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Ranking Top Fixed-Value Point Credit Cards: Capital One Venture vs. Citi Thank You Premier vs. US Bank FlexPerks

by on October 22, 2012 · 25 comments

in Capital One, Citi, Credit Cards, Flexperks, US Bank

While I personally get the most value out of transferable points – like those accrued in the American Express Membership Rewards and Chase Ultimate Rewards programs – because they give the flexibility to transfer points into a number of airline and hotel programs, fixed value points may make more sense for a certain set of travelers.

Fixed-value points differ from transferable ones in many ways, but the main difference is that you accrue points that can’t be transferred into frequent flyer or guest programs. Instead, they can be used to purchase travel or get cash back. Generally, 1 point = 1 cent towards airfare. So a $400 flight will cost 40,000 points (with some exceptions noted below).

The beauty of these awards is that the credit card company actually buys the ticket from the airline so you generally earn miles (including elite miles) on tickets purchased using these points. These “no hassle” type programs are popular because there are no blackout dates or capacity controls. You can purchase any flight/ hotel room/ cruise that would be available to you if you were just paying for it normally, and the points act as cash. Simple enough.
So why do people even bother with transferable points and traditional frequent flyer programs and the hassles of award availability? Mostly because if you educate yourself on the ins and outs of airline and hotel programs, you can reap much more value out of every point versus the fixed-value programs.

Case in point, next month I have a one-way JFK to Hong Kong first class ticket on Cathay Pacific that I booked with 75,000 pre-Avios British Airways miles. My exact ticket retails at $7,843, but I only used 75,000 points (I had gotten 100,000 from a single British Airways credit card bonus), getting me over 10 cents in value per point – and with very little cash spend. In a fixed-value program my seat would cost 780,430 points! Granted I wouldn’t pay that full price for first class even though I love it, but the whole point of traditional miles is that I wouldn’t be sitting in that seat if it weren’t for them.

However, traditional frequent flyer programs aren’t for everyone because they require a certain level of flexibility and knowledge. Fixed-value programs might be better for:

1) Those who aren’t flexible with travel dates and need to travel at peak times (like when the kids are out of school)
2) Those who need to earn elite miles on every flight in order to retain status
3) People who don’t like surprises or uncertainty when it comes to the value of their points
4) Flyers who redeem for cheap flights

Here are three of the top “fixed-value” credit cards on the market right now and similar to my last comparison on business credit cards, I’ll rank each based on the following metrics and assign each a 1,2 or 3 score per category: Sign-up bonus, Earning ratios, Fees, Travel Redemption Options, Other redemption options. The card with the most points “wins.”

Sign-Up Bonuses

Capital One Venture: Update- the offer below is no longer valid. The current offer for this card is 20,000 points ($200) when you spend $2,000 in 3 months.

10,000 points ($100) when you spend $1,000 in 3 months. For the past couple years Capital One offered up to 100,000 points, so the current 10,000 is not impressive.  Score: 1

Citi Thank You Premier: Update -the offer below is no longer valid. The current offer for this card is 50,000 points – 20,000 points after $2,000 in purchases within the first 3 months of account opening. Earn an additional 30,000 points after another $3,000 in purchases within the first 3 months of your second year of being a cardmember.

25,000 points ($250)when you spend $2,000 in the first 3 months. Historically this card has seen up to 50,000-point sign-up bonuses, though sometimes there’s been none. There’s also a version that offers no sign-up points, but 2x points on all purchases for two years. If you are a big spender, the 2x earning may be more lucrative. Score: 2

US Bank FlexPerks Visa Signature: Update – the offer below is no longer valid. The current offer for this card is 20,000 points when you spend $3,500 within the first 4 months.

