Two Ways To Calculate The British Airways Visa Card Sign-Up Bonus

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Out & Out writes about how he just applied for the British Airways Visa Signature® Card, and how he rationalized the sign-up bonus.

The card is available to those who don’t have the card, and who haven’t received a new cardmember bonus on the card in the past 24 months, which should make a lot of people eligible. Furthermore, the card isn’t subjected to Chase’s 5/24 rule. Nearly a decade ago the card had a pretty “no strings attached” 100,000 Avios sign-up bonus. You could earn those Avios upon completing a basic minimum spend, and it’s probably one of the hottest credit card offers we’ve ever seen.

I suspect the motivation behind the offer was that the card was new to the market, though not surprisingly we haven’t seen an offer that generous since, and I doubt we’ll see an offer like that again.

At the moment the $95 annual fee British Airways Visa Card is offering a sign-up bonus of up to 100,000 Avios, though the spend requirement is higher:

  • 50,000 bonus Avios after spending $3,000 within the first three months
  • 25,000 additional bonus Avios after spending $10,000 total within the first year
  • 25,000 additional bonus Avios after spending $20,000 total within the first year

The way I see it, there are two ways you can view the sign-up bonus on this card:

6x points on everyday spend

The British Airways Visa Card offers 100,000 bonus Avios after spending $20,000 over the course of a year, and on top of that you earn 20,000 Avios for the actual spend.

That means if you spend a total of $20,000 in the first year, you’d earn 120,000 Avios. That means you’re earning 6x Avios per dollar spent, which is a really great return for non-bonused spend. $20,000 sounds like a huge minimum spend requirement, but really that comes down to under $1,700 of spend per month, which I think a lot of people can swing.


Redeem Avios for Japan Airlines first class

17.7 Avios, 4.6 Avios, and 3.5 Avios per dollar spent

It’s fair to say that the sign-up bonus on the British Airways Visa Card essentially offers 6x Avios on the first $20,000 spent within the first year. However, that doesn’t really account for the diminishing marginal return, given the thresholds at $3,000, $10,000, and $20,000 of spend. So if you really want to look at your marginal return at each spend threshold, here’s what that looks like:

  • 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)

17.7 Avios per dollar spent is awesome. 4.6 Avios per dollar spent is really great. 3.5 Avios per dollar spent is still very good. It’s a different way of looking at it, but regardless of how you view it, I tend to think the incremental return is worthwhile.

In other words, if you otherwise have any amount of non-bonused spend, I’d rather be earning 3.5x Avios than the return I’d otherwise get on the best cards for everyday spend.


Redeem Avios for Cathay Pacific first class

Bottom line

The British Airways Visa Card has a great sign-up bonus that many people should consider. Not only is the card not subjected to the Chase 5/24 rule, but it actually has a very compelling sign-up bonus. I value Avios at ~1.3 cents each, so whether you plan on earning 50,000, 75,000, or 100,000 Avios, I’d seriously consider applying.

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Comments

  1. The main benefit of redeeming BA avios was to use it on domestic short distance AA flights. Other than that, you either have to pay a huge amount of fuel surcharge or the distance based award chart requires more miles so it does not make sense. With being so difficult to find AA domestic award tickets these days, the value of avios has gone down a lot. If I spend $20000 a year, there is no reason that I would spend that much on this card.

  2. What about putting $30k in spend on the card to earn the travel together ticket? Essentially that would earn you 260,000 miles (2x the sum of the 100k bonus and 30k in spend) which is a pretty good return if a) you can actually use the TTT and b) you can swing the spend and c) stomach the fuel surcharges.

  3. I have been considering this credit card for some time now, but it has been hard for me to get past the screwing British Airways gave to those of us who signed up for Match.com through the shopping portal to receive the 150 Avios per dollar spent bonus, only to have the Avios clawed back and Match.com accounts closed. Personally, I had almost 35,000 Avios in a pending status for months in the BA shopping portal and Match.com refused to refund my money. Eventually, after many phone calls, emails and Twitter rants, the Avios were transferred to active status in my BA account, only to be clawed back months later. After again going on a Twitter rant, they were finally reinstated. I immediately transferred them to Iberia for safe keeping. In short, British Airways sucks like a Dyson vacuum cleaner.

  4. Unfortunately, neither way is entirely correct as opportunity cost is not accounted for. If you are spending that much on one card, then you’re forgoing spend on other cards, likely with bonus categories. If you sign up for new cards on at least a semi-regular basis, you’re giving up even more.
    So only in limited circumstances are those calculations correct. I see you plug the card at the end but I’m going to be charitable and invoke Hanlon’s Razor (replacing “stupidity” with something gentler, say, “uninformedness”)

  5. I agree with Evan that the real value of the card is spending the $30K (if you can) and getting the Travel Together Ticket — if you can stomach the fuel surcharges. Round-trip Travel Together (for two) from US to the UK in First Class is 136,000 Avios — just a little more than the 130,000 you’ll get from spending $30K — and you can top off with transfers from Amex, Chase, SPG, etc. How else could you possibly earn two round-trip tickets in First Class to Europe for spending $30K?

  6. “How else could you possibly earn two round-trip tickets in First Class to Europe for spending $30K?” In theory it sounds good, but in practice not so because the problem is actually getting the 2 seats for the same flight!
    You have to get lucky to get 2 round trip first class seats on the same flights. If you are not lucky then you lose your TT certificate when it expires. This happened to me once 🙁
    I am using it for a RT Business Class ticket and the surcharge is $1,200 per ticket. That’s $2,400 for two tickets. I could have bought 2 economy class tickets for the same flight for only about $500 each. So is it worth it for me to pay $1,400 extra to fly in a lousy business class seat, or would I get better value flying economy class and using the $1,400 for something else? I’m undecided. If the BA business class was great (like SQ etc) then that would be different.
    But I always get the feeling that I am “slumming it” when I fly BA Business Class.

  7. I’ve never had an issue getting first class on BA. And depending on when you travel (i.e. avoiding peak), you can get first class using TT from US to UK for only 87,500 each. With economy fares from my home town to the UK routinely over $1,000 (and were for the dates I chose later this year), I am more than willing to spend $200 to do it first class. While BA first class is not great, it’s better than any business class out there.

  8. If you are planning on going for the 241 fare, remember that the $30K spend is for a calendar year. The 1st $3K will have to be in 2017. If you get the card between today and September 30th (when the 100K offer goes away) you will have until September 2018 to complete another $17K to qualify for the full 100K. When you’ve done that, it’s time to figure whether it’s worth it to spend another $13K for the companion fare.

    @Mike Another use of Avios is for upgrades. If one can find reasonably priced premium economy or Business class BA flights, upgrades to Business or 1st are quite reasonable.

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