Deciding How Much Spend To Put On The British Airways Card

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For several weeks now we’ve seen an increased sign-up bonus on the $95 annual fee British Airways Visa Signature® Card. The card is offering a sign-up bonus of 50,000-100,000 Avios, depending on how much you want to spend. The breakdown of the bonus is as follows:

  • 50,000 bonus Avios after you spend $3,000 on purchases within the first 3 months from account opening
  • 25,000 additional bonus Avios after you spend $10,000 total on purchases within your first year from account opening
  • 25,000 additional bonus Avios after you spend $20,000 total on purchases within your first year from account opening

BA-Visa

I shared my experience applying for this card a few weeks ago, and had no trouble getting approved. Keep in mind that this card isn’t subjected to Chase’s 5/24 rule, and is available to those who haven’t gotten a new cardmember bonus on the card in the past 24 months. I had this card a long time ago, so was eligible to get the card once again.

How much of the sign-up bonus is it worth earning?

In my opinion the British Airways Visa Signature® Card is worth acquiring for the 50,000 Avios sign-up bonus after spending $3,000 within three months alone. We haven’t really seen a bigger sign-up bonus than that without a huge spend requirement in a long time, so it doesn’t get much better than that.

I get some people are hesitant to apply for a card and not maximize the sign-up bonus all the way, but in this case there’s no shame in that, in my opinion. A bonus of 50,000 Avios after completing minimum spend is a worthwhile sign-up bonus for most.

However, assuming you’re someone who spends a lot in non-bonused categories, to what extent does it make sense to maximize these categories? To break down the math a bit in terms of the return you’re earning on non-bonused spend (including the usual 1x Avios per dollar spent):

  • If you spend $3,000, you’re earning ~17.7 Avios per dollar spent (53,000 Avios for $3,000 of spend)
  • If you spend $10,000, you’re earning an incremental ~4.6 Avios per dollar spent (32,000 Avios for $7,000 of spend)
  • If you spend $20,000, you’re earning an incremental 3.5 Avios per dollar spent (35,000 Avios for $1,000 of spend)

Personally I value Avios at ~1.3 cents each, meaning that you’re earning the following return on spend:

  • $1-3,000 gets you a return of ~23%
  • $3,001-10,000 gets you a return of ~6%
  • $10,001-20,000 gets you a return of ~4.6%

I’d consider those to be excellent returns on spend in all three ranges, though obviously the greatest return is for the first $3,000 of spend, and the incremental return decreases after that.


Efficiently redeem British Airways Avios for travel on Aer Lingus

What alternatives should you consider?

When it comes to prioritizing credit card spend, I always recommend trying to complete the minimum spend on worthwhile sign-up bonuses first. So that should always be the top priority. Then it makes sense to try and maximize category bonuses as much as possible, given that some cards offer as many as 5x points in select categories.

However, for everyday, non-bonused spend, typically the best return you’ll get is right around 2.5%. For example, the Chase Freedom Unlimited® offers 1.5x points on everyday purchases, and in conjunction with a card like the Chase Sapphire Preferred® Card, those points can be converted into Ultimate Rewards points. I value those at ~1.7 cents each, so to me that’s a return of ~2.55%.

With that in mind, if you are someone who spends a lot in otherwise non-bonused categories, the British Airways Visa Signature® Card is tough to beat. The major restriction to keep in mind is that you only achieve the above returns if you actually spend at least $3,000, $10,000, or $20,000. In other words, spending $2,000, $9,000, or $19,000 won’t be nearly as rewarding

Bottom line

The British Airways Visa Signature® Card has a big sign-up bonus and isn’t subjected to Chase’s 5/24 rule, so it’s a card that many should be interested in. I recently signed up for the card and will do everything I can to maximize the sign-up bonus, as there’s not a better reward on another card for non-bonused spend. I’ll probably try to pay my taxes using this card, as you can do so for a fee of under 2%, which I consider to be a great value.

However, even if you just want to spend $3,000 in the first three months to get the 50,000 Avios, this is still a worthwhile offer, in my opinion.

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Comments

  1. How does the value of the 2-4-1 play into this since $20k puts you 67% of the way towards the $30k needed for the 2-4-1?

  2. I’m about to have a large college tuition bill for my kid and was thinking about signing up and using this card for at least the first year (no fee for paying with CC). It will be about $30k per year all in so I could get the 2-4-1 as well. Does that make sense or should I split the amount and get several sign-up bonuses?

  3. I’m right at 7/24, last card application on November 2017. I live in uk so it seems like I might get a lot of value, applying for both me and my wife as we will travel a ton in the next two years.

    I was consider letting the 5/24 reset and open a crapload of cards when I get back to the states. Is it worth it for me to apply for this? I had 600k credit card points but half are gone now in 6 months of travel.

  4. @ Corey sacken — All depends where you typically travel to, which cards you presently have, etc. How long will it be until you’re under 5/24? If you travel between the US and UK then there might also be value in the companion certificate, in my opinion. I’d certainly consider the card, especially since you can create a household account and then pool your Avios.

  5. @ Paul — I’d say that could be a great strategy. Assuming you’d get value out of the companion certificate (which I think is worth it if you’re fine with the carrier imposed surcharges), I’d just go all the way and put all $30K on the card so you earn the 100K bonus Avios plus a companion certificate.

  6. @ Duke787 — It’s a great topic I should cover in another post. Personally I think there’s potentially a lot of value to be had with the travel together voucher, though a lot of people are put off by the carrier imposed surcharges. However, if you fly transatlantic a lot and value flying in first class, it’s a pretty solid option, in my opinion.

