as normal.

Lloyds Bank says existing customers will be given at least 60 days’ notice before they are moved onto the new product.

Customers also have the option to opt out of the new product if they’d prefer to close their account.

Why is Lloyds Bank making these changes?

A Lloyds Bank spokesperson told Which? American Express is discontinuing its existing licensing arrangements in the UK so it has had to overhaul its range.

Best alternative Avios reward cards

If you’re a Lloyds Avios reward credit card customer, you should check if you can earn more Avios points with another deal.

The fee-free British Airways American Express Credit Card offers 5,000 bonus Avios if you spend £1,000 within three months and you can earn an ongoing rate of one Avios per £1 spent on the card. You can also earn a free companion ticket if you spend £20,000 in a year. This deal has representative APR of 22.9%.

Alternatively, the British Airways Premium Plus Credit Card offers 25,000 bonus Avios points when you spend £3,000 within your first three months and an ongoing rate of 1.5 Avios per £1 spent. You can also earn a free companion flight ticket when you spend £10,000 in a year. However, the card comes with a £195 annual fee. This deal has representative APR of 76% including the fee.

But bear in mind that these two alternative deals will only give you an American Express card to spend on, which is not always accepted by retailers – so you should weigh up whether it’s worth giving up your Lloyds Bank Avios Mastercard in the long run.

You can compare more airline reward credit cards using Which? Money Compare.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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