Avios: the hobby that makes a profit. Do you do it?

[SussexLad]

About a year and a half ago, I started the air miles game. I wondered if anyone else does the same?

I have literally never spent a penny extra to get any avios but have enough for 2 people to go to NYC in business for like £2.

How I've done it is by diverting my work spend thru a personal amex card to earn points and offset the annual fee with the constant offers for money back and shop small (£5 back at small business's). In the first year I saved £150 on the offers and in the first half of my second year I've already made £140 in savings, equivalent to the fee. I use the amex gold which is free for the first year and £140 a year after that. Comes with travel insurance and 2 free airport lounges.

Do any of you do it? I can imagine there are quite a few people on here that spend half their life travelling domestically like me!

Here is a link to an article about the card I use.

Why Amex Gold is your ideal first American Express card

Amex Gold is the ideal first Amex card for UK residents - free in Year 1, a sign-up bonus worth £200, £120 of Deliveroo credit and FOUR free airport lounge passes.

www.headforpoints.com

 

[WestCoast]

I have had an Amex Gold for about three years now and have been a BA Executive Club member for about eight years now, now at the Silver tier. I racked up quite a lot of points flying Glasgow-Gatwick for work past couple of years and put most of my general spending and expenses on the Amex Gold. I actually just redeemed 50,000 Avios in the recent sale for a return trip to Oman next year for a holiday and to see family out there. I've always converted Amex Rewards into Avios as I don't think the other schemes like Virgin, KLM etc are valuable to me.

I think it's a great scheme but I'm not sure how useful it will be for me personally in the future given I won't be doing as much work travel. Also, a lot of direct fights from Scotland to places I want to go in Europe are with the likes of easyJet, Jet2 etc where you don't earn miles nor can you redeem them on those carriers. If I'm going somewhere there's a time factor of flying via Heathrow/Gatwick.

 

[Harpers Tate]

Amex Platinum here. Yes, it's seemingly very expensive, but

a) Covid aside I would normally do two or three overseas trips per year
b) You get automatic Mid-Tier membership in several hotel chains. At the very least that gets you extra loyalty points when you stay, and often some other benefits as well, like a free late checkout etc. Room upgrades: questionable whether you would pay for that separately, but if you did.......
c) Of the above, Hilton especially gives Gold members free breakfast daily for up to two people. If one were to pay for it, that represents typically about £30 value. Offset that against the annual fee
d) Airport lounges. Questionable whether you'd pay for that separately, but at the very least it saves the price of a snack and/or drinks. At airport retail prices, even a couple of coffees etc., isn't exactly trivial. Especially valuable if you are travelling with a low cost (read: nothing "free" onboard) carrier. Offset that against the annual fee.
e) Travel Insurance. I already have that elsewhere on better terms, so no value to me BUT they also give Rental Car insurance. So no need for the renter's own policy. That can save a couple of hundred GBP on a USA rental for a couple of weeks
f) Premium membership of a couple of car rental firms. Save 15% (IIRC) on rentals.
And so on.
g) As above, points for spending = AirMiles (in my case, they will go to Virgin).
h) and certain hotel schemes beyond the chains mentioned that give benefits, like free breakfast and room upgrades and in-house credit.
i) and, as above, offers for cashback. Recently 100% up to £100 at M&S, John Lewis, Waitrose etc. And others.

Non-Covid times aside - easily more than cover the annual fee. I may just scrape it this year as well with those 100% cashbacks.

(If anyone wants a referral - contact me; we both get a kickback).

 

[SussexLad]

I have had an Amex Gold for about three years now and have been a BA Executive Club member for about eight years now, now at the Silver tier. I racked up quite a lot of points flying Glasgow-Gatwick for work past couple of years and put most of my general spending and expenses on the Amex Gold. I actually just redeemed 50,000 Avios in the recent sale for a return trip to Oman next year for a holiday and to see family out there. I've always converted Amex Rewards into Avios as I don't think the other schemes like Virgin, KLM etc are valuable to me.

