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Card Comparison: Fixed-Value Earning Points Cards

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Update: Some offers mentioned below are no longer available. View the current offers here – Citi ThankYou Premier, Barclaycard Arrival Plus World Elite MasterCard

Today, TPG Special Contributor Eric Rosen takes a look at four of the top fixed-value points programs and the credit cards that can help you maximize each of them.

There are three types of travel rewards: transferable points like Amex Membership Rewards or Chase Ultimate Rewards; program specific rewards like airline miles or hotel points; and fixed-value points, where each point or mile has a pegged redemption value (usually around 1 cent apiece).

credit_cards
Not all points are created equal, but fixed-value points have a lot of value depending on how you use them.

Of the three types, fixed-value points are the easiest to understand and use. While their redemption values are often lower than those of other points and miles (depending on how you redeem them), their ease of use and a few other factors mean that fixed-value points have a very clear, important place in the world of travel rewards. There are also several great credit card offers currently available that you should consider if you’re looking to add fixed-value points to your portfolio.

Today we’ll look at four of the top credit cards for fixed-value points, how you earn and redeem points with each, and what value you get back when redeeming specifically for travel.

In the following comparison, we’ll look mainly at four programs:

  • Barclaycard Arrival Miles
  • Capital One Venture Rewards
  • Citi ThankYou Rewards
  • US Bank FlexPerks Rewards

American Express Membership Rewards and Chase Ultimate Rewards also have pay-with-points features (offering 1-1.25 cents per point in value depending on which card you have), but we’ll leave them out of this analysis since they’re primarily transferable points programs.

The redemption values discussed will be primarily related to travel, since that’s what these programs and their affiliated credit cards are intended for, and where their best value tends to be.

Ven
Fixed-value points are easy to use, so you can spend less time planning. Image courtesy of Shutterstock.

Why Earn Fixed-Value Points?

Since the rate of return for fixed-value points is usually pegged to a value of about 1 cent apiece, your return on spending is usually capped at about 1-3% depending on where you spend your money and the category bonuses offered by your credit card. That means you won’t be using these points to book a first class ticket to Europe, because you would need an astronomical amount.

However, there are many benefits to redeeming fixed-value points. Here are a few.

1. Ease of use: Probably the biggest selling point is the ease of earning and redeeming fixed-value points. Depending on your credit card, you earn a set number of points or miles per dollar spent (usually 1-2), and you then redeem those points or miles for a fixed value (usually 1 cent apiece). You don’t have to think much about where you use the card or what you redeem points for, and you get a quick, easy formula for your points strategy.

2. Travel flexibility: Another major positive aspect of fixed-value points is that they function somewhat like cash, so you can buy whatever airfare or hotel you want and then redeem points to cover the expense. That eliminates the hassle of having to check award availability or deal with blackout dates. If there’s a ticket or room available, you can use your points to pay for it.

3. Elite credit: Along the same lines, since you’re essentially making travel purchases and then redeeming points to cover the expense, you still earn points and miles as well as elite miles and stay/night credits like you would when purchasing airfare or hotel stays with cash. However, as is the with case normal hotel bookings, if you use an online travel agency (like Orbitz or Priceline), you might not get hotel points or stay credits.

Fo a brief, shining moment, Infinite Elite status seemed like a reality for more than just a few
You can still earn points, miles, and elite status when you redeem fixed-value points.

4. Cheap redemptions: Because the value of these points is fixed, there are some great deals to be had on the cheaper end of the travel spectrum. A round-trip domestic economy award ticket on a legacy airline like American or United may cost you 25,000 miles whether the airfare is $150 or $750. In contrast, each fixed-value point is worth a specific amount, so when the cash price goes down, so does the redemption cost. For instance, that $150 airfare would only cost you 13,500 Barclaycard Arrival miles rather than the 25,000 miles a legacy airline would charge you.

5. Incidental travel expenses: Another great thing about fixed-value points is that you can often redeem them for incidental travel expenses that you couldn’t cover with other kinds of points, such as award ticket fuel surcharges and taxes, international train tickets, and even campground rentals. That can help keep your cash costs low and take care of any unforeseen expenses when traveling.

Use your fixed-value points on travel that might not otherwise be covered, like foreign train tickets.

