What should you change to if you have the Virgin Atlantic MBNA credit card…?
If you have one of the MBNA Virgin Atlantic issued credit cards, you will most probably have received a letter telling you that the Virgin MBNA credit card is indeed closing. This poses many questions for existing customers of the Virgin credit card MBNA as to whether staying loyal to the Virgin brand is most beneficial or indeed if moving away from the MBNA Virgin credit card altogether would provide best value for money.
Having held the MBNA Virgin Black credit card for some time, I found myself asking exactly the same question.
Let's break this post down...
What is happening with the Virgin Atlantic MBNA credit card?
Significant changes to the credit card industry earlier in the year has made it significantly more expensive for the likes of MBNA to offer rewards cards to third-party providers (such as Virgin Atlantic). As such the majority of third-party American Express and MBNA cards have been withdrawn, including the MBNA Virgin credit card.
What are the alternatives to the MBNA Virgin Atlantic credit card?
In my eyes there are three main options for those with existing Virgin Money MBNA credit cards and those looking to earn Virgin Flying Club Miles through a credit card.
The team at Virgin have been busy replacing the Virgin Atlantic credit card MBNA with two brand new MasterCard products. These are as follows:
- Virgin Atlantic Reward MasterCard: This replaces the free version of the MBNA Virgin Atlantic credit card and offers a reasonable sign-up bonus of 5,000 miles. Continued spend rewards for the card are also strong for a MasterCard at 0.75 miles per £1 spent. You’ll also receive a 2-4-1 voucher when you spend £20,000 in a year. More details below.
- Virgin Atlantic Reward Plus MasterCard: This replaces the MBNA Virgin Black card and comes with an annual fee of £160 pa. The sign-up bonus is increased to 15,000 miles and it has an exceptional continued spend reward of 1.5 mile per £1 – no other MasterCard comes close. You’ll also receive the 2-4-1 voucher when you spend £10,000 in a year.
Ok, so that’s two replacement Virgin Atlantic MBNA cards issued directly from Virgin Money, but you may remember I mentioned there were a total of three possible cards to replace the MBNA Virgin Atlantic credit card! The final card is actually not issued by Virgin but instead American Express. The free American Express Gold Card is currently one of the most generous free credit cards in the market and is definitely worth considering when replacing your Virgin MBNA credit card. The reward points can be transferred directly to your Virgin Flying Club account at a rate of 1:1.
The card offers a 10,000 point (12,000 if you use this link) sign-up bonus. This sign-up bonus is over double that offered by the free Virgin card and close to the level offered by the card which comes with a fee of £160. This card however doesn’t come with the 2-4-1 voucher that the other MBNA Virgin Money replacement cards I’ve recommended offer, however read on to find out why I feel the 2-4-1 voucher is only useful for either Flying Club Silver or Gold members.
Rewards for hitting the spending target – replacement Virgin MBNA credit card
If you’ve decided to replace your Virgin MBNA credit card with either the Reward or Reward Plus MasterCard and are able to spend either £20,000 or £10,000 respectively, you’ll trigger a bonus as set out below.
Upon triggering the bonus, all Flying Club members can choose between a 2-4-1 voucher for a Virgin Flying Club redemption in economy or an upgrade to Premium when you book an economy reward flight. Silver members have the additional benefit of being able to use the 2-4-1 voucher to redeem Premium seats or alternatively swap for a lounge pass to the Virgin Clubhouse. Gold status members can redeem their 2-4-1 voucher in Upper Class or alternatively swap it for two Virgin Clubhouse passes.
Now I’d recommend reading my full review of each of the cards for a detailed overview of the various benefits. The free Reward Card can be found here and the premium Reward Plus review can be found here.
The benefit of the 2-4-1 voucher increases significantly for the Premium and Upper Class redemptions however don’t forget that these are only available to Silver and Gold status holders. The cost of a flight from London to NYC (excluding taxes) is approximately £149, which is the saving you’d receive when using the 2-4-1 voucher in economy. The cost of Premium increases significantly to £489 (excluding taxes) and finally Upper Class is £1,169 (excluding taxes). This highlights my point that the 2-4-1 voucher only really provides significant value to Silver and Gold members.
What should I go for instead of the Virgin Atlantic credit card MBNA?
With the MBNA Virgin credit cards closing, let’s look at the question we’ve all been waiting for. Now, the credit card you should choose depends on a number of variables. I’ve provided three examples below which may help you decide what’s the best option going forwards.
- Spend less than £10,000 per year on a credit card
- The first question I’d ask people who spend less that £10,000 per year is: Do you believe that the majority of places you shop at would accept American Express? Think large chains, etc. If the answer is no, then the free Virgin Reward card would be the one for you. If you believe you could use American Express, then the sign-up bonus of 10,000 (12,000 if you use this link) for the free Amex Gold Card is significantly more than the Virgin card. You’ll also receive a higher rate of earning.
- Spend between £10,000 and £20,000 per year
- This section is slightly more tricky. First question would be: Would you use the 2-4-1 voucher? If so then the premium card is likely to be the best option. You’ll earn 15,000 points sign-up bonus and a minimum of 15,000 additional points for spending on the card. I value the Flying Club Mile at approximately 1p, which would mean that the spending bonus is worth £140 (£300 less the £160 pa card fee). You’d also receive the benefit of the 2-4-1 voucher which as I explained earlier provides a minimum of £149 worth of value making the total benefits worth in the region of £289 for those who aren’t Silver or Gold status. This compares to the free card where you’d receive a 5,000 sign-up bonus and 0.75 miles per £1 spent: a total of 12,500 or £125. The American Express Gold Card would provide 12,000 miles plus a further 10,000 for the yearly spend, making a grand total of 22,000 miles or approximately £220 in value. If you don’t think you’ll use the 2-4-1 value, I’d strongly recommend the American Express Gold Card based on the maths above.
- Spend £20,000+ per year
- For anyone spending over £20,000 per year on credit cards, I’d suggest holding a combination of the premium Virgin Atlantic Reward Plus Card as well as the free American Express Gold Card. By spending £20,000 across the two cards, it’s possible to generate somewhere in the region of 56,000 miles (Virgin sign up 15,000 / American Express sign up 12,000 / Amex spend 2,000 / Virgin spend 27,000) or £560 in value less the £160 pa card fee and plus the 2-4-1 voucher benefit (if you’d use it!).
Losing the MBNA Virgin credit card is no big deal!
As you can see, depending on your various spending patterns, moving away from Virgin Money and considering American Express could actually be significantly more beneficial when you decide to replace your Virgin MBNA credit card or are just looking for a credit card on which you can earn Virgin Flyer Club Miles.
Whatever you end up doing, please do not hesitate to share this article with friends who may also be seeking to replace their Virgin Atlantic MBNA credit card. Please do comment if you have any questions or want any ideas when switching your MBNA Virgin Atlantic credit card.
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