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Analyzing the Barclaycard Arrival Earn Ratio of 2.27% When Redeeming for Travel

by on February 20, 2014 · 25 comments

in Barclays

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Update: The offer mentioned below for the Capital One Venture Card has expired. View the current offer here

The Barclaycard Arrival‘s minimum spending requirement to earn the 40,000-mile sign-up bonus has tripled from $1,000 in 90 days to $3,000 in 90 days, and I know that many readers are curious about the card and just why I think it’s one of the top travel credit cards on the market.

In fact, when we wrote about earlier this week, there was a lively discussion in comments between a reader named Mr. Cool, who kept insisting that the card’s 2.2% return on spending was nothing to write home about since it is just on travel, and other readers who were equally firm about the card being a great value specifically for travel – after all, this is a travel site!

Even if I disagree, I always appreciate a lively discussion, and it got me thinking about just what makes it one of the top travel credit cards out there right now. First, let’s discuss the valuation of return on your spending, and then I’ll get into the competing cards on the marketplace.

A New Valuation – 2.27% Back

Barclaycard-Arrival-Offer

Earlier this week I reposted the Top 10 Ways to Maximize Arrival Miles, but the short of it is, the card earns 2X miles per $1 on all purchases, not just certain categories like the Sapphire Preferred or Premier Rewards Gold. You can then redeem those miles for travel purchases – including airlines and hotels, but also other things like rental cars, train tickets, award ticket fees – at a rate of one cent per mile and get a 10% mileage refund (note, straight up cash-back or merchandise redemptions are at a significantly lower rate of about 0.5 cents per mile). In effect, you are spending 90 miles per dollar on travel purchases instead of 100 miles per dollar.

Doing the simple math, it would seem as if your per-dollar return on spending is just over 2.2% thanks to the earning rate and mileage refund (100 cents divided by 90 miles). However, the way you redeem Arrival miles (which I’ll show below) is to actually make that purchase and then redeem your miles for a statement credit (within 90 days) on that purchase. The thing is, you’re actually also earning Arrival miles on your travel purchase at the usual rate of 2X miles per $1 before redeeming points for it. So in effect, by subtracting the 2X miles per $1 from you redemption total, you’re only using 88 miles per dollar – a redemption rate of 1.136 cents per mile. And since you’re earning 2X miles per $1, you are in actually getting a return-on-spending rate of…2.27%. Now that extra .07% isn’t enough to move the dial significantly, but every point counts, and it ups the rate of return on this card to be even more competitive compared to other fixed-value travel credit cards.

Because Arrival miles are fixed-value points, you can pretty much use them like cash for any travel expense, so there are no blackout dates like with regular award miles or hotel points. Plus, when you redeem Arrival miles for airfare and hotels, you generally earn airline miles and points on those flights since you are paying for them with a credit card and then getting reimbursed using points after the fact just as if you were actually purchasing them. Plus, if you have elite status you can still enjoy your elite benefits such as possibly getting upgraded.

All those are great reasons to keep a premium fixed-value card like the Arrival in your wallet as a way of diversifying your points portfolio and leveraging the different kinds of points you accrue as you maximize your travel rewards.

A Quick Comparison

But I still wanted to answer the question of whether the Arrival truly is among the best travel credit cards. Here are the other cards that I see as its competitors and their pros and cons in comparison to the Arrival.

Capital One Venture
Pros: 2X miles per $1 on all purchases, 2% return on spending including for non-travel cash back.
Cons: Sign-up bonus only currently 20,000 miles (half that of Arrival), Capital One pulls credit scores from all three bureaus

Capital One Spark Cash for Business
Pros: 2% cash back
Cons: Business credit card, so you might not qualify without a small business; sign up bonus of $250 after $5,000 spent within first 3 months

Fidelity Investment Rewards American Express
Pros: 2% back on all purchases, no annual fee
Cons: Must have a Fidelity account, no sign-up bonus

Discover It
Pros: 5-20% cash back when shopping through Discover portal, no annual fee
Cons: Presently no signup bonus, 1% cash back on most purchases

US Bank Flexperks Visa
Pros: Up to 2% cash back on airline redemptions
Cons: Sign-up bonus is 20,000 points when you spend $3,500 in 90 days (might be higher with Olympics promotion), must hit certain ticket price thresholds to get full 2% value from points
Read full review here.

So not only is the Arrival’s 2.27% return on travel spending better than many of its competitors under most circumstances, but its sign-up bonus is also higher, and that’s hands-down a good deal since it’s worth about $454 toward travel.

That said, I firmly believe that whether a credit card is right for you comes down to your personal preferences and plans to maximize it – there are a lot of factors involved, and you’re the only person who can truly decide whether or not to get a credit card. However, I still stand by the Arrival as one of the top travel credit cards out there thanks not only to that sign-up bonus, but also because of other benefits like its World Mastercard perks and more.

In the meantime, you can read my post on Maximizing Cash Back Credit Cards, and here’s a quick reminder on how to redeem your Arrival miles.

How to Use Arrival Miles
With the Barclaycard Arrival card, you log into your account on barclaycardus.com.