I think it's a great scheme but I'm not sure how useful it will be for me personally in the future given I won't be doing as much work travel. Also, a lot of direct fights from Scotland to places I want to go in Europe are with the likes of easyJet, Jet2 etc where you don't earn miles nor can you redeem them on those carriers. If I'm going somewhere there's a time factor of flying via Heathrow/Gatwick.

Pretty good haul their. I imagine a bit annoying about the lack of direct connectivity! A frequent complaint.

You can always ring up Amex and threaten to cancel. They gave me a 5k MR bonus for £1k spend in 3 months. Easy points and helps tip the balance in favour of keeping the card for the time being.

Amex Platinum here. Yes, it's seemingly very expensive, but

a) Covid aside I would normally do two or three overseas trips per year
b) You get automatic Mid-Tier membership in several hotel chains. At the very least that gets you extra loyalty points when you stay, and often some other benefits as well, like a free late checkout etc. Room upgrades: questionable whether you would pay for that separately, but if you did.......
c) Of the above, Hilton especially gives Gold members free breakfast daily for up to two people. If one were to pay for it, that represents typically about £30 value. Offset that against the annual fee
d) Airport lounges. Questionable whether you'd pay for that separately, but at the very least it saves the price of a snack and/or drinks. At airport retail prices, even a couple of coffees etc., isn't exactly trivial. Especially valuable if you are travelling with a low cost (read: nothing "free" onboard) carrier. Offset that against the annual fee.
e) Travel Insurance. I already have that elsewhere on better terms, so no value to me BUT they also give Rental Car insurance. So no need for the renter's own policy. That can save a couple of hundred GBP on a USA rental for a couple of weeks
f) Premium membership of a couple of car rental firms. Save 15% (IIRC) on rentals.
And so on.
g) As above, points for spending = AirMiles (in my case, they will go to Virgin).
h) and certain hotel schemes beyond the chains mentioned that give benefits, like free breakfast and room upgrades and in-house credit.
i) and, as above, offers for cashback. Recently 100% up to £100 at M&S, John Lewis, Waitrose etc. And others.

Non-Covid times aside - easily more than cover the annual fee. I may just scrape it this year as well with those 100% cashbacks.

(If anyone wants a referral - contact me; we both get a kickback).

Heard about the 100% cashback, very envious! As above ask Amex to see what you get.

Personally I could never justify platinum (at the moment anyway).

Did you hear about tesco to avios stopping? Not such a big deal for me as I was too young when it was easy to use and abuse, but still a shame

 

[Condor7]

If you are not doing much air travel switch to the Amex Platinum Cash Back card. You get 5% cashback on all purchases for the first 3 months, after that if you spend less than £5k a year you get 0.5% cashback and £5k and over 1%. There is NO annual fee. I have used it for years. I buy everything possible on my card, petrol, shopping, all online purchases. Almost everywhere accepts it although not so many smaller retailers and for them I use the Amazon MasterCard that pays 0.5% on everything, or 1% on Amazon purchases, again NO fee.

Unless you don’t qualify for one I can’t understand why everyone doesn’t get one. As I say there is NO fee it is a discount on everything you buy. It doesn’t sound a lot of discount but you get it paid once a year and depending on how much you spend you will be amazed how it mounts up and how much you get back each year. For me the combined cashback for both cards ranges from £150 to £200 a year, and that is for doing nothing other than using these cards rather than none cashback cards.

 

[ABB125]

I think one issue some people have is that they don't agree with the huge transaction fees American Express charge the retailer. And many businesses don't accept the cards because of this.

 

[SussexLad]

If you are not doing much air travel switch to the Amex Platinum Cash Back card. You get 5% cashback on all purchases for the first 3 months, after that if you spend less than £5k a year you get 0.5% cashback and £5k and over 1%. There is NO annual fee. I have used it for years. I buy everything possible on my card, petrol, shopping, all online purchases. Almost everywhere accepts it although not so many smaller retailers and for them I use the Amazon MasterCard that pays 0.5% on everything, or 1% on Amazon purchases, again NO fee.

