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Should I Downgrade My Capital One Venture To A No Annual Fee Or Get A New, Better Card?

by on May 4, 2014 · 16 comments

in Barclays, Capital One, Sunday Reader Questions, Video Blog Post

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

TPG reader Dan emailed me with a credit card quandary this week:

“I enjoy reading your blog and I had a quick question. I currently have a great credit score (780+) and have 2 credit cards. I have the Capital One Venture and the Barclaycard US Airways Mastercard ( I live in Philly and have Preferred status on US). I tried getting the annual fee waived for the Capital One card, and it was a no go. They said they could change my card to the VentureOne that earns 1.25 miles per dollar spent with no annual fee. I’m considering doing this to keep my credit score intact because Capital One is my oldest card open. Do you think it would be a good idea to change my card to the no annual fee Capital One card and getting something like the Chase Sapphire Preferred?  I’d get the attractive sign up bonus and get 7% point bonus and travel discounts etc.”

The Barclay Arrival Card is my favorite fixed value point card.

The Barclay Arrival Card is my favorite fixed value point card.

Dan has the right idea – it’s time for a wallet revamp! If I were him, I would downgrade my Capital One Venture card, which has a $59 annual fee, to the no-fee VentureOne card to keep your line of credit open and your credit history intact. That’s because your credit history accounts for 10% of your FICO score, so keeping an account open with Capital One will be beneficial. Yes, the VentureOne only earns 1.25 miles per $1 as opposed to the Venture’s 2 miles per $1, but there are actually better credit card offers out there that you should consider instead.

If you want an even better return than the Venture, get the Barclaycard Arrival. Its $89 annual fee is waived the first year, and the sign-up bonus of 40,000 miles when you spend $3,000 in 3 months is worth $440 toward travel. You earn 2x miles per $1 on all purchases and can redeem those miles at 1 cent apiece toward travel purchases plus get a 10% mileage refund on travel redemptions, giving you a 2.2% return on spending. For more information and a comparison of how the Venture and Arrival stack up, as well as other fixed-value points, check out this post: Maximizing Fixed-Value Points.

There are 10 great travel transfer partners of Ultimate Rewards.

Think about getting a card with transferable points, like Ultimate Rewards’ 10 great travel transfer partners.

While you’re applying, you should also consider getting Sapphire Preferred or the Ink Bold or Ink Plus to build up and diversify your points portfolio. Right now you have no transferable points, so you definitely want to start maximizing other programs that will give you  more flexibility with redemptions – especially if you ever consider premium travel where transferable points and their travel partners can come in handy. Plus remember that Ultimate Rewards points earned with these three specific cards can be redeemed for Pay With Points at 1.25 cents apiece towards travel – and all have category spending bonuses (2x on travel and dining with Sapphire Preferred, 5x on office stores and telecommunications and 2x on hotels and gas with the Ink cards), so even if you used this fixed-value redemption system, you are still potentially getting a better rate of return on your spending that can be worth as much as 6.25% if you max out those Ink 5x categories.

Since these cards are issued by other banks, you should be able to get a Barclaycard and a Chase card on the same day with no issue since you have such a strong credit score and relatively few cards.

Have any other questions? Let me know by messaging me on Facebooktweeting me or emailing me at [email protected]

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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  • Ben Price

    How about an article on the CSP. Don’t wanna pay the $95 AF, and especially don’t wanna pay $149 or whatever the new annual is.

    Am I grandfathered into the $95 or does my AF change as of next year?

    What happens to my UR points, and my ability o earn UR points, if I downgrade to a Chase Sapphire (Verses Chase Sapphire Preferred)?

  • John

    Is the Barclay arrival card worth the annual fee after the first year?

  • binny

    Last month I downgraded my annual fee Venture Card to the no annual fee Quicksilver (1.5% cash back on everything) card which is way better than no annual fee Venture Card (1.25% back on everything).

  • Ben Price

    Depends on your spend. Just figure out what you spend, what kind of cash back you’re getting, and then compare it to the cost of the card…i.e., “is it worth paying $89 for $1,000 in cash back”–typical cost/benefit analysis.

  • Jake from MSP

    Exactly what I did too

  • John

    I usually spend around 100K a year but 95% of that spend goes to other cards like CSP etc

  • Ben Price

    Devils in the details. To do a true cost benefit analysis, you’d need to find out exactly what you spend and/or what your benefits are and compare it to the $89. Only you can answer that. If you’re not willing to shift your 100k spend towards Arrival, probably not worth the $89.

  • Chance Bradford

    You are Grandfathered in per the ToC –
    You can also transfer the points out from your CSP to your favorite hotel/airline and then cancel your card.

  • JimT

    If you run the financial calculations to maximize return comparing the Capital One Quicksilver, Capital One Venture, and the Barclaycard Arrival cards, including the yearly fees, you will find the following.

    Yearly credit card spending $11800 consider Venture instead of Quicksilver

    Yearly credit card spending $12714.2857 consider Arrival instead of Quicksilver

    Yearly credit card spending $15000.00 get Arrival instead of Venture

    This data is best presented in a spreadsheet with a graph of % Return versus Yearly Spend. It is unfortunate that we cannot find more of the kind of analysis I am sharing which provides useful insights instead of regurgitation of the basic credit card terms. I would encourage any reader of this response to reproduce my results and the spreadsheet and graph I have described to better understand how this game is played. Have fun folks.

    JimT

  • khad

    Yep.

  • ET

    Mr. TPG,
    I recently applied for the Barclaycard Arrival World MasterCard, but once I received the card in the mail it was the Platinum version. I believe it was due to the fact that I had recently been approved for two other cards. Either way, when I read through the term details I still in fact will receive 2x points for all purchases, with 40,000 points after $3000 spend in 3 months with the $89 annual fee waived for the first year. My question to you is if I use the card with it’s 0% interest rate to pay off $3000 left on my car (which has a higher interest rate) will that count towards the spend requirement? I called Barclay and the rep told me it would it would, but I want to be sure before I do this.
    Thanks and keep up the great work!

  • MPS

    Did your points (miles) transfer to the Qucksilver card 1 for 1 dollar value? I got the Venture thinking I could use on all bills, which I can’t, therefore the Quicksilver would work out better for me. Just not sure the miles would transfer to true dollar value.

  • MPS

    Have Cap One Venture rewards, AF is about to hit, spending less than 1000/mo on card, therefore Quicksilver would be a better match for me. My question is will the miles I have accumulated on the Venture card transfer to the Quicksliver card, for example 58000 miles to $580?

  • MO

    I currently have a Chase BA Visa Signature. If I wanted to convert to the Chase Sapphire Preferred which gives me access to more partners than just BA would I get the sign up bonuses?

  • NDL92

    Any consideration given to Chase Sapphire?

    Very helpful analysis – thank you.

  • JimT

    Travel point rewards programs are designed to make it difficult to calculate the overall return rate with the exception of the Starwood Preferred Guest Loyalty program. Major partners to the CSP have had significant point devaluations recently. Also, I am not a frequent traveler and I would not pay business or first class airfare so the high returns for points on those airfares are not appealing. I currently carry the original AMEX Blue Cash Preferred Card, the Capital One Quicksilver card, the AMEX Starwood Preferred Guest (SPG) card, and my credit union Mastercard. Recent SPG devaluations make it less attractive than when I signed up a year ago, but it is one of the better programs for credit card spend if you are ok with the lower tier Starwood hotels.

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