 

Credit Card Comparison – Quick View

Here’s a quick summary of comparable credit cards in the four points programs I’ll be discussing.

  Sign-up Bonus/ Spend requirement Everyday Earning Travel Redemption Return Earning Category Bonuses Annual Fee
Barclaycard Arrival Plus 40k miles /$3k 2 miles per $1 2.2% None $89*
Capital One Venture 40k points /$3k 2 miles per $1 2% None $59*
Citi ThankYou Premier 50k points /$5k 1 point per $1 1.25-3.75% 3x on dining/entertainment, 2x on air/hotel $125*
US Banks FlexPerks Visa 25k points /$3.5k 1 point per $1 1.33-6% 3x on charity, 2x on telecommunications and gas, airfare or groceries $49*

* indicates that annual fee is waived for the first year.

Barclaycard Arrival Miles

Barclaycard really changed the fixed-value arena with the launch of its Arrival cards last year, including the premium World Elite Mastercard version. Here are the details on that card.

Barclaycard Arrival Plus World Elite MasterCard
Current Bonus: 40,000 points when you spend $3,000 in 90 days
Annual Fee:
$0 first year then $89
Earning:
Earn 2 miles per dollar on all purchases
Redeeming:
Redeem at a rate of 2 miles per cent for everyday purchases and 1 cent per mile on travel purchases with a 10% mileage refund
Travel Redemption Value: 2.2%
Benefits: No foreign transaction fees, complimentary TripIt Pro subscription, World Elite Mastercard benefits.

So you earn 2x miles per dollar on all purchases. You can redeem them at a rate of 2 miles per cent for everyday (non-travel) purchases, giving you a 1% return on spending. Or you can redeem them for travel at a rate of 1 mile per cent and get a 10% mileage refund on these redemptions. That brings their value for travel to 2.2%. Travel redemptions include the following:

  • Airlines
  • Travel Agencies and Tour Operators (including online agencies such as Expedia, Priceline and TripIt)
  • Hotels, Motels and Resorts
  • Cruise Lines
  • Passenger Railways
  • Car Rental Agencies
  • Buses
  • Taxis
  • Limos
  • Campgrounds
  • Tourist attractions
  • Timeshares

Here is how you redeem your Arrival miles.

With the Barclaycard Arrival card, you log into your account on barclaycardus.com.

Barclaycard login

Then click on Manage Rewards and that will take you to a page where you can decide what kind of redemptions to make. Under the travel category, click on “Redeem Now.”

Barclaycard Redeem NowYou will be redirected to a page with your recent travel category purchases that will list how many more days have to redeem miles for each one (the limit is 120 days).

Barclaycard manage rewardsJust click on the one you’re interested in redeeming for and it will display the amount of miles you need to cover the charge. You can redeem for the full amount if you have the points, or you can redeem in 2,500-point increments. When you click on the individual transaction, you will see all your options. Click on the one you want, and that will take you to the next page where you can either check out or continue shopping.

Barclaycard Uber redemptionYou can redeem for several charges at once, like in the above example. When you have found all the charges you want to redeem for, you just need to verify the redemption, select “Checkout,” and then click “Place Your Order” on the next page, and you’re done.

Capital One Venture Rewards are probably the best-known fixed-value points.
Capital One Venture Rewards are probably the best-known fixed-value points thanks to celebrity-heavy ads.

Capital One Venture Rewards

Capital One Venture Rewards is probably the best known of these rewards programs thanks to its long history and a savvy advertising strategy that has employed celebrities like Alec Baldwin and, most recently, Jennifer Garner to extol the ease of redeeming your miles. Its top related card is the Venture. Here are the details.

Capital One Venture Rewards Credit Card
Current Bonus: 40,000 miles when you spend $3,000 within 3 months.
Annual Fee: $59 waived the first year
Earning: 2 miles per dollar on every purchase
Redeeming: 1 cent per mile when redeemed for travel or cash-back statement credits
Travel Redemption Value: Same
Benefits: No foreign transaction fees, Visa Signature benefits.

So as you can see, the fixed rate of return on all purchases, travel and otherwise, is 2% – a very solid offer, especially since you don’t have to think ahead about whether a specific purchase will count as a travel category merchant to get a more favorable redemption rate.

