Britons could find their Airmiles grounded

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By Rachel Jones
Know Your Money Editor

Britons who have been adding to their Airmiles in order to grab themselves a getaway from the stresses of the credit crunch could find themselves without a holiday and out of pocket. Airmiles is planning to write to 1.7 million customers who have not collected anything under the scheme for the past two years. If they fail to get their hands on any more Airmiles within the next six months the company claims it will shut down their accounts. However, the announcement has been met with criticism from many individuals, because people who do have their accounts closed will lose the credits that they have so far collected - taking away any holiday they had hopes of bagging.

So where does this leave those who want to keep their Airmiles stashed away safely?

Credit-crunched Britons staying put

Under the terms and conditions of the scheme, the company states that "we may at any time put a time limit on how long you have to spend any Airmiles and we may decide to amend the limit from time to time and will give customers reasonable notice".

Spokesperson Susan Barber tells the Telegraph that rather than penalising its customers, the firm merely wants to highlight the benefits that Britons can enjoy from the scheme.

But Graham Donoghue, managing director at TravelSupermarket, tells the newspaper: "This is not a great message that Airmiles is sending out in the current economic environment. It's like one of the big supermarkets taking away your loyalty points just because you have not shopped there for a while."

As well as collecting new points, customers are being urged to also spend the ones they have already shored up within the next six months. But Britons wary about leaving the UK during the current credit crunch can put their Airmiles to other use, such as purchasing theme park and theatre tickets. However, with the purse strings of households up and down the UK tightened, individuals may not have the money to accrue any more points. As such, savvy savers may find themselves losing their carefully collected Airmiles simply for being prudent. Points are collected by spending at retailers such as Debenhams, but as the recession continues to squeeze consumers, collecting Airmiles could be pushed further down the financial list of priorities of Britons.

Are Airmiles the number one priority?

Almost a third of Britons believe that their disposable income will take a nosedive over the coming months, a new poll reveals. Around 42 per cent of people think they will no longer be able to fork out for luxury goods, while 34 per cent believe that their good saving habits will have to be scrapped, Virgin Money claims. One in ten Britons think it will be an uphill struggle to keep up with mortgage and insurance payments, while one in five believe they will have to put a stop to splashing the cash on new clothes, the research finds. As such, collecting Airmiles may become increasingly tricky for consumers who are avoiding the high street in an effort to save their money until the economic storm clouds pass.

Commenting on such spending habits, Rob Clifford, UK managing director of Virgin Money, states: "With 29 per cent of workers expecting a drop in disposable income over the next three months and next year, it is clear there is a mood of caution throughout the country.

"The biggest losers in the next three months are likely to be any company operating in luxury goods such as consumer technology manufacturers and retailers, jewellers and designer clothing brands. However, supermarkets have less to worry about and car and home insurers are less likely to feel the pressure."

But he points out that not everyone is suffering the same and many are spending, but simply being more careful about their cash and credit card habits.

Holiday hopes on the up

Individuals who are still interested in looking for ways to get their hands on flights may want to consider the Virgin Atlantic travel credit card. With a zero per cent balance transfer rate for six months and an annual percentage rate (APR) of 17.9 per cent, Britons could pile their purchases on the plastic to avoid dipping into their savings or cutting back on spending altogether. People can top up their miles and redeem them for flights and could enjoy a much-needed getaway from the economic doom and gloom. The American Express British Airways Credit Card has a zero per cent fee on balance transfers and an APR of 19.9 per cent. For more information on travel cards, consumers should visit .

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