Unless you don’t qualify for one I can’t understand why everyone doesn’t get one. As I say there is NO fee it is a discount on everything you buy. It doesn’t sound a lot of discount but you get it paid once a year and depending on how much you spend you will be amazed how it mounts up and how much you get back each year. For me the combined cashback for both cards ranges from £150 to £200 a year, and that is for doing nothing other than using these cards rather than none cashback cards.

My issue with this is company policy and tax. If I earn money directly from the work spend I put thru it, I need to declare it to them as per our travel and expenses policy. Further, if you earn over £50 from work expenses on it then you need to pay tax (benefit in kind - maybe?)

For me, its far easier and a safer bet to use point earning cards, which as per their T&Cs and HMRC rules have no monetary value.

Plus, I dont think you get as many offers on the cashback ones. Let alone insurance and lounge access.

I think one issue some people have is that they don't agree with the huge transaction fees American Express charge the retailer. And many businesses don't accept the cards because of this.

To be honest, any (sensible) business should budget for the maximum costs they will incurre on any transactions to ensure they usually make a profit. So if they accept American express, why shouldn't I use it? They know what they signed up too, plus it gives me loads of time for work to pay any expenses.

Its like with tesco clubcard, if you're not collecting the points you are paying for someone else to collect them.

 

[ABB125]

To be honest, any (sensible) business should budget for the maximum costs they will incurre on any transactions to ensure they usually make a profit. So if they accept American express, why shouldn't I use it? They know what they signed up too, plus it gives me loads of time for work to pay any expenses.

Its like with tesco clubcard, if you're not collecting the points you are paying for someone else to collect them.

Yes - the business should budget for it if they accept it.
However, if I ran a retail business, unless there was a good reason to accept American Express, I wouldn't. And I doubt any users don't have another means of paying. (My dad doesn't accept American Express in his business.)

 

[matt]

I have literally never spent a penny extra to get any avios but have enough for 2 people to go to NYC in business for like £2.

Is that really the case as you now have to pay tax which whilst it gets you in Business a lot cheaper it is not that cheap.

I've got myself a Amex Gold Card this year with the intention to earn enough points for when travel is a bit easier again at some point. I'm not sure if I'll keep it past 12 month. So far I've had the £5 cashback for small business plus the 5% booking with LNER.

 

[SussexLad]

Yes - the business should budget for it if they accept it.
However, if I ran a retail business, unless there was a good reason to accept American Express, I wouldn't. And I doubt any users don't have another means of paying. (My dad doesn't accept American Express in his business.)

Very true. The general advantage of accepting American express is that a lot of people that use it aren't spending their money so they spend more. When I travel for work, if I'm split between restaurants it sometimes does come down to who takes amex. Qyiet a few times I've walked away.

Is that really the case as you now have to pay tax which whilst it gets you in Business a lot cheaper it is not that cheap.

I've got myself a Amex Gold Card this year with the intention to earn enough points for when travel is a bit easier again at some point. I'm not sure if I'll keep it past 12 month. So far I've had the £5 cashback for small business plus the 5% booking with LNER.

They're tinkering around with the taxes, europe dropped from £35 reward flight saver to £1. Some routes to America are now £100. Got mixed up! Although I'd be surprised if they don't extend the rollout.

You know shop small works more than once? Although I swear the offers get better the longer you have it...

 

[Condor7]

I think one issue some people have is that they don't agree with the huge transaction fees American Express charge the retailer. And many businesses don't accept the cards because of this.

I understand some smaller retailers don’t want to accept it for the reason you state, and I personally understand that but virtually all larger businesses do, B&Q being the only one I know of that doesn’t, which is why, as mentioned, I have the backup Mastercard that pays 0.5%.

 

[SussexLad]

I understand some smaller retailers don’t want to accept it for the reason you state, and I personally understand that but virtually all larger businesses do, B&Q being the only one I know of that doesn’t, which is why, as mentioned, I have the backup Mastercard that pays 0.5%.

Greggs is the only other big company that doesn't take Amex iirc.

 

[Mojo]

Greggs is the only other big company that doesn't take Amex iirc.

However you can use it in Greggs by paying through their App. The App has a facility to top up your account credit by PayPal.

