HSBC UK Reward Points Program Devalued by 50%

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HSBC UK has been sending out letters to holders of the HSBC Premier Credit Card informing them of an upcoming devaluation in their rewards system.

HSBC is citing the recent changes in EU legislation as the reason why it is halving the redemption value of reward points earned on purchases. The EU rules, which kicked in in October, limit the interchange rate (the amount that credit card issuers can charged shops/stores/retailers) to 0.3% on credit cards and 0.2% on debit cards.

The letter from HSBC says:

We’ve made the difficult decision to halve the value of Rewards Points earned on new purchases made in the UK from 21 January 2016. The redemption value of Reward Points earned on new purchases made outside of the UK won’t be affected.

All reward points earned before this date will retain their current redemption value.

That’s not all the negative changes either.

The letter goes on to say:

You’ll no longer be able to redeem your Reward Points against the cost of flights or holidays purchased with your HSBC Premier Credit Card.

HSBC is also “simplifying” the structure of how Reward Points are earned.

From 21 January 2016 HSBC Premier Credit Card users will earn 1 point for every £1 of eligible spend in the UK and 2 points for every £1 of eligible spend outside the UK.

This is what the changes look like in tabular form:



It’s not surprising to see the points earning maintained on overseas spend as HSBC charges customers a 2.99% foreign transaction fee. On top of that the may well make something off the exchange rate spread as well so they’re not exactly losing out.

A sign of just how poor the UK market is for consumers looking to earn Avios on credit card spend is the fact that, despite the devaluation, the HSBC Premier card still remains the best Avios earning non-Amex Card on the market.

HSBC Premier Mastercard UK

The comparison:

  • HSBC UK Premier Mastercard – 0.5 Avios per £1 spend
  • Lloyds Premier Avios Rewards – 0.3 Avios/£1
  • Tesco Clubcard Mastercard – 0.3 Avios/£1
  • Lloyds Avios Rewards Card – 0.25 Avios /£1
  • TSB Premier Avios Mastercard – 0.25 Avios/£1
  • Lloyds Choice Rewards Card – 0.2 Avios/£1
  • TSB Avios Mastercard – 0.2 Avios/£1

Its important to remember that the points you already have in the bank will still convert to Avios (or whatever other partner you wish to exchange into) at the original rate so there’s no need for any mad rush to convert your points. That’s a small silver lining to a very dark cloud.