15,000 points (up to $300 in value) when you spend $500 within 90 days. Score: 3

Earning Ratios

Capital One Venture: Earn 2 points per $1 spent on every purchase. Score: 2

Citi Thank You Premier: Earn 2 points per $1 on every purchase for the first 24 months, then 1.2 points per $1 on gas, supermarkets, drugstores, commuter transportation and parking merchants, and 1 point per $1 on everything else. Anniversary points bonus every year ranging from 1-5% depending on how long you have the card. You also earn Flight Points when you use your card to pay for airfare: 1 Flight Point per mile of your flight, so if you book a $500 transcontinental flight that is 4,500 miles roundtrip, you’ll earn 4,500 Flight Points, which get converted into Thank You points for each dollar you spend on the card. So those 4,500 in Flight Points essentially go into pending status and become Thank You points once you spend $4,500 on the card. Score: 3

US Bank FlexPerks Visa Signature: Earn 1 point on $1 of most purchases, 2 per $1 spent on gas, grocery or airline purchases (whichever you spend the most on each month), 3 points per $1 on charitable donations. Earn 3,500 bonus FlexPoints each year you spend $24,000 in net purchases. 5,000 points for referring a friend who gets the card, Platinum banking members of US Bank earn a 50% bonus on all base points plus 0.5 points on all bonus categories. Score: 1

Fees

Capital One Venture: No foreign transaction fees, $59 annual fee waived the first year. Score: 3

Citi Thank You Premier: $125 annual fee waived the first year, no foreign transaction fees. Score: 2

US Bank FlexPerks Visa Signature: $49 annual fee waived the first year, 3% foreign transaction fee.  Score: 1

Travel Redemption Options

Capital One Venture: Redeem points at a value of 1 cent each for any travel. Score: 1

Citi Thank You Premier: Redeem points at a value of 1.33 cents each. 15% off a companion ticket every year (and the companion ticket generally earns miles with the airline). Score 2

US Bank FlexPerks Visa Signature: Members can redeem fixed increments of points for up to certain values of airline tickets. For instance, redemptions start at 20,000 points for tickets up to $400. Points’ value ranges from 1.33-2 cents each. Score: 3

Other Redemption Options

Capital One Venture: 1 cent per point towards statement credits is as good as it gets (and is closer to a cash equivalent than the other programs). They used to offer hotel gift certificates at great redemption ratios, but sadly they have been discontinued. Score: 3

Citi Thank You Premier: You can redeem points for an assortment of gift card options at a 1 cent per point ratio. Cardholders can redeem either 2,500 points for a $25 gift card, 5,000 points for a $50 gift card, or 10,000 points for a $100 gift card. Some of the merchants where you may redeem for gift cards include Best Buy, Walmart, iTunes, Amazon, Barnes and Noble, Regal Theaters, American Eagle, Bloomingdales, Gap, Macy’s, Pottery Barn, Saks Fifth Avenue, Olive Garden, Starbucks, Ruth Chris and Panera Bread. Score: 1 

US Bank FlexPerks Visa Signature: Members can redeem points for hotels and car rental gift cards at a rate of 1 point per cent in 5,000-point increments for which you get gift certificates to use at chains like Hyatt, Marriott, Ritz-Carlton, Avis, Budget, Hertz, Carnival Cruise Lines and Royal Caribbean. Points are also redeemable for merchandise from shops like Apple, Sony, Bose, Canon and Dell, and gift cards from places like Amazon, Best Buy, Gap, Macy’s, Office Depot and Starbucks, or even just cash-back statement credits at 1 cent per point in increments of 5,000 points. Score: 2

Overall Scores
Capital One Venture: 10
Citi Thank You Premier: 10
US Bank World Perks Platinum: 10

As you can see, in the end it’s a 3 way tie. However, based on your spending patterns, the balances can easily tip in favor of one over another. Are you a huge spender who buys a lot of flights? The Citi Thank You Premier with 2x points for two years could be a huge payday since you are essentially earning 2.6% back- plus more if you maximize the Flight Points program. For medium/low spenders, it really depends on what categories you spend- if you spend a lot on gas/groceries/airlines/charities, the 2/3x on the US Bank card means 4%+ back when you redeem on the most expensive flights possible within their redemption tiers- just make sure you don’t use the card for foreign expenses. Lastly, if you don’t want complexity and want a simple 2% back, the Venture card is a solid choice and one that many avid travelers keep for years as a true “no hassle” option.

The great thing is you don’t have to choose between a single transferable points or fixed value credit card. There are many advanced mileage pros that maximize the benefits of both programs. While redeeming for first or business class for a relatively low amount of miles (in relation to the cost of the ticket) can be amazing and aspirational, saving cold hard cash by leveraging fixed value programs can also be a smart strategy. In the end, do the math for yourself and see which program(s) makes the most sense for your needs.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • Thiseye

    Actually the thankyou Premier gives you ~15% off all non-reward flights you book for yourself and up to 3 other people. And you get 1 “free” CONUS domestic companion flight per year.

  • rick b

    Chase UR points can be redeemed the same way at 1.25 cents, except I can earn more than 2x on average and still have the transfer option. What I’ve also discovered is that at least with the Thank You program, the same flights you find online will often have a higher underlying $ value on the Thank You travel site.

    If you go to get the 15% discount on flights, a very limited selection is available. Southwest isn’t even available anymore to redeem points for.

  • Annoyed

    Ugh. This ticks me off.

    Anyone who does any reading knows there’s a 50k TY Premier link out there.

    See post 603 on this link: http://www.flyertalk.com/forum/credit-card-programs/1266831-revived-citi-premier-50-000-ty-bonus-pts-500-worth-fee-free-first-year.html

    I just applied last week and got the 50k signup.

    TPG – why do you promote inferior sign up bonuses? Why don’t you look out for the best interests if your readers?

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  • thepointsguy

    Calm down- I thought the 50k was dead. Glad to know it isn’t- ill update the post.

  • thepointsguy

    Actually the link in 603 leads to an error page. Do you have a working link?

  • rick b

    Except good luck buying anything but a very small set of flights, at the most inconvenient times, through that discount program. Citi likes to throw around the phrase “any flights” too often, and it should be more like “a small selection of flights”.

  • http://twitter.com/thiseye thiseye

    Yes, you need to be flexible, but it’s great if you’re trying to save money because the flights are usually the discounted off of the cheapest flights of the days selected … which are often early morning flights. Regardless, Brian seems to have conflated two points. And the free CONUS pass is great. While not completely free (you have to pay fees), I just booked a flight to SAN for Thanksgiving that saved me $200 (easily paying for the annual fee).

  • Homerica7

    I’ve been able to redeem the companion pass for a discount that was about equal to the annual fee over the price of published flights at the time of booking with a multi-city itinerary (DEN-SFO; SAN-DEN). It ended up costing $280 total for 2 people when the flights were $400 total for two people on Orbitz at the time of booking. However, the flight selection was not great as only United and US Air only showed up. Also the available flights keep changing each time you logged in. For example we found United flights for the days we were interested, but didn’t book immediately to get confirmation from work on taking those days off. Checked the next day and those flights were gone. However, I immediately logged out and then logged back in, and the flights were available again, so their system appears to be pretty buggy.

  • Jason

    Brian – that’s a nice sounding redemption of Avios earned with the recent 1.4x bonus with MR. What are the associated out-of-pocket cash fees you’re paying with that 75k redemption, if you don’t mind adding it?

  • AKold

    I recently used 20K Flexperks for a $397 fare (no award availability plus I wanted EQMs).

    I know UR are better off being used for United/Hyatt/BA, but when you’re earning 2x-5x and can spend them at 1.25 cents each, shouldn’t that also be taken into consideration? I have a TON of UR and there are several trips I take where it’s easier to spend $ than miles.

  • Mike Pawlik

    There are a couple of other good uses for these types of cards. The statement credit is especially useful for car rentals and hotels or resorts that are not part of another loyalty program. One quick note about the Capitol one statement credits, you have to have enough to cover the entire charge or you can’t use them. For instance if you 20000 points you can use them for any charge under $200, they will deduct 1 point per penny of the charge. If you have a $150 travel charge it will cost you 15,000 points but if you had a charge of $201 you would not be able to use the points.
    Bearing that in mind if you are at a hotel that you want to use the points for, and you won’t have enough points, ask them to split the charges between two credit cards. Put just enough on the Capitol one card to be able to use the points and the rest on another.

