Ranking Top Fixed-Value Point Credit Cards: Capital One Venture vs. Citi Thank You Premier vs. US Bank FlexPerks
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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.”
Capital One Venture Rewards Credit Card: 20,000 points ($200) when you spend $2,000 in 3 months. For the past couple years Capital One offered up to 100,000 points, so the current 20,000 is not impressive. Score: 1
Citi Thank You Premier: 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
Capital One Venture Rewards Credit Card: 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
Capital One Venture: No foreign transaction fees, $59 annual fee waived the first year. Score: 3
Citi Thank You Premier: $95 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
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.
Know before you go.
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