How to collect points on your spending and use them to book flights with budget airlines:
Edit (13/11/18): It has been announced that the Nectar – Expedia partnership will end on 18th Dec 2018, which means this approach is no longer possible. June 2020: See our American Express Gold post for other opportunities to use points for flights or our new post about using Amex points specifically for Easyjet flights.
If you don’t live in London and don’t often fly long haul, then you may have found that achieving good airmile/reward points value against a flight that’s actually convenient can be tricky. Options are often much more limited at regional airports, with budget airlines dominating schedules and Avios a seemingly foreign currency!
Whilst most budget airlines don’t operate their own points scheme, there are some partner schemes which allow you to redeem points. For example Emirates Skywards points can be redeemed against EasyJet flights. However, if you do the maths you’ll find you’ll struggle to get above 0.3-0.4p per point against a demand based pricing model. In this case, assuming you’re starting with Amex Membership Reward points, you’d be just as well charging the flights to your card and taking the 0.4p per point statement credit.
However, it appears that there is actually a travel hack to earn at least 1p for every £ spent to use flexibly against budget airline flights, including taxes, and the missing link here is actually the Nectar American Express card.
Whilst the Nectar Mastercard offers just 1 Nectar point per £5 spent, The American Express Nectar Credit Card offers 10 times that at an excellent 2 Nectar points for every £1 spent, plus a 20,000 points bonus after £2,000 spend in the first 3 months (21,000 points if you use our referral link). These points carry a consistent value of 0.5p. They can be used against boring stuff like shopping(!), but if it’s travel you’re interested in, they can also be redeemed as an Expedia voucher at the same value. Expedia vouchers can then be used against any flights, or hotels, booked through Expedia. At 2 points per £ spent, this means you can earn a consistent 1% on spending to redeem against the full flight or hotel price across a range of options. This increases to over 6% with the bonus on the first £2,000. There are some restrictions to note, for example you can’t redeem against a one-way flight, and for hotel bookings any hotel status you have won’t be recognised, but you’ll have far more flexibility than you would with most air miles (although obviously you won’t earn many by actually flying!!). In some cases you’ll also pay a marginally higher flight price, so this is worth checking and factoring in (I tested a some number of Easyjet examples and found that in places the Expedia price ranged from £5-10 more on a return flight). Where this is the case you might decide it’s better to use the Nectar points for the boring groceries after all, and then to use the cash you saved on booking direct – but psychologically we all know there’s something nice about saving points for treats and travel!
Bonus aside, as an ongoing earning rate this card is a fairly decent option, particularly when you consider that the rate increases to 4 pts (2p) per £ spent when you use it with your Nectar card with Nectar partners.
With the bonus, which equates to £100, a £2000 spend would give you £120 to use against a travel booking (£125 if you use our referral link). If you’re flexible with your dates, this is likely enough for a return EasyJet flight from a regional airport to a number of destinations. The bonus itself isn’t as generous as the Amex Preferred Rewards Gold Credit Card, but as this is in a different card ‘family’ you can access this in addition to the gold card.
Using American Express Membership Reward points in this way isn’t really an alternative option, as these only convert to Nectar at 1:1, which brings it back down to 0.5p per £ spent. So the Nectar points need to be acquired directly to make it stack up. The other similar approach would be to use the Amex Platinum Cashback Credit Card and save the 1% cashback, and £125 bonus, to use against travel – for me the opportunity to frequently earn more than the base 2 Nectar points (through offers and Nectar partners) meant the Nectar card was preferable though, as this has the potential to push it over 1%. However, again they are in different card families, so you have the option to hit both bonuses over time.
The Nectar Credit Card is free in year one, £25 per year thereafter, and can be cancelled at any point. The APR is 28.2%, as usual with reward cards this only stacks up if you’re planning to pay your statement in full each month.
If you’d like a referral please use our link for 2,000 additional bonus points (click here) you can also contact me via: takemetothepoints(at)gmail.com
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N.B. Disclaimer: This is an amateur blog. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances.