Is The Capital One Venture Card Underrated?

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Cash back cards are more attractive than ever before, given how complicated airlines are making their frequent flyer programs. Beyond that, with the constant devaluations from airlines, each mile seems to be worth significantly less year-after-year.

This is one reason the Capital One® Venture® Rewards Credit Card has done so well, as they’ve based a lot of their marketing around what a hassle it is to redeem airline miles, like in this commercial:

Last year I wrote a post entitled “Why You SHOULDN’T Get The Capital One Venture Card,” which a lot of people took issue with. My point was simply that there were cashback cards which were more flexible and had no annual fees, but it was (correctly) pointed out that I wasn’t factoring in the sign-up bonuses.

In this post I figured I’d compare what I consider to be the two best travel cashback rewards credit cards, and then share my thoughts on whether they’re worthwhile, hopefully with a more well-rounded analysis.

In my opinion, the two most compelling travel cashback rewards cards are the Barclaycard Arrival Plus™ World Elite Mastercard® and Capital One® Venture® Rewards Credit Card.

The marketing on these cards can get complicated, given that they advertise earning “miles,” even though it’s really a cashback card. So I figured I’d break down how these cards really work.

To start, here’s a chart comparing the basic characteristics of these two cards, which I’ll explain in more detail below:

Capital One® Venture® Rewards Credit CardBarclaycard Arrival Plus™ World Elite Mastercard®
Sign-up bonus$500 towards travel after spending $3,000 within 3 months from account opening~$420 towards travel after spending $3,000 within 90 days of account opening
Annual fee$0 intro for first year; $95 after that$89 - Waived first year
Return on everyday spend2 cents per dollar spent towards travel~2.1 cents per dollar spent towards travel
Foreign transaction feesNone0%
Minimum redemption amountMinimum of 2,500 points ($25 statement credit)Minimum of 10,000 points ($100 statement credit)
Eligible redemption categoriesairlines, hotels, rail lines, car rental agencies, limousine services, bus lines, cruise lines, taxi cabs, travel agents, and time sharesairlines, hotels, motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, trains, buses, taxis, limousines, and ferries
Time limit to redeeming points90 days120 days

Capital One Venture Card benefits

The Capital One Venture Card offers 2x miles per dollar spent, and each mile can be redeemed for one cent towards the cost of a travel purchase. Eligible purchases include those made with airlines, hotels, rail lines, car rental agencies, limousine services, bus lines, cruise lines, taxi cabs, travel agents, and time shares.

When you’re ready to redeem your points, just make your travel purchase with the Venture Card, and then within 90 days you can request to have the purchase “erased” by redeeming points. You have to redeem a minimum of 2,500 points, which translates to a $25 statement credit.

This card offers a sign-up bonus of 50,000 miles after spending $3,000 within the first three months. Given the value of one cent per mile, that means your 50,000 miles can be redeemed for a $500 travel purchase.

Barclaycard Arrival Plus Card benefits 

The Barclaycard Arrival Plus Card offers 2x miles per dollar spent, and each mile can be redeemed for one cent towards the cost of a travel purchase. Eligible purchases include those made with airlines, hotels, motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, trains, buses, taxis, limousines, and ferries.

When you’re ready to redeem your points, just make your travel purchase with the Barclaycard Arrival Plus Card, and then within 120 days you can redeem your points for statement credits against those purchases. You have to redeem a minimum of 10,000 points, which translates to a $100 statement credit.

This card offers a sign-up bonus of 40,000 miles after spending $3,000 within the first three months. Given the value of one cent per mile, that means your 40,000 can be redeemed for a $400 travel purchase.

There’s one added feature on this card, though. You get 5% of the miles back to use towards your next redemption every time you redeem points. This means that points are really worth ~1.05 cents each, meaning your return per dollar spent on the card is ~2.1 cents per dollar, and the sign-up bonus is potentially worth ~$420.

Comparing the two cards

Let me focus on the aspects of the card which I consider to be important. The exact categories on which you can redeem points and redemption window doesn’t really matter to me. Similarly, let’s assume you don’t care about the redemption minimum, to keep the math simple (though if that’s something you care about, you can do the math differently). Here’s the most significant comparison between the cards, in my opinion:

That’s because that’s the breakeven point of the additional return you get on the Arrival Plus vs. the $6 per year higher annual fee.