To redeem your points, log into your account at Capital One.

Capital One login

Then you can click on the “Your Rewards” link that lists how many points you have. That will redirect you to the No Hassles Rewards site. From there you click on the “Redeem Now” button.

Capital One Rewards home

That will take you to the following page where you can choose how to redeem your points. With travel, you have the option either to redeem points for travel on the spot or to redeem for a past travel purchase with the “Purchase Eraser.”

Capital One redeemOnly your past travel transactions will be listed with the purchase eraser, as you can see from 4 travel charges I had from August. You click on the one you want and the site will display the amount of miles you need to redeem – 1 mile for 1 cent in value. You then click on Review Order and then confirm it and voila, redemption done.

Capital One past travel

For new reservations, click on the “New Reservations” button and you can search for flights, hotels, car rentals and packages, all powered by Orbitz.

Capital One Orbitz

Then just enter your travel details and then it will pull up flight options like these from LA to Chicago in November.

Capital One flights

As you can see, the mileage value remains the same even though airfares vary slightly, so you could actually get a marginally better rate of return than 1 cent per mile. It also presents you with flights/hotels packages.

Then you just follow the steps: review and confirm your itinerary and whether you want to use miles or pay cash, and that’s it. All in all, it’s a very easy interface that makes it easy to redeem your miles.

Citi ThankYou Rewards

Citi has recently been revamping its once lackluster ThankYou Rewards program to include 9 travel transfer partners including Singapore KrisFlyer and Flying Blue, but it’s still a strong fixed-value program that’s worth considering just from that angle. The comparable card in this field for the ThankYou Rewards program is the Citi ThankYou Premier card.

Citi ThankYou Premier
Current Bonus: Earn 40,000 points after 3,000 in purchases within 3 months
Annual Fee: $95
Earning: Earn 3 ThankYou® points per $1 spent on Travel including Gas: 2 ThankYou Points per $1 spent on dining out and entertainment. 1 ThankYou Point per $1 spent on other purchases
Redeeming: 1.25 cents per point when redeeming for travel, 1 cent per point on merchandise, gift cards and statement credits.
Travel Redemption Value: Based on the redemption options, you’re getting between 1.25-3.75% back on spending.
Benefits: No foreign transaction fees, share points freely between accounts (though they expire within 90 days of transfer).

This card’s current bonus is as high as we’ve seen it in a while, and the rate of return on certain purchases is nearly 4%, but you definitely have to be strategic about where you use this card and what you want to redeem your points for. That said, redeeming points for travel is quite easy through the ThankYou Rewards portal. Here’s how.

Simply log into your account either through Citibank or ThankYou Rewards.

Citi ThankYou Login

Then you will see your option tabs in the left corner, including Shop, which includes travel, and “Or Do More,” which includes shopping with points, paying bills online with points, donating them and more.

Citi ThankYou Do More

Click on the “Shop” tab, though, because that is where you will find travel.

Citi ThankYou Shop Points

Then you can search for flights, hotels, car, cruises and packages as you would with an online travel agency and either purchase them or use points for them. This account had 0 points in it, so, for instance these flights from LA-Denver are just coming up as cash options.

Citi ThankYou flights

However, if this account had ThankYou points in it, you would see a box option to check where you could use your points instead at a rate of 1.25 cents per point. So this $171 ticket would have required 13,708 points.

You can also redeem your points for travel certificates with: Alamo, Avis, Budget, Carnival, Hyatt, Mandarin Oriental and Royal Caribbean. The rate of redemption is 1 cent per point in value, and redemptions start at 2,500 points.

Travel certificates like this Hyatt one get you 1 cent per point in value.
Travel certificates like this one from Hyatt get you 1 cent per point in value.

You can find out more about earning and redeeming ThankYou points here.

US Bank FlexPerks Travel Rewards

One of the lesser-known programs, this one is still worth looking into thanks to some potentially valuable airfare redemptions. The top card in this program is the Travel Rewards Visa. Here are the details.

Here is the current FlexPerks Travel Rewards Visa offer.
Here is the current FlexPerks Travel Rewards Visa offer.

