Why You Should Never Get a Capital One Card

Capital One’s Venture Card — that “no hassles” credit card advertised on TV — will save you big on the road, right? Many people — even me — recommend this card but it is actually the WORST travel rewards credit card you can use. I get a lot of emails asking about this card, and I recently chastised two friends for using it as their primary credit card.

Wait, you just said you recommend it. How can it be that be bad, then?

Capital One gets a few things right: the simple rewards structure of their no-fee Venture Card is perfect for people who don’t spend much money or who don’t want to worry about points. They are selling simplicity and they do it well. I think if you’re a low-spending, low-traveling person, this card could be worth your time.

But it’s not even close to being even a mediocre travel hacking rewards card. I think it’s probably the worst card for a travel hacker.

While it is true you earn two points per dollar spent, not all points are equal. It’s not how many points you earn, but how you can redeem those points.

Let me explain why Capital One’s Venture Card is not good for those wanting to get the most bang for their travel hacking buck and actually get free flights and hotel rooms:

The card comes with a 40,000-point sign-up bonus after spending $3,000 in three months. That’s 46,000 points, worth $460 USD. I think the card is worth the sign-up bonus – I’ll take $460 any day but what happens after that?

Let’s say you’re in your second year and plan to spend $100,000 on your card for 200,000 points, worth $2,000.

For that much you can get a lot more.

For example, 100,000 American Airlines points when earning 1 mile per dollar spent (assuming no category bonuses like booking with the airline) could get you a round trip in coach class to Europe twice, a first-class ticket to Europe, or a business-class ticket to Asia, which on JAL costs $6,900:

In this scenario, your 100,000 AA miles are worth close to seven times the value of your Capital One points! To redeem that same flight with Capital One, you would need to have 690,000 points or spend $345,000!

And here is another example. Let’s say you want to fly Emirates first-class from Los Angeles to Dubai:

That ticket costs $25,000! You could redeem 90,000 Alaska Air miles for the flight. But if you wanted to redeem Capital One points, you would need 2.5 million points!

“OK, but if I get an American Airlines, Starwood, or United card, I’m only getting one point per dollar. Capital One gives me two!”

That’s true, but if you spend $50,000 on your AA card, those 50,000 points can be redeemed for a one-way business-class flight to Japan worth thousands of dollars! If you spend the same on Capital One, it’s worth $1,000. Capital One points have little value.

Additionally, there are cards that give great category bonuses, such as multiple points for travel, shopping, food, gas, and groceries so it’s not always one for one. Capital One is always the same: two miles per dollar spent.

Moreover, many other credit cards come with perks that are also worth something, from free checked bags, priority boarding, lounge access, Internet at hotels, and much more. Capital One gives you nothing. Plus, there are dozens of other cards that offer no foreign transaction fees.

The redemption value of Capital One makes it a horrible card to get for a travel hacker.

Capital One is essentially a 2% cash-back card ($50,000 = 100,000 = $1,000 = 2% of $50k) but there are much better cards. The Citi Double Cash Card gives you 2% cash back with no annual fee and can be used for any purchase, not just travel. The American Express Blue Preferred gives you 6% cash back at supermarkets, 3% at gas stations and department Stores, and 1% everywhere else, so when used heavily on groceries and shopping, you can earn more than 2% on average.

If you don’t want to be tied down to one airline, flexible point credit cards like the Chase Sapphire Preferred, Citi Premier, or American Express Gold card can offer much more value than Capital One.

In short, there’s no reason to ever get a Capital One Venture Card if you even remotely care about earning points and miles for free travel.

Note: This posts refers to the Venture Card, which comes with a $59 annual fee. The VentureOne has no annual fee but only earns 1.25 miles per dollar spent, making it even worse! Definitely don’t get that one!

The post Why You Should Never Get a Capital One Card appeared first on Nomadic Matt's Travel Site.

November 19, 2015 at 03:00PM

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