Forking out an annual fee on an Avios credit card can feel like a gamble. Is the potential for racking up travel rewards worth the yearly expense? While paying a fee might seem like a drawback compared to the free alternatives, there are situations where the benefits outweigh the costs.
In this blog, we’ll compare the pros and cons of no-fee Avios credit cards with annual fees to determine if it’s a smart investment.
BA Amex Avios Credit Card: Free Option
The BA Amex Credit Card is an excellent entry point for those hesitant about annual fees. It awards one Avios for every £1 spent and kick-starts your earnings with a bonus of 5,000 Avios after spending £2,000 within the first three months. The referral programme is another perk that can earn you Avios for each approved friend, with the exact amount varying from time to time.
Spend £15,000 within your membership year, and you’ll earn a Companion Voucher, which allows you to book a second ticket for a companion on the same flight and cabin without additional Avios or get a 50% reduction on Avios needed for a solo flight. Vouchers are redeemable when you book a British Airways, Iberia or Aer Lingus Reward Flight in Euro Traveller, World Traveller and Economy cabins only. As always, availability for reward flights and Companion Voucher bookings may vary, and additional taxes, fees, and carrier charges apply per person.
Key Card Details:
Representative example: based on a credit limit of £1,200 charged at 29.1% variable per annum for purchases. Representative 29.1% APR variable.
Purchase rate: 29.1% variable.
Cash advance APR: 36.3% annual. Cash advance fee: 3%.
Foreign transaction fee: 2.99%.
Late payment fee: £12. Returned payment fee: £12. Minimum payment due: £25.
Annual fee: £0.
Welcome offer: collect 5,000 bonus Avios when you spend £2,000 in your first three months of Cardmembership.
Earn rate: collect 1 Avios for every £1 spent on purchases.
Additional perks include no annual fee, the ability to add supplementary cardholders to boost Avios collection, and the option to redeem Avios for flight upgrades or part payment on flights.
BA Amex Avios Premium Credit Card: £300 Annual Fee
This card offers more exciting options. You earn 30,000 Avios by spending £6,000 in the first three months. You also receive Avios for every friend you refer who gets approved for the card, with the exact amount varying from time to time. Earnings accelerate with 1.5 Avios for every £1 spent on everyday purchases and a generous 3 Avios per £1 when you spend with British Airways or BA Holidays.
Spending £15,000 within a membership year earns you a Companion Voucher, which doubles the fun on your travels by allowing a companion to fly with you in the same cabin without additional Avios or offers a 50% discount on Avios needed for solo flights. The vouchers are redeemable for a reward flight on British Airways, Iberia, or Aer Lingus in any cabin.
For those eyeing a luxury experience, card members also gain exclusive access to additional Reward flight seats in Club World when using a Companion Voucher. Keep in mind that all reward bookings are subject to availability, and taxes, fees, and carrier charges will apply per person.
Key Card Details:
Representative example: based on a credit limit of £1,200 charged at 29.1% variable per annum for purchases. Fee of £300 per annum applies. Representative 135.7% APR variable.
Purchase rate: 29.1% variable.
Cash advance APR: 36.3% annual. Cash advance fee: 3%.
Foreign transaction fee: 2.99%.
Late payment fee: £12. Returned payment fee: £12. Minimum payment due: £25.
Annual fee: £300.
Welcome offer: collect 30,000 bonus Avios when you spend £6,000 in your first three months of Cardmembership.
Earn rate: collect 1.5 Avios for every £1 spent on purchases, and 3 Avios for every £1 spent with British Airways or BA Holidays.
Additional perks include travel accident and travel inconvenience insurance, the ability to add supplementary cardholders to boost Avios collection, access to additional Club World reward seats when using a Companion Voucher, and the option to redeem Avios for flight upgrades or part payment on flights.
Why Should You Opt for the Fee-Paying Version?
- The Sign-up Bonus: The sign-up bonus on the free card is 5,000 Avios, which is not enough to cover even the shortest Economy reward seat. In contrast, the 30,000 Avios bonus on the fee-paying card is often enough to cover the Avios cost of an off peak short haul Economy reward seat to destinations like Alicante, Barcelona, or Corfu, though taxes, fees and carrier charges will still apply. You get a strong head start just by earning the sign-up bonus.
- Avios Earning Rate: The fee-paying card allows you to collect Avios faster, earning more for every £1 spent. This means you can quickly build up your balance and secure seats on your desired flights. You earn 50% more Avios on all purchases and double Avios on spending with British Airways or BA Holidays.
- Annual Fee Justification: The sign-up bonus on the fee-paying card can offset the annual fee. With 30,000 Avios, often valued at around £300 using a typical 1p per Avios estimate, the bonus alone can go a long way towards covering the annual fee depending on how you redeem.
- Business Class Option: The Companion Voucher on the free card is earned after spending £15,000 a year and can only be used in Economy class. For those looking to use a Companion Voucher on long haul trips, such as to Singapore or Tokyo, being limited to Economy class might not offer the premium travel experience many Avios collectors want. Business Class redemptions can often provide stronger value per Avios.
