Something Ventured, At Most 2% Gained

      No Comments on Something Ventured, At Most 2% Gained

So what about those cards which earn “double miles, any airline, any time” like the Capital One Venture? Sounds awesome. Are they any fucking good, like Alec Baldwin says in the ads? Kinda: they’re simple and flexible as promised, but not super rewarding. They pay off a little better than Chase or Amex cards for cheap and moderately priced tickets, but they pay off quite badly for expensive tickets. The “miles” these cards earn are really points, which can be used as currency, pinned to the cash price of a ticket. The “miles” (points) can’t be transferred to actual frequent flyer miles with any airline, like Chase and Amex and Citi and SPG points can, so you miss out on kick-ass award tickets.

The two most prominent cards, or at least the two I’m most aware of, are the Capital One Venture, and the Barclaycard Arrival Plus. These both pretty much do the same thing, which is give you 2 points (which they call “miles”) for every dollar you spend. You can then use those points for travel purchases at 1 point per $0.01 of travel purchase, either by booking through the card’s web site, or by getting reimbursed for travel purchases on the card. (There’s other variations on the theme like the BankAmericard Travel Rewards card and the Discover it card, as well as cards from U.S. Bank, Wells Fargo, etc. It’s all the same shit: they’re ok, but your ability to get super sweet deals is limited.)

The Cap One and Barclaycard are mostly the same — they both come with a 40,000 point signup bonus. Both have no foreign transaction fee. They both have an annual fee that’s waived the first year: $59 for Venture, $89 for Arrival Plus. There are other minor differences, but the main story is: They both get you around 2% “travel back” on your spending, and you cannot transfer the points from these cards to any airline or hotel program.

Basically, the points on these cards are not terribly valuable, since points are most valuable when you transfer them to airline or hotel frequent traveler programs. However, it’s easier to earn the points on these cards than it is on other cards; you accumulate the points faster. And you can use them for almost any kind of travel. So that somewhat evens things out when ticket prices are low to moderate. But you’re not going to get any crazy award travel redemptions, because, unlike award tickets on United, American, and international carriers, the amount of points you need is pinned to the cost in cash. So it’s advantageous to use these points when it would make sense to otherwise use cash, because the points effectively are cash. And, like cash, the points can be used for any travel expenses.

So these cards are flexible and simple, and the redemptions are decent, at a solid 2% (or 2.11%) of your spending returned to you for travel. That’s the minimum you’d hope to get for saver award tickets anyway, except with these cards, you can buy any ticket, at any time, on any airline, not only when saver awards are available on a specific airline.

Where these cards are weak is when tickets are expensive. For example, if you want an international first class ticket to Europe on United that costs $5,000, you’ll have to have spent $250,000 on one of these cards to earn that, as opposed to spending $106,000 (if you can find saver seats) or $218,000 (if you can’t) on a Chase Freedom Unlimited. It gets even worse if you want to fly business or first on one of the deluxe carriers like Cathay Pacific or Singapore, where the cash price of tickets can be $10,000 and up.

You also can’t easily combine the “miles” (points) you earn on these cards with actual frequent flyer miles. If I’ve got 100,000 Venture points, and 15,000 United miles, I have to buy the whole ticket with Venture points, and wait until I’ve earned enough MileagePlus miles from flying to get an award ticket at United.

Even for moderately priced tickets, there are better alternatives. If you really want 2% cash back, you can actually just get 2% cash back from the Citi Double Cash card, and use it for anything you like, not just travel. And there’s no annual fee, though there is a 3% foreign transaction fee, and no signup bonus. You could also could consider the American Express Blue Cash Preferred card, which offers 3% cash back for gas and department stores and 6% for supermarkets, or the Amazon Prime Store card, which offers 5% cash back on all Amazon purchases.

If you want actual travel rewards, you’ll do much better with Chase Ultimate Rewards. I know, you’ve heard me fucking go on and on about this. But ‘strue. If you use a Sapphire Preferred for restaurants, travel, transportation, and lodging, and a Freedom Unlimited for everything else, you can earn close to or better than 2% for “any airline, any time”, or at least 1.5% as cash back. But you can also transfer the points to frequent flyer or hotel guest programs, where you can potentially do much better. And you can easily combine points among family members. Even Amex Membership Rewards can get you a minimum of 1.5% back for “any airline, any time” travel (if you put at least 30 charges a month on an Everyday Preferred card) while still giving you a bunch of airline and hotel transfer options.

My feeling about the Venture and Arrival Plus cards is: meh. These cards are glorified cash back, and only their ease of earning points recommends them compared to the Sapphire Preferred/Freedom Unlimited combo. But if you want something simple and flexible with a good signup bonus and no foreign transaction fees, you can certainly do worse. Just don’t expect great awards.

If at some point in the future United and American start keying their award redemptions to current ticket price, as Delta partially has and JetBlue and Virgin Atlantic thoroughly have, then these “travel back” cards probably become more attractive, because single-airline loyalty will be worth less, and you won’t be able to get stellar award deals anymore for any domestic travel. Until then, I’m sticking with my Chase Ultimate Rewards points.

Leave a Reply

Your email address will not be published. Required fields are marked *