Is the Lloyds Avios Rewards credit card about to be dropped?

For clarity, this is a purely speculative article – but the smoke signals seem to be there.

When the Lloyds Avios Rewards credit cards were launched, I was initially sceptical – apart from the hugely generous offer of no FX fees on foreign spending.

Over time I came to appreciate the package, especially the way that the upgrade voucher benefits solo travellers who get no value from the BA Amex 241 voucher.

Feedback about Lloyds customer service was shocking.  It has not improved in the last four years.  My own experiences were just as bad – after I paid my wife’s bill from my bank account (a not uncommon thing, you might think) her cards were frozen for ‘suspected money laundering’.

They would only be unlocked when I went to a Lloyds branch and showed them a statement from my HSBC account showing the money going out – but my next HSBC statement wasn’t due for 3 weeks and they would not accept a print from an in-branch machine.

What prompted this article is that Avios has just withdrawn the refer-a-friend bonus it was offering for the Lloyds Avios Rewards cards.

This scheme has run for the last three years.  For Avios and Lloyds it was a very cheap way of recruiting new customers – and because Lloyds does not allow ‘churning’, they were likely to be long term customers too.

Why would Avios and Lloyds do this? Potentially because the cards are about to be scrapped.

Here are some more reasons why the cards may be on the way out:

Over the last few months we have seen Lloyds scrap the £140 Premier Avios card.  TSB has also scrapped its two Avios cards having dropped the ‘refer a friend’ scheme a few months earlier.  To be fair, these products were all stinkers.

I understand that American Express is cancelling all of its licensing agreements.  Lloyds, MBNA and Barclays will have to stop offering Amex cards in the medium term.  This means that the Lloyds Avios Rewards card would become a pure Mastercard package.

At 0.25 Avios per £1 on the Mastercard, with no companion Amex, Lloyds is going to struggle to get many people to pay £24 per year for the card

The core selling point of the Lloyds card – no FX fees and earn Avios on foreign spending – is not sustainable.  In a world of 0.3% interchange fees there are only three ways to make money with a credit card.  One is the annual fee (not sustainable as a pure Mastercard paying 0.25 Avios per £1), the second is interest charges (which are minimal on loyalty cards with a high income professional card base) and the third is the 3% fee on foreign spending (which Lloyds has voluntarily given up).

We know that American Express has agreed a wide-ranging credit card deal across IAG.  I understand this includes options for Ireland and a Vueling card for Spain.  The Lloyds card gets in the way of this.

We know from the recent Investor Presentation that all of the Avios schemes are to be merged onto the avios.com platform.  Aer Lingus AerClub shows how this works – your AerClub number is also an avios.com number, and when you want to redeem you have to visit avios.com.  When the distinction between avios.com and BAEC disappears, there is no need for both Lloyds and Amex credit cards.

Whilst probably not part of the original reasons why Avios may want to drop Lloyds, the fact that Lloyds will now also be issuing the Virgin, American, United, Lufthansa, Emirates and Etihad cards will not go down well.

As I said at the top of the page, this is pure speculation on my part.  If we’re honest, though, it is difficult to see how these cards could continue to exist in their current form.

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Want to earn more points from credit cards? – April 2025 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios Mastercard

Get 5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on the ‘free for a year’ American Express Preferred Rewards Gold card is increased from 20,000 Membership Rewards points to 30,000 points. Points convert 1:1 into Avios (30,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on American Express Platinum is increased from 50,000 Membership Rewards points to a huge 80,000 points. Points convert 1:1 into Avios (80,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & four airport lounge passes Read our full review

British Airways American Express Premium Plus

30,000 Avios and the famous annual 2-4-1 voucher Read our full review

The Platinum Card from American Express

80,000 bonus points and great travel benefits – for a large fee Read our full review

Virgin Atlantic Reward+ Mastercard

18,000 bonus points and 1.5 points for every £1 you spend Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

American Express Business Platinum

50,000 points when you sign-up and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Capital on Tap Pro Visa

10,500 points (=10,500 Avios) plus good benefits Read our full review

Capital on Tap Visa

NO annual fee, NO FX fees and points worth 1 Avios per £1 Read our full review

British Airways American Express Accelerating Business

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review