Yes - the business should budget for it if they accept it.
However, if I ran a retail business, unless there was a good reason to accept American Express, I wouldn't. And I doubt any users don't have another means of paying. (My dad doesn't accept American Express in his business.)

The main sales point I believe for businesses accepting it is that the total spend per customer / transaction with Amex does tend to be higher.

Despite popular misconceptions, the number of businesses, particularly chain retailers, that take American Express is quite large. Accordingly it is quite possible that businesses that don’t accept the cards are likely to lose business to those that do, particularly when you consider those involved in providing luxury goods/services that involve discretionary spending.

 

[ABB125]

Despite popular misconceptions, the number of businesses, particularly chain retailers, that take American Express is quite large. Accordingly it is quite possible that businesses that don’t accept the cards are likely to lose business to those that do, particularly when you consider those involved in providing luxury goods/services that involve discretionary spending.

Well fortunately my dad works in a "distress purchase" environment so will probably be safe!

 

[nlogax]

About a year and a half ago, I started the air miles game. I wondered if anyone else does the same?

I have literally never spent a penny extra to get any avios but have enough for 2 people to go to NYC in business for like £2.

Been doing this for years gaining multiple BA 2-for-1 vouchers in the process. If I could divert my mortgage through my BA Amex then that'd be even better.

 

[SussexLad]

Been doing this for years gaining multiple BA 2-for-1 vouchers in the process. If I could divert my mortgage through my BA Amex then that'd be even better.

That would be a sweet deal! Back in the days of tesco Bank and overly generous clubcard deals you probably could!

Also, the amex gold card just doubled the sign up bonus for a limited time. 20,000 point now, or 22,000 when using a refer a friend. Still free for the first year so perfect time for any newbies!

 

[jumble]

Greggs is the only other big company that doesn't take Amex iirc.

Screwfix don't

 

[Mojo]

Screwfix don't

Again, like Greggs, you can pay at Screwfix with PayPal, and they accept American Express this way.

 

[jumble]

I will not use Paypal unless they are acting as a merchant for various reasons
I do use them to collect Avios if the seller uses them.
I buy and sell PCs
The main distributors do not take Amex
However a big reseller is willing to take Amex via paypal and splits their bigger discount so I pay marginally less but get avios
Like @SussexLad I will not pay a higher price just to get the avios
Win Win

 

[FQTV]

Screwfix don't

As @Condor7 says above, B&Q doesn't take AmEx, and Screwfix is part of B&Q.

The reputation for higher merchant fees is something of a relic from the past, however; American Express has been targeting smaller retailers in particular for a number of years with fees that can, in fact, be lower than those for Visa and Mastercard.

It's part of the same commercial strategy that faces the consumer as their Shop Small campaign to encourage card use in smaller businesses.

There's quite a lot of inertia in the merchant services environment, however, and lots of businesses still stick with the merchant account that they have through their bank, and are charged highly for it. Even then, though, a call to the merchant account line can often get the charges down, since there is some more competition in the market now with the likes of iZettle and Stripe.

The one thing that does persist with American Express merchant services is that they still pay more slowly than Visa and Mastercard, and they pay net of fees, which can make some reconciliations a bit more complicated for the merchant.

However, the average spend of an AmEx cardholder does remain a lot higher than the average Visa or Mastercard holder, so there's some additional commercial sense in accepting it, especially if your customer base includes a reasonable proportion of corporate/business clients.

 

[jumble]

As @Condor7 says above, B&Q doesn't take AmEx, and Screwfix is part of B&Q.

The reputation for higher merchant fees is something of a relic from the past, however; American Express has been targeting smaller retailers in particular for a number of years with fees that can, in fact, be lower than those for Visa and Mastercard.

It's part of the same commercial strategy that faces the consumer as their Shop Small campaign to encourage card use in smaller businesses.

There's quite a lot of inertia in the merchant services environment, however, and lots of businesses still stick with the merchant account that they have through their bank, and are charged highly for it. Even then, though, a call to the merchant account line can often get the charges down, since there is some more competition in the market now with the likes of iZettle and Stripe.