Barclaycard homepage

Then click on “Manage Rewards.”

Arrival homepage

That will take you to a screen with a few different options, but the one you want is: “Redeem Now” line that says “Pay yourself back for travel.”

Arrival redeem

That will send you to the next step which explains that starting at 2,500 miles you can redeem your miles to pay yourself back for travel purchases from within the last 90 days. This also means that even if you don’t have enough points to cover the full expense of a charge, you can still cover a portion of it in 2,500-point ($25) increments. The statement will also show you how many days you have left to redeem points for each charge.

Travel expensesBelow that will be listed all the “Purchases Available For Redemption” from your statements within the last 90 days along with how many points each one will require. These purchases will fall under the travel merchant category code Barclaycard assigns merchants. Although whether a merchant is included in the travel category will vary depending on the specific vendor, in general, these categories include:

Airlines
Travel Agencies and Tour Operators (including online agencies such as Expedia and Priceline)
Hotels, Motels and Resorts
Cruise Lines
Passenger Railways
Car Rental Agencies

You then add the charge to your “cart,” confirm your order and then the final screen will show you what your 10% points refund will be.

Redemption 10 percentCredits take 1-2 weeks to post after you redeem and the 10% mileage refund on travel redemptions also takes about 1-2 weeks to post and be credited back into your account.

As I mentioned, using Arrival miles is basically just paying for a travel purchase as usual with your Arrival card and then requesting a statement credit for it – so in general, you still earn miles, hotel points, elite credit, etc., on your travel just as you would if you were paying cash, all of which increases the Arrival’s value proposition even further in my estimation.

If you’re thinking about making the Arrival one of several cards you get in a round of applications, here are my other picks for the top current travel credit card offers.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • steve

    if you include the points earned on the card in the valuation for one card, you should do it for any card that has a similar rewards program.
    i.e. CapOne Venture – you also redeem as statement credit on a previous purchase, which makes it more than a 2x card.

    you can also now redeem Fido rewards as statement credits (no need to have a Fido account).

    so you comparison is flawed.

  • Pinaki

    I’ve been getting my credits and credits on the credits back immediately. This is a good card and Barclay’s online GUI is fairly usable. I’d put it above Chase and Citi (oh god, how terrible are thee)

  • *claps on 1 and 3*

    Just wanted to say that I found out you can redeem these miles on NYC Subway Cards as well. Essentially, four free monthly passes.

    Pretty damn happy with that.

  • Ian

    Anyone know if you could apply Arrival miles to the purchase of Starwood points? I’ll be buying ~$250 worth of Starpoints for an upcoming reservation in Amsterdam and would love to pay with Arrival miles instead of cash. Seems like a stretch though…

  • Andy

    Agree with the 0.07% addition to value. However you need to keep in mind that the same holds true for all 2% cash back (or travel) cards you listed above (which you’ve listed as 2% right now). Once you fixed that it will be a fair comparison, but then we just fall back to the 2.2 vs 2.0 valuation again, since it’s an across the board valuation bump applying your new method.

    Also Venture is easier to redeem as you can redeem against the same ‘travel’ charge as many times as you like in the 90 day window. Barclay ‘travel’ charge disappears after you redeem against it once. This is another factor to consider.

  • Fat Ted

    I’ve found myself redeeming Ultimate Rewards points for travel in the normal 1.25 cents per point method just due to travel preferences and inability to find the right mile redemptions. For this reason, I’ve opened up a new Barclay Arrival card and plan on putting most of my spending on it. I think I’ll still do airlines and hotels on their respective cards and dining on the Sapphire, but all else will go to Arrival.

  • Jasmine

    Venture card is a lot more flexible redeeming . Basically anything travel related will be credited included airport parking.luggage fees.in flight drinks and entertainment car rentals.

  • jimmy

    Thanks for another great write up on the Barclays Arrival Card, I agree it’s the best Travel cash back card out there currently (mostly because of the sign up bonus)…I don’t understand why you or any other bloggers don’t mention that with the Barclays card you can only redeem points Once for each travel charge..this is a huge disadvantage compared to Venture or BOA travel cards(btw BOA also gives you 6 months to redeem by call in)

  • travelingdave

    Hey Brian, thanks for the post. I’ve been enjoying my Arrival card so far. I was wondering if you had ideas on how to maximize points from rent payments. Unfortunately, I have to submit my rent via check, but would love to to somehow be earning points. Do you have any suggestions?

  • Mark

    Google Bluebird checks vanilla reload

  • Jessica M

    This is a good discussion, but I agree with Andy that it’s a parallel bonus so it becomes 2.27 vs 2.04. Also, more importantly, I think the annual fee needs to be taken into consideration. Yes, the arrival wins for the first year especially with the bonus, but any year after that the $89 cuts into almost $4000 worth of spending, so we’d have to spend more than $38700 (!) to catch up and gain more cash back with the arrival than, say, the fidelity card (2.04% of X vs 2.27% of (X-89/.0227)). It’s worth signing up for the arrival but I’d cancel before the fee hits and move on.