  • Dc_pilgrim

    For TYP, you really want to accumulate with the Citi Forward card, 5x dining, bookstores (incl amazon) and movies/movie rentals (but not netflix). Also, its worth noting they at times have gift cards “on sale” e.g. $100 for 9K or even 8k in points.

    I have a bunch pooled, but I am holding off getting the Premier until I’d have a 1.33 cpp redemption planned so I don’t start the clock on the annual fee. Given how many other miles I have, it might be a while.

  • Lantean

    i pray to all the travel gods that this is not the future of rewards programs…

  • PJ

    wonder why the US BANKS 5 % ( you choose the categories) rebate everyday card is NOT discussed here.

  • Dr. Mike

    Brian,

    You’ve left off the Southwest Rapid Rewards credit cards, which are fixed-value cards as well. I’ve taken the liberty of applying your point scale to the two versions of the card (Plus and Premier) below.

    Sign-Up Bonuses

    Southwest Rapid Rewards: 25,000 points (~$416) when you spend $1,000 in 3 months. The current promotion, however is 50,000 points (~$833) when you spend $2,000 in 3 months. Additionally, Plus cardholders also get 3000 bonus points (~$50), and Premier cardholders get 6000 points (~$100) on each anniversary. Score: 3

    Earning Ratios

    Southwest Rapid Rewards: Earn 2 points per $1 spent at Southwest or with Southwest partners. Earn 1 point per $1 spent on all other purchases. After earning A-list status, points on Southwest travel accrue at 1.25x. At the A-list Preferred level, points on Southwest travel accrue at 2x. Score: 1

    Fees

    Southwest Rapid Rewards: $69 annual fee (plus), $99 annual fee (premier), 3% foreign transaction fee. Score 1.

    Travel Redemption Options

    Southwest Rapid Rewards: Redeem points at a value of 1.667 cents each for Wanna Get Away fares, or 1.0 cents each for international flights (or cruises). Score: 3

    Other Redemption Options

    Southwest Rapid Rewards: You can redeem for an assortment of gift card options (hotel, car, shopping) at generally 1 point per cent. Noted exceptions are low-value ($25) gift cards which trade at 1.2 points per cent. Score: 2

    Overall Score: 10…but for me it’s the best option as consultant that primarily does domestic travel: no change fees, no bag fees, and the Companion Pass (once you accrue 110,000 points in a calendar year) can’t be beat.

  • Lrwelsh

    Limited selection but the same price whenever I search.

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  • Ron Rahhal

    I have lot of points in a lot of programs, but still find a very good use for my Capitol One Venture card. First, you can use it for all sorts of travel expenses – it allowed me to pay for a meal at the W Hotel, train tickets on the Madrid Metro, and other travel related expenses not covered by “traditional” points. Also, if you’re good at Priceline, Hotwire, LastMinuteTravel, etc. you can book, say, a Hilton, or an Intercontinental, for a fraction of the rack rate, and use No Hassle Points for a far greater value than using hotel points for the same room. Same with rental cars. And if you don’t have enough points, they give you 90 days to earn them. Also, I have a Capitol One Rewards Money Market account – you get 1 point for every $20 in savings, every month. Do the math, and it’s better than the sucky rates you get elsewhere (since the miles are essentially tax free). My point is that it’s great to have in your arsenal – it has a niche.

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  • JT

    On Bankrate.com, in the comparison of Credit Cards, there is absolutely no mention of the 59.00 fee for the Capital One Venture card in the second year.
    This is very disappointing on a site that is geared towards clarity for the consumer. Can you help sort this out?

  • Adam

    Barclay’s Arrival 2.2% back anywhere beats all these?

  • Redwing_maggie

    Last week I received a letter from US bank Flexperks informing me that they are discontinuing the 50% bonus points for Platinum package members effective 8/12/13. A significant devaluation of the program in my opinion – that bonus was often the deciding factor in my using that card.

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