The one thing that does persist with American Express merchant services is that they still pay more slowly than Visa and Mastercard, and they pay net of fees, which can make some reconciliations a bit more complicated for the merchant.

However, the average spend of an AmEx cardholder does remain a lot higher than the average Visa or Mastercard holder, so there's some additional commercial sense in accepting it, especially if your customer base includes a reasonable proportion of corporate/business clients.

In addition i know of some companies who do out of ordinary deals with Amex
Eg one we have a credit account which is then paid off twice a month by being charged to our amex gold business card and they will only accept business cards
I

 

[EssexGonzo]

Re Avios, I stopped collecting them when I stopped flying for business and when Lloyds canned their Amex Avios card a couple of years back. It generally gave us a few hire cars a year on hols, but rarely flights. The available reward flights bookable using Avios got fewer and fewer to the point where it's a borderline scam. Much better to use on hire cars or hotels, although I found that the hotels had to subsidise the Avios bookings (just like booking.com and the Genuis discount) so I stopped using it to avoid small hoteliers getting screwed.

The whole "tier status" thing never really meant much to me either. For some, it was a needy badge of honour feeding their hubris. For me, an occasional convenience that paid off when I couldn't book the cheapest fare through my company - I need the legroom at 6'3". Never used the silver / gold tags hanging from my rucksack, didn't really understand the image boost that some seemed to get from it.

I now put virtually all household spend (except B&Q obvs ) through an Amex platinum card. There's a fee (about £100??) but we generally get £500-£600 cash back per year plus many other discounted offers along the way.

I know from my banking background that Amex merchant fees and interchange earnings have been falling for years as they've been expanding their platform to take on more volume. They're not yet at the same level of Visa but not a million miles away.

 

[jumble]

Re Avios, I stopped collecting them when I stopped flying for business and when Lloyds canned their Amex Avios card a couple of years back. It generally gave us a few hire cars a year on hols, but rarely flights. The available reward flights bookable using Avios got fewer and fewer to the point where it's a borderline scam. Much better to use on hire cars or hotels, although I found that the hotels had to subsidise the Avios bookings (just like booking.com and the Genuis discount) so I stopped using it to avoid small hoteliers getting screwed.

The whole "tier status" thing never really meant much to me either. For some, it was a needy badge of honour feeding their hubris. For me, an occasional convenience that paid off when I couldn't book the cheapest fare through my company - I need the legroom at 6'3". Never used the silver / gold tags hanging from my rucksack, didn't really understand the image boost that some seemed to get from it.

I now put virtually all household spend (except B&Q obvs ) through an Amex platinum card. There's a fee (about £100??) but we generally get £500-£600 cash back per year plus many other discounted offers along the way.

I know from my banking background that Amex merchant fees and interchange earnings have been falling for years as they've been expanding their platform to take on more volume. They're not yet at the same level of Visa but not a million miles away.

Hmm i Love Avios
Last year as the missus and I flew Club back from SFO in the bubble of a 747 using our Avios and 2 for 1 and it did not feel like a scam at all
Next June booked to go again on the Avios Half Price
Pre Covid there was plenty of availability if one was going to the USA and booked at T-355
( I concur that the likes of Australia are a different kettle of fish)

 

[miami]

I have literally never spent a penny extra to get any avios but have enough for 2 people to go to NYC in business for like £2.

Not with taxes. I did fly the whole family to Singapore, Sydney, Melbourne, Aukland and back in First/Business for £2k a few years ago.

More recently I've been spending my copious amex points on wine.

 

[nlogax]

Next June booked to go again on the Avios Half Price

Good catch on the half price Avios deal. Just did the same thing here for a trip next April with a 2 for 1 round trip to Vancouver in Club. Naturally making a few assumptions about the world situation and whether Canada will be letting anyone by then but we can always push it back a bit.

 

[jumble]

Not with taxes. I did fly the whole family to Singapore, Sydney, Melbourne, Aukland and back in First/Business for £2k a few years ago.

More recently I've been spending my copious amex points on wine.

Our USA trip coat £1100 return in Club
The huge advantage of Avios especially now is that if you cancel 24 hours before the flight you get everything back less £35PP