There are typically two types of rewards credit cards: cash back credit cards and travel rewards cards. If you’re a jet-setter, a travel rewards card is probably most appealing; if you’re a homebody, cash back is the way to go.
But what if you want both? While the Capital One Venture Rewards Card is marketed as a travel rewards card, savvy users will find that it’s actually a very good cash back card as well – thus making it an impressive “combo” card.
How to Use Capital One Miles
Like an airline, Capital One uses the term “miles” to refer to their loyalty points. Nevertheless, these miles can be redeemed for one cent each as a statement credit towards any travel related expense. Cardmembers simply log on to their account, select the hotel, airfare, or rental car charge they wish to be reimbursed for, and Capital One will credit their account for the equivalent amount.
Let’s look at the pros and cons of the Capital One Venture Rewards Card to see if it’s the right rewards card for you.
- Two “Miles” Per Dollar Spent. Though it’s marketed as a travel rewards card and you earn two “miles” for each dollar you spend, the miles aren’t just valid towards airfare as they are with other travel cards. Each mile is actually worth one cent and can easily be redeemed for any travel expense such as airline tickets, hotel stays, or car rentals – and you’re not limited to any specific companies or airlines. For example, if you have 20,000 miles earned, you can use those miles toward any $200 hotel stay, train ticket, or flight. In essence, the Venture Rewards card is a cash back card that delivers a remarkable 2% return on all expenses.
- $59 Annual Fee. This is a modest fee compared to other credit cards, and it’s waived your first year. One way to look at it is that the fee will pay for itself after you spend $3,000.
- No Foreign Transaction Fees. Foreign transaction fees are a terrible rip off. Most credit cards charge between 1-3% on all transactions processed outside of the United States for no reason other than the fact that they can. While some other credit cards, like the American Express Platinum, have recently announced that they will be eliminating these fees, Capital One has never charged this on any of its cards in the first place.
- 13.9% to 20.9% Variable APR. The interest rate you receive will vary based on your credit history. It will change further depending on the Prime Rate.
- Outstanding Reward Rate. While some cards may offer higher cash back rewards on purchases during some periods, 2% cash back is the highest non-promotional rate offered by a credit card on all purchases. So long as you spend at least 2% of your charges on something that is travel-related, the miles granted are as good as cash.
- Earn Points and Miles on Awards. If you were to earn genuine airline miles that were redeemable for an award that was worth 2 cents per mile, you still would not earn miles on the award flight itself. Since this Capital One program issues their awards in the form of a statement credit, the airlines treat your award flights just like any other paid ticket. That means that you will earn miles, qualify for elite status, and can even be eligible for upgrades on your award tickets.
- Award Flexibility. Anyone who has ever tried to redeem an airline award seat knows that availability can be scarce at best, and non-existent in many cases. Capital One’s No Hassle award program is entirely independent of these restrictions, allowing you to book travel on any airline at any time.
- You Must Claim Credits for Travel Expenses. It’s not difficult to claim credits on the Capital One website, but it is an additional step you have to go through. And if you rarely travel, it will be difficult to claim your rewards. They do offer other redemption opportunities for merchandise and gift cards, but they are usually not as good as cash back.
- High Interest Rates. Like all rewards credit cards, you can expect to pay a higher interest rate than you would on a card that does not offer any kind of miles or cash back. Rewards cards are only for people who intend to pay off their balance every month in full and on time. If you ever have to carry a balance, you should consider a non-rewards card with a very low interest rate such as the Promise Card from PenFed.
- No Opportunity for High Value Redemptions. People who travel using frequent flyer programs from airlines hope to redeem their points for international business and first class award seats that normally cost thousands. If successful, this strategy can represent a value of far more than the one or two cents in value per dollar spent on a rewards card.
If you travel occasionally, and are looking to avoid the unregulated lottery that frequent flyer programs have become, then the Capital One Venture Rewards card may be the best travel rewards card out there. Offering 2% cash back on all purchases, this credit card is a win-win for those who pay off their balance every month and want to save money on vacations.
Do you carry the Capital One Venture Rewards Card? In your experience, how does it compare to other cash back and travel rewards cards?
Editorial Disclosure: This content is not provided or commissioned by any bank, credit card issuer, hotel, or airline. Opinions expressed here are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.