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Last week, I posted about the launch of two lucrative new sign-up offers on both versions (one with an annual fee and one without) of Barclaycard’s Arrival card that are shaking things up in the fixed-value travel point sphere.
The Barclaycard Arrival World Elite MasterCard – With $89 Annual Fee waived for the first year comes with 40,000 bonus miles (~$400) if you make $1,000 or more in purchases in the first 90 days after account opening and earns 2X miles on all purchases.
The Barclaycard Arrival World MasterCard – No Annual Fee comes with 20,000 bonus miles (~$200) if you make $1,000 or more in purchases in the first 90 days after account opening and earns 2X miles on travel and dining purchases and 1X miles on all other purchases.
Those miles are redeemable at a fixed rate of 1 cent each for travel and between 0.5-1 cent each for other redemptions such as cash back credits and gift cards (which I’ll get into below).
One of the other interesting features of both cards is that you get 5% of your miles back when you redeem for travel, bringing the return on your dollar up to 2.1% on all purchases on the annual fee card and that high on travel and dining purchases on the no annual fee card.
What Counts as Travel and Dining?
If you get the no annual fee card, the key to your spending strategy will be figuring out just what counts towards that 2X category spending bonus on travel and dining, so I asked for further information from Barclaycard and here is what is included.
Unlike the Sapphire Preferred’s 2X travel bonus, which is eligible on the usual expenses like airlines and hotels, but also on other kinds of transportation including buses, travel agencies, train tickets, and even taxis, subways and parking.
By contrast, the Barclaycard Arrival card’s travel spending category includes the following:
Travel Agencies and Tour Operators (including online agencies such as Expedia, Priceline and TripIt)
Hotels, Motels and Resorts
Car Rental Agencies
Just note that all of this depends on how a merchant is categorized and there is no maximum to the total miles you can earn as long as your account is open and in good standing.
When it comes to redeeming miles for travel, you cannot redeem fewer than 2,500 miles and you can use them to “pay for travel” on the same categories at a rate of one cent per mile. The way that works is you can redeem miles for statement credits on travel purchases made within the last 90 days.
You can also redeem miles for cash back statement credits, gift cards and merchandise. Cash back statement credits also start at 2,500 miles but for just $12.50 in value, so you’re only getting a value 0.5 cents per point. Gift card redemptions start at 5,000 miles for $25, again just getting a value of 0.5 cents per mile and bringing your return on spending to just 1% with the annual fee card and potentially just 0.5% on the no annual fee card. Merchant gift card redemption rates vary. If you redeem Arrival card miles as a statement credit, the credit will be posted to your account within 5-7 business days – so no waiting till your due date to request a credit! There is no maximum to the total miles you can redeem.
The redemption rate for the Arrival cards is different than other cards in the fixed-value sphere. For example, the Capital One Venture lets cardholders redeem points for one cent each towards statement credit, while the Citi ThankYou Premier lets cardholders redeem points in bundles of 2,500 for $25 gift cards. The US Bank FlexPerks Visa lets members redeem for cash back statement credits as well at a rate of 1 cent per point. So if you want cash back, Arrival isn’t your best bet.
That’s why knowing what exactly falls into the travel category is crucial to your points redemption strategy – it could mean the difference between getting a 0.5% return on your spending and a 2.2% return (literally 4.4 times the value!), so before you redeem for a specific expense on your statement, be sure to check that the merchant is correctly categories within one of those travel labels so you get the full value of those points (and that extra 5% points refund).
You can redeem miles as soon as they post to your account by going to BarclaycardUS and visiting “Manage Rewards.”
Regarding that 5% miles refund, here’s how it works. When you make a mileage redemption, you’ll get the bonus miles added back into your account within 1-2 weeks. So if you were to redeem 25,000 miles, you’d get 1,250 added to your rewards account automatically a week or two later that you can use toward your next redemption. That means you have to have enough points in your account for the full redemption you wish to make and then you’ll get a refund rather than just having to redeem 90% of the points off the bat.
One other major thing to note from the terms and conditions of both cards: “Your credit card account cannot have been inactive for thirteen (13) billing cycles (approximately thirteen (13) months). “Inactive” means you have no balance, no payments and no transactions.” So you’ll have to make a charge at least once every thirteen billing cycles in order to keep your account open and in good standing – otherwise you better use your points before your account is inactivated, though for reasons of maintaining your credit score and history, I would never suggest letting that happen.
Because the annual fee is waived in the premium card for the first year and you get twice the miles as on the no annual fee card, that’s the one I’ll be getting during my next round of applications (assuming the offer is still around) since it equates to $400 worth of travel redemptions of which I’ll earn miles/points on assuming I use for airline or hotel purchases.
That said, if you’re considering a fixed-value card like this for your travel points portfolio, then I would definitely get this one specifically for travel redemptions at up to a 2.2% return on your dollar and not use those miles for non-travel redemptions since the value of those drops to about half.
With great transfer partners like United and Hyatt, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards