For Avios collectors, spending abroad using a BA American Express card is an obvious choice to rack up those miles. Or is it..?
The base fees
When you spend abroad, American Express charges a fee of 2.99%. Foreign exchange market prices move throughout the day. However, American Express set a single daily benchmark rate, and they do so at a relatively high price level. From August to December 2019, for EUR and USD, they added an extra 0.5% over the interbank average price (average of intraday high and low). So on average, you’ll pay a 3.5% charge for using your Amex card abroad.
Currensea, by comparison, charges just 0.5% over interbank rates for the core currencies (see how we compare).
The key question is, how many Avios could you buy directly from the BA website using this 3% difference in charges? The answer is surprising.
The cost of Avios
The Standard BA Amex card
$6.5k (£5k) spent abroad will earn you 5,000 Avios. But you will be charged £175 in international transaction fees for those Avios.
With Currensea, a mark up of 0.5% is equal to the charge of £25 – a difference in fees of £150. Using these £150, you can buy 9036 Avios directly from BA, i.e. 81% more than using the BA Amex.
In the January BA sale, £150 would buy you 11,747 Avios – a massive 135% more.
The Premium Plus BA Amex card
$13k abroad (£10k) will earn you 15,000 Avios. But you will be charged £350 in international transaction.
With a Currensea card, the charge would be £50. The £300 difference in charges would buy you 18,072 Avios or 23,494 at sale prices. Again, that’s either 20% more, or 57% more.
The 2 for 1 voucher
The other important value of a BA Amex card is the 2 for 1 voucher, which needs to be taken into account.
Premium card strategy
If you spend enough to justify a £195 annual card fee, then you’re likely to be spending more than £835 per month in the UK. Use your Amex in the UK to maximise Avios and get the voucher, and use your Currensea card abroad to make hefty savings and buy your Avios from BA directly.
Standard card strategy
If you spend over £20k per annum in GBP, it makes sense to pay the £195 to upgrade to the premium card. Why? The extra 0.5 Avios per £ will give you at least an extra 10,000, worth £175. You’ll also get an extra year on the voucher. But the same strategy applies for international spend: use your Currensea card abroad and buy directly with the savings.
If you don’t spend £20k per annum, you should use your Amex in the UK for points, and use your Currensea card abroad and buy Avios with the savings.