  • Daniel

    One thing to also consider is that the Capital One Venture has a $59 annual fee (waived the first year) while the Arrival card has an $89 annual fee (waived the first year.) So if you already had the Venture card it would take quite a lot of spending to offset the difference in annual fee given the only difference is the 10% back on miles used. This is assuming you had both cards and were trying to decide which one was better to use moving forward.

  • Beth Hedquist

    Let’s not forget that Barclay has a travel community, where you can earn 200 points per story you write, giving you more free points without spending a dime. I am loving my new Barclay Arrival card, and racking up the points!

  • BobChi

    If getting so deeply into the nuances of the card’s value with travel purchases, one could take it a step further and remember the opportunity cost of NOT using the CSP for travel. If you value UR points at close to 2 cents, then using the CSP for travel purchases is worth close to 4 cpm, so there’s a notable opportunity cost in using the Arrival. There are other cards with category bonuses for certain types of travel, to which the same caveat would apply.

    The fact that the full value redemptions are only for travel is a negative in that getting those benefits automatically implies passing up better bonuses elsewhere on those specific purchases, assuming you do have other cards with such category bonuses. I would rate my travel purchases with the Arrival at negative value in themselves, but necessary to get the rebate.

    I love the Arrival for enrollment bonus and one year of unbonused spend. I can’t see any prospect of paying the annual fee to keep it.

  • Icheckthingsout

    Never has so much been said about so little. The difference of 0.07% is 70 CENTS per thousand!!!!!

  • asdfasdf

    actually the 0.07% is if you were able to redeem one mile at a time… but there is a minimum mile redemption at one time… so it’s actually 0.06343243234234242426734%

    FYP

  • ed

    It’s actually a return of 2.222~

    Say you had an expense of $25 and you redeemed using 2500 miles. You effectively paid with 2250 after your 10% award. 2250 points can be achieved by spending $11250. (11250*0.02=2250). So given your points and spend, your return is 2500/11250=2.22…

    And easier way to calculate this however is simple dividing by the discount. 1.0/0.9=2.22…

    It’s the same way people calculate the chase 20% discount to be a 1.25 boost to points. 1.0/0.8=1.25

    That said… Barclaycard is great at 2.22. Its arguably one of the best returns you can get for the ultimate convenience. Don’t worry about points conversions, category promos or combining with other cards or checking accounts. Most people would be hard pressed to beat 2.22.

    The amex/chase path requires a lot of homework and vigilance, but for the few willing to put some sweat equity into stretching every mile, it does have some sweet rewards. 2.22 is a solid benchmark to beat. Good luck to those who take up the challenge. :-)

  • ed

    Sorry… need to add a 0 to that 11250 number. Should be 112500.

  • Ben

    I took me 3 phone calls and a escalation ticket to find this out: It’s all nice marketing stuff for Barclay to advertise to the world that you get to redeem points for travel expenses, except that there is a fine print of a minimum purchase of $25. It doesn’t matter if your total expenses in $500 — if they are all made up of transactions less than $25 each, then your redemption rate is a big fat zero! For example, if you purchase 10 travel related items, each costing $24.99, then you are out of luck! Since it’s less than $25 each, they don’t even show up in the “Manage Rewards” area! It took me 3 phone calls over 10 days to find this out!!!

    Sounds like a gimmick to me!

  • J

    I’m sorta new to this, but when buying flights on the arrival you get to redeem the miles afterward. So wouldn’t you earn miles on your flight purchase as well with the airline frequent flyer program as well?

  • thepointsguy

    Yes which is a major positive point of using Arrival

  • CG

    Except you forgot the fact that by “spending” $25 you also earned an additional 50 miles. You calculated that you had to spend 2250 miles to get your $25 reimbursed, but since you earned 50 points on that transaction you really only spent 2200 miles (since you got 50 for free). To earn 2200 miles you would need to spend $1,100. So your return is $25/$1100=2.27

  • Eric

    When the arrival miles are used to reimburse a flight purchase, is the passenger on the flight still eligible to earn miles through the respective airline’s frequent flyer program? My understanding is that flights booked with credit card points on other cards (e.g. Chase Sapphire) count as award tickets and accrue no airline miles; however, since the Barclaycard customer didn’t use miles at the time of purchase, wouldnt they be eligible for those miles?

    If true, this would seam to be an added benefit that I haven’t seen mentioned in your post.

  • thepointsguy

    Yes you earn miles for flights purchased w arrival miles

  • Rajeev Jog

    “This also means that even if you don’t have enough points to cover the full expense of a charge, you can still cover a portion of it in 2,500-point ($25) increments.”

    Sorry #PointsPimp This is misleading and/or false. You cannot payoff a single travel charge with points in multiple transactions (“increments”!). I have 30K points in my account and a $450 hotel charge. When I go to redeem the charge I get a warning: “Please note, you can only redeem against a transaction one time.”

    Which means that the balance $150 in charges can never be redeemed again; indeed as other bloggers have pointed out, the charge disappears from the charges available to be redeemed against.

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