Credit card review: The Preferred Rewards Gold Credit Card from American Express UK

Mar 17, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

Limited-time offer: Earn 20,000 Membership Rewards points when you spend £3,000 in your first three months of cardmembership. Offer ends 29 June 2020. Terms apply.

Earning Membership Rewards, the currency of American Express, can be a great way to rack up points, which can then be redeemed for valuable rewards. There are a number of different American Express cards on offer in the U.K., and the choices can sometimes be confusing.

Fortunately, American Express has designed a card that’s marketed towards anyone new to rewards credit cards. The Preferred Rewards Gold Credit Card provides a great first step to earning points that can be redeemed for free travel.

In This Post

Who is this card for?

If you’ve ever considered applying for a credit card to start earning rewards but may have been daunted by confusing features, earning structures or high fees, this card could be a good place to start. It was the first credit card I applied for in the U.K.

It’s especially appealing for beginners because no minimum income is needed in order to be approved for the card. Plus, the annual fee is waived for the first year of cardmembership.

Welcome bonus and annual fee

Many U.K. American Express cards do have annual fees, and this card is one of them. It carries an annual fee of £140, though fortunately, this annual fee is waived for the first year.

If you apply for and are approved for the Preferred Rewards Gold Card, as an eligible new cardmember, you’ll earn an elevated 20,000 Membership Rewards points after spending £3,000 in the first three months. This elevated offer replaces the usual 10,000-point welcome bonus. The 20,000-point offer ends 29 June 2020 and terms apply.

If you already hold an American Express card in the U.K., be sure to note the Amex restrictions on welcome bonuses.

In all, £3,000 in the first three months is a fairly low minimum spend to meet given how many retailers in the U.K. accept Amex. Based on TPG U.K.’s monthly valuation of Membership Rewards points, that welcome bonus is worth £280, which is a great deal considering there is no annual fee for the first year.

You’ll also earn an additional 10,000 Membership Rewards points for each year of card membership so long as you spend £15,000 during that 12-month membership year period. The prospect of earning an additional 10,000 points roughly offsets the annual fee payable in the second and subsequent years.

This card has a representative APR of 57.6% variable and a purchase rate of 22.9% variable with an assumed credit limit of £1,200. While adding the first supplementary cardholder is free, each additional supplementary cardholder comes with a £45 annual fee.

Related: Should your partner get a supplementary card or their own card?

Earning

The Preferred Rewards Gold Card is all about simplicity and no hidden surprises, so earn rates are as easy as 3-2-1:

  • You’ll get 3 Membership Rewards points per £1 spent on the American Express Travel portal;
  • You’ll get 2 points per £1 spent directly with airlines or spent in any currency other than pound sterling. Though do note that these foreign currency purchases will be subject to a 2.99% fee, which negates much of the point-earning benefit; and
  • You’ll get 1 point per £1 spent on all other purchases.

Related: The best UK miles and points credit cards of 2020

Redeeming

The best thing about Membership Rewards points is that they’re what’s called a transferable currency, meaning you can convert them into various other loyalty points. Many conversions are at an easy 1:1 rate to programmes like British Airways Executive Club or Virgin Atlantic Flying Club. So 1,000 Membership Rewards points can be converted to 1,000 Avios or Flying Club miles.

Related: How and when are Membership Rewards points credited to your account?

Along with British Airways Executive Club and Virgin Atlantic Flying Club, the following frequent flyer programmes are also transfer partners of the Amex Membership Rewards programme: Alitalia MilleMiglia (1:1), Asia Miles (1:1), Delta SkyMiles (1:1), Emirates Skywards (1:1), Etihad Guest (1:1), Finnair Plus (1:1), Air France-KLM Flying Blue (1:1), Iberia Plus (1:1), SAS EuroBonus (1:1) and Singapore KrisFlyer (1:1).

The Amex Membership Rewards programme isn’t limited to just airlines. You could also elect to convert the Membership Rewards points to hotel loyalty points in the following programmes:

  • Hilton Honors — 1,000 Membership Rewards points = 2,000 Honors points; or
  • Marriott Bonvoy — 1,000 Membership Rewards points = 1,500 Bonvoy points; or
  • Radisson Rewards — 1,000 Membership Rewards points = 3,000 Radisson points.

You can also choose to redeem Membership Rewards points for an Amazon or Marks & Spencer Gift Card. But here at TPG, we love travel, so we think you can get more value using the points for travel instead.

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

(Photo courtesy of Hilton London Bankside)
(Photo courtesy of Hilton London Bankside)

Perks

The Preferred Rewards Gold Card comes with a perk to make the airport experience more enjoyable. Even if you don’t have elite status with any airline, this card comes with two airport lounge visit passes each year. The visits must be made in the Lounge Club network, which boasts more than 700 lounges worldwide. Member lounges include the No1 Lounges at London Gatwick (LGW) and Plaza Premium lounges at Heathrow Airport (LHR), among others.

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

If you’re booking hotel accommodations through the American Express Travel portal to earn those 3 points per £1, you’ll also get additional perks on top of the bonus earnings. Bookings made through the portal as part of The Hotel Collection can receive a room upgrade (where available) and (US)$75 hotel credit, as long as the stay is a minimum of two nights and at one of 500 participating hotels, including Hiltons, Hyatts and Intercontinentals.

If you hire cars at home or abroad, this card will provide you with Hertz Gold Plus Rewards status. The status provides you with a free additional driver, 10% off rental bookings and one-car class upgrades on rentals of five consecutive days or more (if available).

If you run into issues when travelling, the Preferred Rewards Gold Card can help to make dealing with them easier. The card comes with travel inconvenience and travel accident protection for the primary cardholder, as well as any supplementary cardholders. It also comes with 24/7 global travel assistance when you are travelling abroad.

Keep in mind that some of these benefits, such as the insurances, are subject to enrollment.

Which cards compete with this card?

Given the generous welcome bonus, this card is comparable to the British Airways American Express Premium Plus Card, which is a great all-round value airline credit card in the UK. While this Gold Card doesn’t have the valuable British Airways 2-4-1 Companion Voucher option, it does waive the annual fee for the first year.

If you’re new to the world of credit card points, then the Preferred Rewards Gold Card could be a good place to start before later considering the British Airways American Express Premium Card. Its status as a flexible currency and allowing cardmembers to transfer their points to any partner that best suits their needs is an appealing offering — especially for those who are new to the credit card rewards space.

Bottom line

This card is a great offering, especially in the first year of card membership with its generous 20,000 Membership Rewards points as a limited-time only welcome bonus. American Express has good acceptance rate at retailers across the U.K., and can be used abroad. Although keep in mind that while you will earn points for your purchases abroad, the foreign transaction fees will cancel out much of the benefit.

Nonetheless, the generous welcome bonus, no annual fee in the first year and flexible points currency can make this card a good starting point for your American Express portfolio.

You can apply for the card here.

Featured photo by John Gribben / 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.