Ultimately the cards are very similar. We’re talking about a minimal difference, and it’s not accounting for the minor pros and cons of each card (with the Arrival Plus Card you can redeem points for a window of an extra 30 days, while with the Venture Card you can redeem for smaller purchases).

Alternative cashback options?

I’ve written in the past about the Citi® Double Cash Card, which offers 1% cash back when you make a purchase, and 1% cash back when you pay for the purchase. To me that’s the equivalent of a 2% cashback credit card.

Citi-DoubleCash

What makes this card different than the Barclaycard Arrival Plus™ World Elite Mastercard® and Capital One® Venture® Rewards Credit Card?

  • The Citi® Double Cash Card has no annual fee
  • Cash earned on this card can be redeemed towards anything, and not just travel purchases
  • This card has 3% foreign transaction fees, unlike the above cards, which have no foreign transaction fees (so this isn’t a good card to use when traveling internationally)
  • This card doesn’t offer a sign-up bonus

Purely in terms of return on everyday spend in the US, I think the the Citi® Double Cash Card is tough to beat. You earn 1% on purchases and 1% as your pay for those purchases, so getting the equivalent of 2% cashback without an annual fee is fantastic. The “catch” is the lack of a sign-up bonus and the foreign transaction fees.

Based on what metrics would I compare the Citi Double Cash Card to the Arrival Plus Card or Venture Card?

I’d say the most significant metric is how long you plan on holding onto the card, which allows you to compare the benefit of the sign-up bonus against the cost of the annual fee. So let’s look at the breakeven point of the Citi® Double Cash Card against either of the above travel cashback cards:

  • After having had the Capital One Venture Card for seven years, you’ll have paid $570 in annual fees ($0 intro for first year; $95 after that), and will have received a ~$500 sign-up bonus
  • After having had the Barclaycard Arrival Plus Card for five years, you’ll have paid $445 in annual fees ($89 - Waived first year), and will have received a ~$420 sign-up bonus

Bottom line

For most consumers, there’s a lot of merit to cashback cards in lieu of traditional points earning cards. The question is which card makes the most sense. Of course everyone has to crunch the numbers for themselves based on what they value most (and hopefully I’ve provided a decent basis for doing so above), but in general:

  • The Capital One Venture Card is more rewarding than the Barclaycard Arrival Plus Card for those who spend less than $6,000 per year on the card, since that’s the breakeven point for the $6 annual fee difference
  • The Citi® Double Cash Card offers a very similar return to the above cards, with the added flexibility of not having to redeem the cashback towards travel; the card also doesn’t have an annual fee
  • Whether or not it’s worth paying that annual fee probably depends on how long you plan on keeping the card, given the annual fee vs. the sign-up bonus; with the Capital One Venture Card you’re coming out ahead until year seven, while with the Barclaycard Arrival Plus Card you’re coming out ahead until year five

The truth is if you’re looking for a cashback credit card which you want to redeem towards travel purchases, you can’t go wrong with any of these cards.

What cashback card do you think offers the best return?

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Comments

  1. I have the CO Venture card. While I wouldn’t use it for airline tix or hotel stays, there is value there. For example, I’ll be using it to cover the cost of a car rental coming up. Also, we are using points to cover a cabin stay in the mountains, when we deliberately didn’t want to stay in a standard hotel. I personally prefer the Venture over a cash back card because the “cash back” would disappear into my golf bag or cigar collection, instead of earmarked for travel.

  2. I know you are starting from the point of view of folks that want redemption ease in their lives… But, for folks that are looking to use a blend of miles/points cards as well as either of these casback cards, i think Cap One easily has the edge over Barclay. This is because, its the dribs and drabs of travel expenses (not bonused by other cards) that i like to cover with these cards… not mainline expenses like hotels or airfare (spend better placed on other cards). So, I’d cleary be under 30k in spend with just residual travel expenses. My Barclay card hasn’t yet changed over to $100 min redemption but i also interpret that to mean that the charge i can “cancel” needs to be at least $100. Much $100+ travel expenses are better placed on other cards. (again, this assumes that one wants to deal with the hassle/complexity of managing transferrable pts (UR, MR) or airline/hotel miles/pts).

