6 reasons the Preferred Rewards Gold Card was my first UK credit card

May 11, 2021

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If you are new to collecting valuable points and miles, or just looking to boost your account balances, one of the easiest ways to do this is with a credit card that earns points and miles. There are plenty of card options and a sometimes confusing number of loyalty programmes, transfer partners and bonus offers.

Today, I want to share my experience about how I went about selecting my first U.K. credit card, why I chose the Preferred Rewards Gold Card from American Express U.K. and why I think could be a good choice for beginners.

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In This Post

1. No annual fee for the first year

Some credit cards charge high annual fees in exchange for a host of benefits like lounge memberships, elite hotel status and travel insurance. Dipping my toe into a U.K. credit card for the first time, I found the idea of a high annual fee daunting. How would I know if I even really liked the card before using it?

The Preferred Rewards Gold Card has no annual fee for the first year, which I considered to be a very low-risk way to start using a U.K. credit card. I could continue to earn rewards and take advantage of the card’s benefits before determining if I wanted to keep the card for a second year. For the second year and each subsequent year, you’ll pay a £140 annual fee.

This card has a representative APR of 56.6% variable and a purchase rate of 22.2% variable with an assumed credit limit of £1,200.

Related: Everything you need to know about credit card representative examples, purchase rates and APR

2. A welcome bonus of 20,000 Membership Rewards points

Even though I wasn’t paying an annual fee in the first year, I liked the idea of earning a big welcome bonus of 20,000 Membership Rewards points by spending £3,000 in the first three months of card membership. I found the minimum spend relatively easy to meet — it works out at about £30 per day, and I’ve found plenty of merchants in the U.K. accept American Express.

This card was offering 20,000 points as a welcome bonus when I applied for the card several years ago, as is currently offering the same bonus to new applicants.

Those 20,000 points are worth £280, based on TPG’s most recent valuation of Membership Rewards points. Based on the value you can get from those points, I considered that I would be coming out well ahead, especially considering the lack of annual fee in the first year.

3. Plenty of flexible uses for Membership Rewards points

The reason you can get so much value out of those 20,000 Membership Rewards points is because they have so many uses. Starting out in the U.K. points and miles game, I knew about the big players like British Airways and Virgin Atlantic and their associated loyalty programmes, though I wasn’t 100% sure which airline or programme I wanted to focus on. The great thing about Membership Rewards points is that there are lots of different ways to use the points you’re earning with credit cards like these.

You can transfer American Express Membership Rewards points to any of the following programmes at a 1:1 rate (meaning 1 Membership Rewards point becomes one airline point/mile):

  • Alitalia MilleMiglia;
  • Asia Miles;
  • British Airways Avios;
  • Delta SkyMiles;
  • Emirates Skywards;
  • Etihad Guest;
  • Finnair Plus;
  • Air France-KLM Flying Blue;
  • Iberia Plus;
  • Qantas Points;
  • SAS EuroBonus; and
  • Virgin Atlantic Flying Club.

You can also transfer to Singapore Airlines KrisFlyer, at a rate of 3:2.

What I’ve also found great about Membership Rewards is you can choose when, where and how many points you want to transfer at any time. Even once I found a transfer programme I liked, I wasn’t obligated to be locked into that programme and send all my Membership Rewards points there forever — I could transfer my points to any programme on that list and switch whenever I liked.

In case you were wondering, I ended up transferring most of my Membership Rewards earned from that card to British Airways Avios as I really liked (and still do!) its Rewards Flight Saver offer to Europe. I have since also learned the excellent value to be found in the Flying Club and Flying Blue programmes, so have also been transferring Membership Rewards points there over the years.

If you aren’t sure which airline loyalty programme is best for you, it’s great to have options while you learn more about the programmes. You can also transfer your Membership Rewards points to hotel programmes, but I quickly learned this wasn’t as valuable as transferring to airline programmes. You can also transfer Amex points to Hilton Honors (1:2), Marriott Bonvoy (2:3) and Radisson Rewards (1:3).

Related: 5 ways to use Membership Rewards points that you might not know exist

(Photo by Josh Gribben/The Points Guy)

4. 2 free lounge passes

I had no elite status with any airline when I was considering my first U.K. credit card, so had no easy way to make my travel more comfortable with airport lounge access. The Preferred Rewards Gold Card comes with two free lounge passes each year of cardmembership to your choice of more than 1,200 lounges globally in the Priority Pass network.

I’ve really enjoyed some of the lounges included in this programme and if you’ve ever wondered what is behind those closed doors while you’re waiting for your flight, this is a great way to try them out. Many airport lounges may be closed right now but the lounge passes are valid for a year — when airport travel should be a lot more normal than it is right now.

Related: How early should you arrive at the airport before your flight if you have lounge access?

5. A straightforward and attractive points earning rate

As I researched how many points I would earn for my everyday purchases with U.K. credit cards, I was dismayed to realise some cards earn less than one point per £1 spent. This seemed like it almost wasn’t worth my time having the card.

The Preferred Rewards Gold Card has a simple and very solid earning rate:

  • 3 points per £1 spent directly with American Express Travel;
  • 2 points per £1 spent directly with airlines, and for any purchases in currencies other than GBP; and
  • 1 point per £1 spent on all other purchases.

This means I was earning one valuable Membership Rewards point per £1 on normal purchases, with bonus points for my travel spend, which at the time, pre-pandemic, was substantial.

I didn’t use the card for purchases in foreign currencies because it charges a pesky 2.99% foreign transaction fee (as most rewards-earning U.K. credit cards do). I consider this fee to be worth more than the value of the points I would be earning from the purchase.

6. Evolving offers and benefits

This card is now better than ever before. From 6 May 2021, new and existing cardmembers will receive a £5 Deliveroo credit, twice a month, every month. This means over the course of a year, you’d save £120 on Deliveroo deliveries by paying for your order with the Gold Card. Even if you have this card beyond the first year, this offer alone could almost offset the annual fee just by eating delicious food each month.

Related: American Express adds £10 monthly Deliveroo credit to Gold Card

Additionally, American Express offers Amex Offers, which are a way for cardholders to save extra cash or earn bonus points and miles for purchases at select retailers. The Amex Offers available at any one time change often and are best to be monitored to ensure you’re not leaving any bonus points or savings on the table.

Related: Your ultimate guide to Amex Offers

Bottom line

The Preferred Rewards Gold Card was the first U.K. credit card I ever applied for, was approved for and used. I considered it was a good choice for me at the time, and still hold that belief.

I especially liked the fact it did not have an annual fee in the first year but still offered a big welcome bonus that I used to transfer to Avios and reduce the cost of my travel. I’ve learned a lot about U.K. credit cards and travel loyalty programmes since that time and still think this card was a good choice for me as a beginner.

You can apply for the card here.

Featured image by Liam Spencer / The Points Guy

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.