How I do credit cards

Sunset up one of Gothenburg's sudden hills
It seems a little tacky (and boring) to post a picture of a credit card, so: this view brought to you by the reason I chose my current card – I got to Gothenburg last year using Avios. Quite happy to do a lot more of that for little-to-no money.

Up until the start of this year, I was using a bog-standard RBS credit card I got just because I’ve got a current account with them. It was a pretty big hassle to get a normal, adult credit card when I moved to the UK, as they give not one lick about your American credit history, so I may as well have been a newly formed human. I had to go back to a student credit card for a few years to build credit (£500 limit and no benefits), and even by the end of that, it took me a whole extra year and a lot of getting on the phone elevating my case to supervisors and writing Very Disappointed Letters in order to get a normal credit card. Even with a real job and everything.

The point is, I had the card I was using because it was the path of least resistance when resistance was HIGH. But I’ve always been looking for more rewarding options. I’ve been using British Airways and their frequent flier programme Avios more, well, frequently, than any other airline or programme, so I was looking for the best option for boosting my Avios balance with a credit card. It seemed like the most sensible route to go if I was going to be milking any system.

There were a few options for this, but the one I ended up with was the Lloyds Avios. Most air miles credit cards are American Express, which is what you get when you’re fancy and friggin’ rich. Or at least as financially stable as my parents, which is like proper adult-level shit. I’d tried to apply for a British Airways American Express a few times about 3 years ago and was immediately declined. Totally not fancy enough. Totally not surprising.

So to make this reward card thing work for non-fancy folk like me, Lloyds has a card where you get a MasterCard AND an American Express on the same account. You use the American Express card where you can and get 1.25 Avios on the pound for your trouble. (Plus double in the first 6 months, score!) Everywhere else you use the MasterCard and get 1.25 Avios for every 5 pounds. There are also offers on balance transfers. And if you spend £7,000 on the account in a year, you get a free upgrade certificate for a flight on BA.

THAT is definitely a lure because MAN do I ever want an upgrade all the time. But when you do the math, it means you have to spend at least £584 a month all year ON the card. That’s a lot. But as ever, I have a plan for it. Mostly I do a lot of paying when I’m in group situations and everyone else has cash. And so far I’m on target to get the upgrade, but I don’t know if I’ll be able to get it more than one year in a row, because my spending just isn’t that high.

Anyway, the best way to make this work for me is not some secret system. If you’ve ever read about rewards credit cards and how to work them to the bone, this will be familiar. The minute I got these cards, I started using them as my debit card. I try to avoid using cash wherever possible so that the bulk of my spending is getting me miles. But then of course, I HAVE to pay the balance on the bill to make it worth it. So, no overspending, no carrying things month to month. I actually try to move money from my current account to the card every week or two so I can keep things under control. And it’s working so far.

This will be my only card now that I’ve cleared the balance on my old card. That was the other thing going on here. All that good stuff (er, Africa) I put on credit had to be paid down. The initial plan was to transfer the full balance to my new card to take as much advantage of the Avios bonuses as possible, but my balance was over £2000.

Seeing as how this Lloyds card is still HALF fancy, what with the American Express and all, I wasn’t able to get approved for any more than a £1000 limit initially. So I left the old balance where it was and came up with an aggressive pay-it-down-by-the-end-of-the-year attack plan.

Once it had been 6 months, I was able to up the balance on the Lloyds card and move the £700-odd leftover balance from the old onto my Avios card. This means my old card is, at long last, at zero. (WOOOO! I’ll probably close it eventually.) And my new card will probably carry half that balance over one billing cycle, but luckily, transfers were 0% for 12 months, so aside from the 3% transfer fee, it won’t cost me any extra. (That worked out less than paying the interest on the original card, so, winning all around.)

Another great thing about this card is, quite sensibly, it was built for travelers. There’s no fee on international transactions. It definitely makes sense to have something I can use everywhere without paying extra for the privilege. (I think there’s also deals on ordering currency through American Express, but I never do that kind of thing because I never need the amounts of cash you need to get to make that worthwhile. You know, like, fancy people levels of cash.) There IS an annual fee, but it’s only £24, and I’m happy to pay £2 a month rather than some ridiculous percentage on every charge I make outside the UK.

You have to be the kind of person who’s ok with, and even obsesses over, keeping track of detail to make this kind of card work as hard for you as possible, but I AM that kind of person. And it pays off. In the first 5 months of having this card, I’ve got 8,238 Avios from it alone. The statement about to come through for month 6 will definitely put me way over the 9,000 mark, and that is the point at which you can get a reward saver flight to the first zone in Europe, or a return Eurostar ticket. So that means that half a year of mostly regular spending can get me to Paris for £35 return. And all I had to do was pay a little extra attention.

So, all in the interest of essentially free flights and upgrades, I am now the fancy jerkface who is forever asking ‘Do you take American Express?’


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