    As to why I would want to deal with Cap One or Barclay vs. any other 2 percent card? Its just as you laid out. The signup bonus, and then cancelling well before 6 or 8 years for a different 2 percent card.

    However, one might plan to scoop up both ~400 bonuses especially as other banks crack down on sign-ups! Easy money…

  3. For me, a killer combo would be the Arrival Plus to get the signup bonus, then downgrade to the Arrival, as well as the Double Cash card. Then you get the no foreign transaction fee and Chip + PIN on the Arrival so you use it overseas, but use the Double Cash card while in the US. And because you have downgraded to the Arrival, you pay no annual fee. This works well for people who go overseas on a regular basis, I think.

  4. I prefer the Bank of America Travel Rewards Card. If you are not a B of A customer, would avoid (only get 1.5% cash back, choices you reviewed above are better), but if you are a B of A customer you can get unlimited 2.625% cash back on all purchases. Signup bonus isn’t as good (20,000 points) but there is NO annual fee, no foreign transaction fee, can use points 2,500 at a time, and you can take up to one year to get reimbursed.

  5. While it maybe easier to use the points, I still don’t see the value in the 2% cash back. I am going to Hawaii with my family next year and flight alone is $1000 each. Family of 4 is $4k that is $200k in spend to earn that. Thats a lot of money. And cash cards do not usually have bonus categories.

    Or fly on united at 45k points each or 180k for the whole family and a lot easier earned with Chase Ink card with their 5x categories. I will side with points card over cash card.

  6. About 5 years ago I did the offer with Capital One where they matched miles. I was able to max that out and get 100,000 Capital One miles. Could that get me to Europe in First? No. It was basically worth $1000 towards travel. That is not bad at all, but I’d rather do the work and be flexible on dates and destinations in order to be in First on a long haul flight.

  7. I agree with Juno

    If you know how to book award travel, you get a much bigger bang for your buck. These cash back cards are popular for folks that don’t have time to play the points game. My brother has to fly every week for business. Most of his flights are booked less than a week out. So, he really racks up the points (the hard way). He used all his points to fly his family (4) out to Hawaii last summer. The best he could do was economy plus, plus he had to cough up some $$ too. I flew my family (3) to Shanghai and then back home from Hong Kong in Business for about $160, and the only flight I paid for last year was a $100 ride on Jet Blue. I tried explaining how the system works to him, but he says he’s just “too damn busy” to deal with it.

  8. Just picked up both these cards to specifically use to pay for WDW tix for the fam. Three tix on one; three tix on the other. It’s been an excellent exercise to compare the cards. Something that I find important is whether or not the points post quickly and how quickly transactions post in order to juggle things most efficiently.

    I have found the $100 min “redemption” and considerable purchase posting lag on the Arrival+ to be a huge issue. However, the bonus posted as soon as I completed the min spend (contrary to what the rep said) and the 5% gave me closer to a $470 bonus in the end. Cap One was on my bad list after failing to get my card to me 2x. The third call I got an amazing customer service rep to overnight it for me. Jury is still out on that one, but all transactions post quickly and the qualified travel is very transparent.

  9. Great timing of this post Lucky and it’s good to see you analysis. I was contemplating getting a travel rewards cards about a week or two ago and looking at these two cards along with the BoA card. My main goal was to find a card to cover smaller travel fees that come up and also to find a card with a sign up bonus like these, figuring the approx $400 would last a few years, then I would churn the card or go to a similar. I decided on the Cap One because of the min redemption of the Arrival + being a bit high, but then I heard they pull from all three credit bureaus so I hadn’t applied yet. I then put this on hold as I went after an Ink card and then SPG pandemonium hit yesterday so I will come back to this in the summer.

  10. If you’re going to maximize cashback (which is a valid POV, for many who can’t ‘play the game’ for miles), wouldn’t it be superior to have:

    -Citi DoubleCash for domestic purchasing (2%)
    -CapOne QuickSilver for international/foreign spend (1.5%, no FTF)

    For the .6% difference vs the Venture card AF to pay itself back, you’d need to spend $9833 in foreign currencies/abroad, or $59k domestic vs the DoubleCash.

