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Update: Some offers mentioned below are no longer available. View the current offers here – Capital One Venture Rewards Credit Card
Earning and redeeming points from travel rewards credit cards can be a challenging endeavor. Whether it’s remembering which one offers the best earning rates at certain merchants or figuring out which transfer partner offers the best redemption rate, there’s a lot of complexity. Many of my friends and family members prefer simpler products, especially ones with points that can be redeemed for a fixed value. Today I want to compare the most popular and rewarding credit cards in this category.
Before getting into the analysis, a few notes about how I selected the below cards. For starters, I wanted to focus on those that solely offer a set value for their points. As a result, cards like the Chase Freedom and Ink Business Cash Credit Card are excluded, since those points can be transferred to a card that earns full Ultimate Rewards points (like the Chase Sapphire Reserve) and then transferred to programs like Hyatt and United. The cards I’ll analyze don’t have this flexibility; you can only redeem your points for a fixed value.
In addition, it’s critical to note that I won’t be comparing every single card in this category, as that list would be quite lengthy. Instead, I’ll focus on the ones that are popular and/or rewarding with points and miles enthusiasts, and I’ve tried to include one from most major card issuers.
So how do these cards stack up? Here’s an overview chart:
|Benefit||Bank of America Premium Rewards credit card||Barclaycard Arrival Plus World Elite Mastercard||Capital One Venture Rewards Credit Card||U.S. Bank FlexPerks Travel Rewards Visa Signature Card|
|Sign-up Bonus||50,000 points after you make at least $3,000 in purchases in the first 90 days of account opening||60,000 bonus miles after spending $5,000 on purchases in the first 90 days||50,000 miles once you spend $3,000 on purchases within three months from account opening||20,000 points after you spend $2,000 in net purchases within the first four months of account opening|
|Earning Rate(s)||2 points per dollar on travel/dining; 1.5 points per dollar everywhere else (plus 25-75% bonuses for Bank of America Preferred Rewards customers)||2x miles on all purchases||10x miles on Hotels.com bookings through January 2020, 2x on all other purchases||2x points at airlines, gas stations or grocery stores; 2x points with cellular providers and at charities; 1x point everywhere else|
|Redemption Options||Redeem for cash back, statement credits, travel purchases or gift cards (1 cent per point)||Redeem for travel credits (1.05 cents per mile) or gift cards/cash back (0.5 cents per mile)||Redeem for travel credits, gift cards (1 cent per mile), cash back (0.5 cents per mile)||Redeem for airfare, hotels and car rentals (1.5 cents per point) or merchandise and cash-back (1 cent per point)|
|Additional Perks||$100 annual airline incidentals credit; $100 credit for Global Entry/TSA PreCheck; no foreign transaction fees||No foreign transaction fees||No foreign transaction fees||$25 airline allowance; no foreign transaction fees|
|Annual Fee||$95||$89 (waived for the first year)||$95 (waived for the first year)||$49 (waived for the first year)|
As you can see, there are some important differences between these cards. Let’s take a closer look at each one to help you determine which makes the most sense for your wallet.
Sign-up bonus: 50,000 points after you make at least $3,000 in purchases in the first 90 days of account opening
Earning rates: Unlimited 2 points per dollar spent on travel and dining purchases; 1.5 points per dollar spent everywhere else; 25-75% earning bonuses for Bank of America Preferred Rewards customers
Redemption options: Redeem for cash back as a statement credit, deposit into eligible Bank of America or Merrill Lynch accounts including checking, savings and 529 accounts, gift cards and for purchases at the Bank of America Travel Center.
Additional perks: $100 annual airline incidentals credit; up to $100 Global Entry/TSA PreCheck credit every four years; no foreign transaction fees
Annual fee: $95
Analysis: The Premium Rewards card is the newest fixed-value product to hit the market, and it’s received a lot of buzz, for good reason. While this isn’t technically a premium credit card (in spite of its name), it does offer a very intriguing value proposition. For starters, the sign-up bonus is the same as Capital One’s Venture Rewards card, matching the highest return of the cards profiled above — $500 of value once you’ve hit the minimum spend threshold. It also gives you solid earning rates and the flexibility to redeem your points for any purchase at the same rate (starting at 2,500 points for a $25 credit). Most other fixed-value cards give you one redemption rate for travel purchases and other (lower) rates for alternative redemptions.