FlexPerks Travel Rewards Visa Signature
Current Bonus: 20,000 FlexPoints after the first $3,500 in net purchases in the first 150 days
Annual Fee: $49 waived the first year
Earning: 3 points per $1 on charitable donations, 2 points per $1 spent on gas, groceries or airline purchases (whichever you spend the most on in a billing cycle) and most cell phone expenses, 1 point per $1 on everything else.
Redeeming: The redemption schedule yields values of between 1.33-2 cents per point depending on the cost of your airline ticket
Travel Redemption Value: You are earning a potential of between 1.33-6% back on your spending with this card though the high end of that spectrum would mean you’re only spending on charity.
Benefits: No foreign transaction fees. Every year you spend $24,000 on the card, you earn 3,500 bonus FlexPoints and you can earn another 5,000 when you refer a friend who acquires and uses the card.

You can read a full explanation of the program and how FlexPerks work here, but to give you the short version…

You can redeem FlexPoints through the FlexPerks Rewards travel site, which is powered by Travelocity. When you redeem for hotel and car rental gift cards, you must do so in 5,000-point increments at a rate of 1 point per cent. Gift certificates are available for chains including Hyatt, Marriott, Avis, Budget, Hertz, Carnival and Royal Caribbean, among others. You can also redeem for cash-back statement credits (and gift cards, for that matter) at a rate of 1 cent per point in 5,000-point increments.

Flexperks redeem

Airfare is a bit more complicated. Rather than a set value, there are value tiers as follows:

20,000 FlexPoints = Up to $400 ticket value
30,000 FlexPoints = Up to $600 ticket value
40,000 FlexPoints = Up to $800 ticket value
50,000 FlexPoints = Up to $1,000 ticket value
70,000 FlexPoints = Up to $1,400 ticket value
100,000 FlexPoints = Up to $2,000 ticket value
150,000 FlexPoints = Up to $3,000 ticket value
225,000 FlexPoints = Up to $4,500 ticket value
350,000 FlexPoints = Up to $7,000 ticket value
500,000 FlexPoints = Up to $10,000 ticket value

So depending on the cost of the ticket you hope to redeem points for, you are getting between 1.33-2 cents per point in value.

Analysis

For pure simplicity and ease of use, not to mention a relatively low annual fee and a decent current sign-up bonus, the Capital One Venture Rewards card is one of the top choices here. That one-size-fits-all 2% return on all spending for pretty much any purchase you want makes it the easiest fixed-value card to understand and use if that’s your top priority.

However, the 2.2% rate of return on the Barclaycard Arrival Plus edges the Venture card out if you intend to use this card specifically for travel. It’s an even better choice for international travel since Barclaycard issues it with secure Chip + PIN technology. Barclaycard also includes a host of other benefits like a TripIt Pro subscription ($49 annual value) and free FICO scores with each statement (though Capital One does provide non-FICO TransUnion educational scores and credit report summaries to cardholders).

In terms of earning, if you can maximize those bonus spending categories of dining/entertainment and airfare/hotels, the Citi ThankYou Premier might be your best choice, since you can capitalize on a rate of return up to 3.75% depending on where you spend your money. If you dine out a lot and are using the card specifically for airfare and hotels and redeeming your points for travel, this card is the top earner of the pack.

The US Bank FlexPerks Travel Rewards Visa is a solid product, but the somewhat confusing structure of its earnings bonuses (you have to track your expenses each month to see which category you’ll earn the 2x bonus in), and the value variability of that airfare redemption schedule of between 1.33-2 cents per point might just be too much work for some folks.

All in all, the Arrival’s solid rate of return on travel redemptions and its host of benefits, as well as the ThankYou Premier’s earning potential put them at the top of this heap. Though for ease of use, the Venture card is the winner. Here’s how I see it breaking down.

Ease of use – earning/redeeming: Capital One Venture

Best basic travel value: Barclaycard Arrival

Highest potential earning: ThankYou Premier

Most valuable other benefits: Barclaycard Arrival

So as with all credit card-related matters, which card and which program is best for you depends on where you use your card and how you want to use your points. If you can max out travel category purchases and redemptions, then the Arrival and ThankYou Premier might be your cards. But if you’re just an everyday spender who wants to use your points for travel occasionally without the hassle of dealing with award availability, then the Venture is probably the card for you.
Barclaycard Arrival™ World MasterCard®