    That said, there’s a valid game to be played if you’re wiling to churn for the signup bonuses. But Lucky probably can’t advocate that with his affiliate agreements 🙂

  11. I just returned to focusing on these spending bennies after dealing with some health issues. I love how this blog details the “how” to compare so a thoughtful consumer can search and consider and choose. After my research using the logic laid out here I had chosen the Capital One Venture card before it was recommending it. Of course I’d like to say the point is how I was right but that isn’t it. This blog, like I said, explains the “how” to research these bennies so I give credit to this blog for helping me make a really good choice for my spending, lifestyle habits and travel style. Good stuff!!!!

  12. Such weird comments on this post. Definitely not Luckys usual commenters. I wonder if he pays people to post. These look a lot the the FB posts that accompany TPGs ads.

    Get a capital one card and a Barclays card. Just be sure to cancel them the next year before the annual fee posts. Rinse and repeat.

  13. I had both, but cancelled the Capital One in favor of Barclays because only Barclays is Chip + PIN and that may come in handy some day.

  14. @ carole…
    How did u get the points to qualify for WDW tkts? I’m planning for Universal this summer and have heard about certain travel sites that MIGHT work. I’d love your knowledge. Thx!

  15. I got the CapitalOne Venture back when they had the 100,000 match bonus. I have kept it all these years because
    a) they gave me a very high credit limit
    b) the statement date just happened to nearly always maximize my float time.
    I use it as my go to card for large charges because of a) and b).

  16. @Steve the Fidelity cash back card card doesn’t pay a commission.

    I like a lot of the content on this blog, but this is a credit card sales post. This isn’t about the cards – there’s affiliate links to all of them here. It doesn’t matter which way the “analysis” goes, as long as you pick one, click the link and are approved, it’s a couple hundred dollars to the affiliate (this blog).

    And yes, a lot of the comments do look to be rented. It’s not particularly expensive to purchase a certain number of comments/likes/retweets/forum posts. You pay a little more for them to appear in-context, meaning the comment itself is actually responsive to the text in the post, rather than a generic “Great job!” But it’s cheap and effective.

  17. @Ed & @Tom – I’d love to be paid to post. Where can I sign up? 😉
    @Sherri – I use a travel agent that offers discounts (small, but worth it) for tix like Park Savers or Undercover Tourist. Disney doesn’t qualify as travel. I actually purchased them as six different transactions — so I could get the 5% back and then apply to the next ticket (for Arrival+). Just take a look at the timeframe 90 days vs 120 days and make sure your minimum spend bonus posts in time. The tix DO count to the min spend.
    @Lucky Sorry for the hijack.

  18. @ Carole..Thanks Carole! So theoretically, if I get the Barclaycard, and have minimum spend by end of May with the last thing to complete the minimum spend be the tkts… all should go well? Going in June, no time to make min spend on both cards.

  19. @Sherri Apply today. Get the card in two weeks. In theory, you have 10 weeks for the spend, but as soon as you hit $3K it should post $460 (2x pts for spend) to spend toward your purchase. Purchase must be at least $100 to qualify for reimbursement but you can put your $460 towards an amount that is more than that. I found that the amount you can put toward a purchase is a pre-determined amount online (ie purchase is $400, the amounts will be $400/$375/$350), based on the total you have availalbe. If you don’t want to actually have any cash outlay for the tix, I would buy those with the last $1K for your min spend. Just look closely at the close date for the statement and remember that this card is VERY slow to post transactions — sometimes they don’t even show up as pending for a day or two. If you want to get all crazy and double-dip, the 5% posts immediately and can be applied right away to another item on your travel list (hotel, etc if you only have a few tix). Happy travels!

  20. Careful with Cap One because they do Hard Pulls with all 3 bureaus, then they deny your app if you have too many Hard Pulls on your report. 🙁

    They did that with me a few years back with the 50K match offer. I documented having spent $50K the prior year with Citi, which one would think would make me a valuable customer to gain. But I got a quick denial for “too many recent inquiries”. They do not play well with others….

  21. @Carole..Thx! I never would have thought to purchase in 2 transactions. Great help with everything. 🙂

  22. Might you have any thoughts on how this relates to the CapitalOne Venture ONE card, which is what I have? It has no annual fee.

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