30,000 bonus points and no annual fee for your first year: A review of the Preferred Rewards Gold Credit Card from American Express

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Earning Membership Rewards, the currency of American Express, can be a great way to earn valuable points, which can then be redeemed to reduce the cost of your travel or make it far more comfortable.

There are a number of different American Express cards on offer in the U.K., and the choices can sometimes be confusing.

So, where to start?

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. Let’s take a look at the specifics.

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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, providing a more affordable way to get into points and miles.

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 cardholder, you’ll earn a huge 30,000 Membership Rewards points after spending £3,000 on the card in the first three months. Based on TPG U.K.’s monthly valuation of Membership Rewards points, that welcome bonus is worth £420, which is an amazing deal considering there is no annual fee for the first year.

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

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 59.9% variable and a purchase rate of 24.5% 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. There is also a 2.99% foreign transaction fee for any purchases in currencies other than GBP.

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 As such, you’ll earn Membership Rewards points at the following rates:

  • 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.

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

Unfortunately, it’s not the greatest earning structure. It’s bizarre that Amex offers a 2x bonus category for foreign transactions but then charges a 2.99% fee for those same purchases. The amount that you’ll pay in fees will largely offset any value you’d get from the bonus points.

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 programmes. Many conversions are at an easy 1:1 ratio 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 Virgin Points.

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 at a transfer rate of 1:1:

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

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 — 2,000 Membership Rewards points = 3,000 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 to 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 Priority Pass network, which boasts more than 1,200 lounges worldwide.

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, 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)$100 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 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 U.K. 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 for beginners, especially in the first year of card membership with its huge 30,000 Membership Rewards points as a welcome bonus with no annual fee. 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.

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.