  7. Thanks Lucky. Can you reduce the surcharges some by flying through LHR to another BA destination? Last year, we flew AMS-LHR-ATL one way in First on award tickets and I recall the total surcharge per ticket being “only” around $3-400. I would assume it would be double that for a R/T but still less than the $1100+ I’ve seen for flights to/from LHR only.

  8. @ Paul — Yep, there are indeed ways to lower them a bit, by avoiding LHR as an origin and destination, and by using European cities with lower fuel surcharges. but in terms of the carrier imposed surcharges alone, you’ll typically be looking at $800 or so roundtrip at a minimum. I still consider that worthwhile with a companion certificate, though not everyone does.

  9. Thanks lucky. I will be over 5/24 until November 2018 I think. 99% of our travel is uk to Europe. We have platinum status so flying British is better for us if possible. We travel back to states annually.

    We fly twice a month so think it makes sense to do it. Also have a 110k amex points separately, considering converting to british if a transfer bonus comes along. I could technically bonus together about 250k avios with 6k spend

  10. @Paul read into that college bill more I can guarentee you no college is accepting a credit card for no fee. There either giving checks a discount or adding a fee on they get charged a 2-3% fee for the transaction there’s no way there just soaking that loss. If everyone did the same that would be 100s of thousands of dollars or even millions lost for a big college. I thought the same at first but once you get to the actual payment page the fee will be reflected.

  11. personally, I wouldn’t bother spending anything with them, let alone on the card. They’re a dreadful airline, a shambles, way behind the times and their competition and overpriced. An embarrassment to Britain.

  12. @Jack I can guarantee you are wrong at least with respect to the University of Texas. They take only Amex and Mastercard, but absolutely do not charge a fee.

  13. @ Jack — I can confirm @ Jason’s experience. I’ve charged ~$60k of grad school tuition at USC with no fee. They only take Visa cards, but there absolutely wasn’t a fee.

    Others have reported similar experiences, so it probably just depends on the school.

  14. 30% of public schools accept credit cards with no fee (approximate 40% have no fee of the 85% that accept credit cards). Private colleges suck for the most part of this, almost all of them accept credit card, less than 15% dont charge a fee. Ask for an itemized bill/receipt with both payments as universities are shady/dumb about this.

  15. @Jack – all SUNY schools accept all credit cards with no fee. Will reimburse myself right out of our 529 plan before the bill comes. Looking forward to lots of points with another kid right behind this one in 3 years. Did the same thing when I went to law school 10 years ago at a public school.

  16. It’s misleading to suggest that spend of $1-3000 gets you a return of 23%. Surely you mean that spend of exactly $3000 gets you that return. If you spend $1, you are getting a return of 1.3%, since you have only earned a single point. You have to hit the $3000 threshold for the higher return to kick in.

  17. The BOGO free ticket using Avios points with $30K annual spend works for us as a sweet way to cross the pond round trip in FIRST to visit family. The champagne is also quite good in the air and in the Concorde Lounges. In addition, the new First security entrance at Heathrow is brilliant.

    Knowing that this post would bring out the British Air hater trolls, their narrow mindedness shows as they may not realize how valuable Avios points are to use while traveling in Asia and Australia on Qantas and Cathay Pacific.

  18. I have 2 companion awards.Have not been able to use either.We have tried 1 yr in advance with multiple dates no go.letting it go and using another card.

  19. “If you fly transatlantic a lot and value flying in first class, it’s a pretty solid option, in my opinion.”

    +1, I couldn’t agree more. Got this card a few years ago when they ran a similar sign-up bonus and was able to use my travel together certificate to get 26.2 cents per Avios in value on a transatlantic trip to Paris with a stopover in London, even after YQ was factored out. If you are a fan of BA First Class for European hops, it’s a solid option.

    I certainly see the perspective of those who object to the fuel surcharges, but I look at this Avios/those certificates as being a tool that lets me travel first class for the out-of-pocket cost of economy, and that’s what I use it for

  20. I got this card last year, hit my goals, and then redeemed my companion ticket on BA (you get the most value out of World Traveller Plus or Business). Then came 2017. I still have the card, but I have not been able to decide if it was worth that amount of expenditure for this year as well. Certainly the initial 50K helped me make it worth it last year, but is it worth it for the second year, given I will not get the initial 50K avios?

  21. HenryK,

    I’ve had no problem using the 2-4-1 tickets for Club World, and that is decent value. First would be even better value but I don’t think i have ever seen F availability except for just one seat. So in practice the 2-4-1 deal hasn’t worked for me in F.

    But I suppose in depends on which airport you are flying from, and the equipment type.

  22. Applied and told, “we will mail you a decision in 30 days.”

    I have a ton of chase cards already, with around $150k in total limit already.

    Did I get denied? Should I call (even though it doesn’t say to)?

  23. You need to take into account also the fly together benefit, after spending 30k, wich is very valuable

  24. My personal plan …. just got the card btw…. put 10k on it and get the 75k and put it away till Jan1 (I’m not going to spend 30k, most likely, between June and the end of Dec. Come Jan 1, take it back out and knock out the second 10k and reevaluate if i want to spend an additional 20k to get the companion pass.

  25. @ corey, I called today. They said, “We don’t want to deny this, but you are already at an appropriate credit limit.” So they just moved limit around and was approved!

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