- Validity: The Companion Voucher on the free card is only valid for one year, compared to two years with the fee-paying card, giving you more flexibility when planning trips.
If you’re serious about collecting Avios and using them for reward flights, the fee-paying card is the better choice.
Barclaycard Avios Credit Card: Free Option
The Barclaycard Avios Credit Card is a tempting gateway into the world of Avios without the sting of annual fees. You get 5,000 Avios right out of the gate if you spend £1,000 within the first three months. From there, every £1 of qualifying purchases gets you 1 Avios. If you hit £20,000 on your card within a year, you can get a cabin upgrade voucher for a British Airways Avios reward flight or opt for an additional 7,000 Avios.
Barclaycard Avios Plus Credit Card: £240 Annual Fee
A Barclaycard Avios Plus credit card gives you a 25,000 Avios bonus when you spend £3,000 in the first three months. From there, you can accumulate 1.5 Avios for every £1 spent on eligible purchases, with a monthly fee of £20. If you spend £10,000 on your card within a year, you can choose between a British Airways cabin upgrade voucher for an Avios reward flight or a 7,000 bonus Avios. You can also enjoy Airport Lounge Membership, with access to over 1,000 lounges worldwide at a reduced rate of £18.50 per person per visit.
The Upgrade Voucher
Interestingly, both the free and paid versions of the card offer the same Upgrade Voucher. This voucher lets you upgrade either one return Avios reward seat for a single traveller or two one-way Avios reward seats for two travellers. For example, suppose you want to fly from London to Singapore and back. You can use the voucher to book Business Class return seats while only paying the Avios cost for Premium Economy and the taxes for Business Class.
Typically, this would require up to 240,000 Avios and £600 in taxes. However, with the Upgrade Voucher, you would only need to spend 160,000 Avios and still pay the £600 taxes. Applying the value of 1p per Avios, this voucher saves you £800 on a Business Class ticket.
Why Pay for the Premium Cards?
- Sign-Up Bonus: In the first year, the free card offers a bonus of 5,000 Avios, which is insufficient to cover even the shortest haul Economy reward seat. However, the fee-paying card provides a bonus of 25,000 Avios, often enough to cover the Avios cost of an off-peak short-haul economy reward seat to destinations like Faro, Ibiza, or Krakow, though taxes, fees and carrier charges will still apply. You get a strong head start just by earning the sign-up bonus.
- Avios Earning Rate: The fee-paying card accumulates more Avios per pound spent than the free card. If you use your credit card frequently, the higher-earning rate of the paid card can be beneficial and make it a worthwhile option.
- Annual Fee Justification: The £240 annual fee for the Barclaycard Avios Plus Mastercard can be difficult to justify for heavy spenders after the first year. The free and fee-paying cards offer the same annual upgrade voucher, but the paid card activates this voucher with £10,000 in spending, while the free card requires £20,000. If you can quickly meet the £20,000 threshold, the additional 0.5 Avios per pound earned with the paid card may not justify the annual fee.
If you want to maximise your points collection, using both a Barclaycard and an Amex card could be a good strategy. However, if you prefer to pay fees for just one card, consider the following:
- Value of Perks: Decide which perk you value more — the companion or upgrade voucher. This will help you choose the card that best meets your needs.
- Acceptance: The Barclaycard Mastercard is more widely accepted than Amex. The Barclaycard Avios is the better option if you need a card for all your spending. Although acceptance issues with Amex have improved, many retailers still do not accept it.
- Annual Spending: Consider how much you spend annually. The Amex card could be more advantageous if your spending is between £15,000 and £20,000. Spending £15,000 on the Amex makes you eligible for a free Economy Class Companion Voucher, which can provide major savings if you travel with a friend or partner.
Ultimately, choosing the right Avios card depends on how you plan to use your points. The annual fee cards are worth considering if you want premium experiences and faster Avios collection. But if you're starting out with Avios, the free cards are an excellent place to begin. Either way, both offer options that fit different needs and spending habits.
Travelling with your Avios Credit Card
If you want to carry your Avios credit card with you while travelling, or simply have more control over your payments abroad, consider using a digital wallet to keep things simple, secure, and smart.
Tools like Apple Pay, Google Wallet, and Wise let you link your Avios credit card, debit cards, and even PayPal, so you can tap and pay wherever you are without carrying all your physical cards. This not only reduces the risk of loss or theft, but also keeps your financial details more secure.
For travellers who want to minimise fees on overseas transactions, Wise is a standout option. Wise offers a multi-currency account and debit card that lets you spend in over 40 currencies at the real exchange rate, with low and transparent fees. It's an ideal companion for your Avios credit card, especially for expenses that don't earn extra points or when you're spending in places that don't accept Amex or Mastercard.
By using your Avios credit card for eligible purchases to earn points, and Wise for lower-fee everyday spending abroad, you get the best of both worlds, maximised rewards and reduced travel costs.
Disclaimer: The information in this article is correct at the time of publishing. It is for informational and educational purposes only. It is not intended as a substitute for professional financial advice.
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