MBNA is set to close at least two of its airline credit cards, meaning cardholders will stop getting the miles they currently earn for Virgin Atlantic or American Airlines.
Lloyds-owned MBNA told MoneySavingExpert it is in the process of writing to affected customers, though it refused to say how many it's contacting or exactly when the cards are being pulled. Cardholders will be issued new MBNA-branded cards instead, which are unlikely to offer comparable rewards.
If you've earned miles saved on your account MBNA says you will be able to redeem them - but it hasn't yet given details of how this will work or the deadline.
And it's unclear if MBNA's other airline credit cards - for example, with Emirates, Etihad or Lufthansa - could also be affected in due course. MBNA closed applications for all of its airline credit cards in November of last year.
Here's what we know about the changes so far. For more info on how this type of credit card works and our top picks, see our Credit Card Rewards guide.
Which cards are being axed?
'Co-branded' credit cards refer to cards that are issued by one provider but have another company's branding. MBNA's so far confirmed two such cards are closing:
- The MBNA Virgin Atlantic credit card, which has previously featured in our Airline Credit Cards guide. There are two version of this card - 'white' and 'black' - and whichever version you have you'll have both an Amex and Visa card. For every £1 spent, 'white' cardholders get 1 'Virgin flying club' mile on the Amex and 0.5 miles on the Visa, while 'black' cardholders - who pay a £140/yr fee - get 2 miles on the Amex and 1 on the Visa.
It's important to note only the MBNA Virgin Atlantic credit card is being pulled and NOT the newer Virgin Money-issued Virgin Atlantic credit card.
- The MBNA American Airlines card, which is a Visa, has a fee of £70/year and offers 1.25 American Airlines miles per £1 spent.
While MBNA hasn't given a reason for closing the cards, when it closed two other Amex cards last year in a similar move, it blamed the move on an EU cap on interchange fees (the charge levied on retailers for processing a payment) which has made cards less profitable for providers.
I'm an affected cardholder - what about the rewards I've earned?
MBNA is being very tight-lipped over the detail of the card closures - it won't tell us when they're closing exactly.
It has said that customers who have earned miles on their account will still be able to redeem them under "the applicable terms and conditions". Unfortunately we couldn't find these terms and conditions on its website any longer so we're checking with MBNA what this means - in the meantime, you'll need to call MBNA directly on 0345 606 2062 to ask for clarification.
If you do wish to keep earning Virgin Flying Club miles, you can apply for the new Virgin Atlantic Reward or Reward+ cards issued by Virgin Money - though as with any new credit card application you'll need to be accepted. For more details on these cards, see below.
What about MBNA's other airline credit cards?
MBNA runs a number of other 'co-branded' airline credit cards, for example with Emirates, Etihad and Lufthansa.
When asked if there were other cuts to airline credit cards in the pipeline, it told us: "At the moment, we’re working on our Virgin Atlantic and American Airlines partnerships. Of course, we continually review our products and services so can never say there’ll be no future changes."
What are the best alternative airline credit cards?
If you want to keep earning rewards with an airline credit card instead of being transferred to an MBNA-branded card (which is unlikely to offer airline rewards), here are our top pick alternatives:
- The fee-free BA Amex (eligibility calc / apply*) gives 5,000 bonus Avios points if you spend £1,000 within three months and gives a free companion flight ticket if you spend £20,000 in a year. Plus, you earn 1 Avios point per £1 spent on the card. (22.9% rep APR).
- The BA Premium Plus (eligibility calc / apply*) offers a much higher 25,000 introductory bonus as long as you spend £3,000 within three months. You also earn 1.5 Avios per £1 spent on the card as well as a free companion flight ticket if you spend £10,000 in a year. However the card comes with a £195/year fee, so is only worth it for high spenders. (76% rep APR, incl fee).
- The new Virgin Atlantic Reward (eligibility calc / apply*) is fee-free and gives 5,000 bonus Virgin Flying Miles if you spend anything on the card within 90 days. Plus if you spend £20,000 in a year, you'll earn a companion ticket in economy or a flight upgrade from economy to premium (assuming you've the basic red tier status). You also earn 0.75 miles for every £1 spent on the card. (22.9% rep APR).
- Alternatively, the Virgin Atlantic Reward+ (eligibility calc / apply*) offers 15,000 bonus miles if you spend anything on the card within 90 days. Plus if you spend £10,000 in a year you'll earn an economy companion ticket or flight upgrade from economy to premium (assuming you've the basic red tier status). You also earn 1.5 miles per £1 spent on the card. It comes with an annual £160 fee, so, like the BA Premium Plus card above, is only worth it for big spenders. (63.9% rep APR, incl fee).
If you are thinking about applying for a credit card, first use our eligibility calculator to check your chances of acceptance without harming your creditworthiness. Remember to always repay IN FULL (preferably by direct debit) to avoid hideous APR which'll quickly wipe out any gains from the rewards. (See APR Examples).
What does MBNA say?
An MBNA spokesperson said: "We took the decision to withdraw some of our co-branded credit cards back in 2017 and have now begun writing to existing customers to let them know that we’ll be transferring them across to MBNA-branded cards.
"We’ll communicate directly with those affected to let them know of the change."