There are two areas where this product really shines above the others: the enhanced earning rates for loyal Bank of America customers and the additional perks category. If you currently have a three-month average daily balance of at least $20,000 in Bank of America accounts and/or Merrill Edge or Merrill Lynch investment accounts, you’re eligible for the Bank’s Preferred Rewards program. The size of that combined balance will then determine how high your earning rates go:
- Tier 1 (Gold): If your balance is between $20,000 – $50,000, you’ll earn 25% more points, boosting your rates to 2.5 points per dollar spent on travel/dining and 1.875 points per dollar spent everywhere else.
- Tier 2 (Platinum): If your balance is between $50,000 and $100,000, you’ll earn 50% more points, boosting your rates to 3 points per dollar spent on travel/dining and 2.25 points per dollar spent everywhere else.
- Tier 3 (Platinum Honors): If your balance is $100,000 or higher, you’ll earn 75% more points, boosting your rates to 3.5 points per dollar spent on travel/dining and 2.625 points per dollar spent everywhere else.
A 3.5% return on travel and dining plus a 2.625% return on all other purchases is fantastic for a fixed-value rewards card.
The other way this card could make a fantastic addition to your wallet involves the additional perks. For starters, you’ll receive an annual $100 credit toward airline incidentals like baggage fees, seat upgrade charges and in-flight purchases. These will be applied automatically to your statement within 7 days of an eligible purchase. Given the card’s $95 annual fee, this annual credit will cover that entire fee and leave you an extra $5.
To sweeten the deal even more, the card also includes a statement credit to cover the membership fee for either Global Entry ($100) or TSA PreCheck ($85), a perk that resets every four years. Most credit cards with a similar perk carry much higher annual fees, so this really helps the Bank of America Premium Rewards credit card stand out from its peers.
Sign-up bonus: 60,000 bonus miles after spending $5,000 on purchases in the first 90 days
Earning rates: 2x miles on all purchases
Redemption options: Redeem for travel credits (1.05 cents per point) or gift cards/cash back (0.5 cents per point)
Additional perks: No foreign transaction fees
Annual fee: $89 (waived for the first year)
Analysis: The Arrival Plus card is another popular one for fixed-value redemptions, and one of its appealing features is the simplicity. Every cardholder enjoys the same earning rates: 2x miles on every purchase. No need to only use the card on certain purchases or worry about a merchant not qualifying as a bonus category. You’ll earn double miles every time you swipe the card.
The redemption side is also relatively lucrative, as long as you’re redeeming your miles to cover travel purchases. These awards are available at a rate of 1 cent per mile, but you’ll also receive 5% of your redeemed miles back. Thus, if you’re looking to cover $100 worth of checked bag fees, you’ll redeem 10,000 points but then get 500 points back. This boosts your overall redemption value to just over 1.05 cents per mile, so your overall return on spending is roughly 2.11%. Keep in mind, however, that the minimum threshold to redeem your points for travel purchases is 10,000 points, one of the changes that were made to the card back in 2015.
Regardless of these limitations, having a card with a return of 2.11% on all purchases is quite attractive.
Capital One Venture Rewards Credit Card
Sign-up bonus: 50,000 miles once you spend $3,000 on purchases within three months from account opening
Earning rates: 10x miles on Hotels.com bookings, 2x miles on all other purchases
Redemption options: Redeem for travel credits or gift cards (1 cent per mile), cash back (0.5 cents per mile)
Additional perks: No foreign transaction fees
Annual fee: $95 (waived for the first year)
Analysis: I’m sure that most of our readers have at least seen part of Capital One’s marketing campaigns with celebrities like Jennifer Garner and Samuel L. Jackson. As with the Arrival Plus, the beauty of the Venture Rewards card is the simplicity: You earn double miles on all purchases and can then use those miles to cover travel purchases you’ve made on the card. However, that simplicity prevents you from getting any greater return with the card, as you’ll max out at 2%. While the sign-up bonus is nice, the card essentially works like a 2% cash-back card with a $95 annual fee (which is waived for the first year). When viewed in this light, the card isn’t nearly as rewarding as its commercials make it seem.
