Earn Avios on Bills
As a general rule, I try to put as much of my monthly expenditure as possible through reward credit cards, particularly American Express. By doing that, I ensure I earn something back on everything I spend. It’s far more difficult to do this on more fixed monthly outgoings such as utility bills and council tax, however there is actually a rewards current account which you can use to earn Avios points on your direct debits.
The NatWest reward current account pays 2% back in rewards when you pay your bills via Direct Debit. For a £2 monthly fee, you earn 2% back on your water, council tax, gas, electric, broadband, TV. You can also earn 1% on debit card purchases with selected retailers. The 2% however, is the cash value of those rewards – i.e. this is what you’ll get if you ‘cash in’ your rewards balance as a credit into your account. A useful feature of the account is that instead of cashing this in, you can ‘trade up’ your balance for gift vouchers or for Avios points.
£10 in Rewards gets you 1170 Avios points, so based on a common valuation of 1p/point (although it is possible to do much better than that), you’re upgrading your return to at least 2.17% or paying 0.85p/Avios – which is a decent deal.
My monthly direct debits for all eligible bills equates to about £500 – so each month I get a rewards credit of about £10, which I can trade up for 1,170 Avios. That means that every 3-4 months, I’m earning enough points (4,000) for an off peak British Airways Reward Saver Flight to Paris, Copenhagen, Amsterdam or Milan… just by paying those bills by direct debit! (there’s a calculator on their website which lets you work out what you’d earn in rewards per month: NatWest Calculator)
There is also an option for 2,350 Avios points for £20 or 5,870 Avios points for £50. Whilst these are marginally better (about 5 extra Avios per £10), I generally feel that’s outweighed by the risk that the offer might change or not be available by the time I’ve sat on my balance and waited until I have enough credit.
For more about using Avios for BA flights see the flights section of my post here, or use the BA reward calculator here. Note that taxes and fees apply – for the zone one routes mentioned above (Paris, etc.), this is £17.50.
If you haven’t already had an Amex Gold Card, potentially if you paid your bills via NatWest Rewards and put your spending via Amex Gold, you could earn up to 30,000 Avios in 3 months (27,000 via Amex, 3,000 via NatWest) – enough to get a return reward saver ticket to New York or Toronto!
Of course if your personal valuation of the Avios points is not as high, then you have the option of taking the cash or trading up for something else. Other current offers include the option to exchange £7.50 for £10 Currys PC World voucher or £10 rewards for a £15 Pizza Express voucher.
One small note of caution – the Avios offer has come and gone before, so is not guaranteed to always remain available. In addition it takes 35 days for a reward credit to process once a bill is paid, so a new account holder would be relying on the Avios offer still being active in a month’s time.
That said, there’s also a very decent £175 incentive for switching and the worst case scenario is that you end up taking the cash rather than the Avios – which would hardly be the end of the world. If you’re interested in trying this I also have to say that I’ve switched current accounts a couple of times before, and nowadays it’s a very straightforward process.