Lufthansa has taken a lead over other major airlines in the UK and launched a new co-branded charge card. The new card is actually two cards: one is a Diners Club card issued by Affiniture Cards Ltd, the second card is Mastercard issued by Cornercard UK Ltd for Affiniture Cards. This odd split is because Affiniture does not have a legal license to offer Mastercard branded cards to its customers. The new Miles & More Global Traveller Card is now taking applications.
The development breaths new life into the UK co-branded card market, which was decimated after the introduction of a cap on Interchange fees earlier in the year.
It’s Not A Credit Card
The new cards are not a credit card, they are a charge card. This means you will have to pay your balance off in full at the end of every month. There is no percentage minimum payment, and failure to pay off the card in full would result in your credit rating taking a hit.
As mentioned earlier you will be issued with two physical cards: a Diners Club card, and a Mastercard. One of the oddities of the setup is that the Mastercard is labeled a prepaid card. However, this does not mean that you have to pre-load the card up before spending, all that happens is that every transaction is subject to 2 approval procedures.
Every time you make a purchase, a transaction from your Diners Club card to the Mastercard will be approved, a few seconds before the second approval on the Mastercard. Theoretically, this complex procedure should not affect you in real life, although there probably will be more declined transactions due to communication issues.
Sign Up Bonus
The typical bonus for the card will be 5,000 bonus Miles & More miles, however, through December 31, 2018, a welcome bonus of 10,000 miles is on offer. To earn the bonus all you need to do is spend on the card once.
The card carries a £79 annual fee, which puts the card squarely in the mid-market segment. It is not waived for the first year.
A stand out feature of the card is that provides lounge access to over 800 Dinners Club Lounges around the world. Unfortunately, access is not free, which comes as no surprise from a card with a £79 annual fee. Lounge access will set you back £15 per person per visit, and you can bring in guests, although the number is determined by individual lounges.
The earning rates with the cards are pretty attractive and are almost industry-leading (in the UK at least). You will earn 1.25 Miles & More miles for every £1 spent. This is a pretty good rate of return, and more importantly, re-opens the door to earning Lufthansa miles in the UK.
Foreign Transaction Fees
This card will not be your go-to card for spending abroad. The card carries a 2.99% foreign transaction fee which makes its use overseas unattractive.
A Note About Dinners Club
Outside of the US, Dinners Club is not as widely accepted especially in Europe, and many people will have never held a Diners Club card. This should have little impact on your decision to apply for the card or not. The accompanying Mastercard is widely accepted globally, so you can still use your card with the same ease. In all likelihood, most people who get the card will simply toss the Dinners Club card in the drawer and only use the Mastercard.
Who Should Consider The New Lufthansa Card?
If you are a regular Lufthansa flyer based in the UK this is almost a must-have card. Earning Miles & More miles outside of flying is pretty difficult, and you can’t even buy Lufthansa miles to get close to a redemption. Like it’s predecessor this card means you can now earn miles for everyday spending.
Lufthansa has a strict mile expiration policy; award miles expire after 36 months and there is no option to reinstate them. This policy is waived for Elite status members. One of the perks enjoyed by holders of Lufthansa co-branded cards in various countries is that the award miles in their account are no longer subject to the company’s very strict expiration policy. Keeping a healthy balance of Miles & More miles alive is easily worth the £79 annual fee alone.
This card has the potential to be a gem, although I only fly Lufthansa once or twice a year I will be signing up for the card. I don’t hold Elite status with Lufthansa but I do have a big balance of miles that is working its way towards a First-class transatlantic redemption.
The card would join a stable of cards, but it would not become my everyday spending card. Once I have met spending thresholds on other cards to trigger specific benefits (free night certificates, bonus points), I can direct my spending to the Lufthansa card and boost my Miles balance.
Hopefully, this new card will spur the co-branded credit card market in the UK into life. After all, if Lufthansa can make a co-branded card work, why can’t the likes of Hilton, United, Delta, Emirates, and American Airlines do the same!