However, a new development makes this card far more rewarding for a specific category of purchases: Hotels.com bookings. Now through January 2020, both the Venture Card and the Capital One VentureOne Rewards Credit Card are offering 10x miles on properties booked through a specific link — hotels.com/venture — at Hotels.com. Since Venture miles are worth 1 cent apiece, this amounts to a 10% return on Hotels.com bookings, and the deal gets even sweeter when you factor in Hotels.com Rewards’ offer of one free night for every 10 nights you book — effectively getting you 20% back.
U.S. Bank FlexPerks Travel Rewards Visa Signature Card
Sign-up bonus: 20,000 points after you spend $2,000 in net purchases within the first four months of account opening
Earning rates: 2x points at airlines, gas stations or grocery stores; 2x points with cellular providers and at charities; 1x point everywhere else
Redemption options: Redeem for airfare (up to 2 cents per point) or hotels, merchandise and cash back (1 cent per point)
Additional perks: $25 airline allowance; no foreign transaction fees
Annual fee: $49 (waived for the first year)
Analysis: The final card under consideration is the U.S. Bank FlexPerks Visa Signature. At first glance, it may not seem that impressive, as the sign-up bonus is smaller than the others and it only offers double points with cellular providers and at charities plus your choice from one of three other categories of spending airlines, gas stations or grocery stores.
The FlexPerks Visa Signature stands out a bit more on the redemption side — as of 2018 the redemption value has been dropped to 1.5 cents per point, while at the same time being expanded to include other travel purchases (like car rentals and hotels). Even with the changes to the program, the card still offers a 1.5% return on everyday purchases and a 3% return on certain categories (including one that you select). When you factor in the low annual fee ($49) plus the annual credit for airline fees ($25), this is still a solid value proposition.
So which card wins?
Given all of these numbers, it may be challenging to determine which one is the best candidate to add to your wallet. For the general traveler, I’d recommend looking hard at the Bank of America Premium Rewards credit card thanks to its solid earning rates, $100 annual airline credit and the flexibility to redeem your points to cover any purchase you’ve charged to the card. This is especially true for current Bank of America customers with more than $20,000 in combined balances across accounts, as they’ll enjoy enhanced earning rates that boost the return on the card even higher.
However, if you frequent hotels that aren’t otherwise affiliated with a loyalty program, I’d say that the Capital One Venture Rewards Credit Card would be the better bet thanks to the new partnership with Hotels.com. This represents one of the highest earning rates in the entire industry, and even the standard earning rate on other purchases gives you a respectable 2% return on everything else. Just keep in mind that stays booked through third-party online travel agencies (including Hotels.com) typically don’t earn you points in the given property’s loyalty program, nor will you earn credit towards elite status. As a result, be sure to crunch the numbers to make sure that the earnings you’re giving up by booking through Hotels.com are more than covered by the enhanced earning rates on the Venture card.
The final two are very close to one another, though I’d probably put the Barclaycard Arrival Plus World Elite Mastercard into the third spot thanks to the sign-up bonus and the ability to redeem points for any travel purchase. This means that the U.S. Bank FlexPerks Travel Rewards Visa Signature comes up last, largely due to the fact that flight redemptions were dropped to 1.5 cents per point at the beginning of 2018. I’d love to see these two add some additional perks to compete with the new kid in town (Bank of America cards) as well as the newly-enhanced Venture Rewards card.
Diversifying your points and miles is a critical strategy in this hobby, and fixed-value credit cards represent a great way to do that. The offerings in this category were relatively boring until the recent release of the Bank of America Premium Rewards credit card, and things got even more interesting when the Capital One Venture Rewards Credit Card added enhanced earning rates for Hotels.com purchases. These two now stand above others in the fixed-value category of travel rewards credit cards, but here’s hoping that others will enhance their offerings in the near future to follow suit!
Featured image by Eric Helgas for The Points Guy.