Capital One Rewards Program Really Worth It?

Posted by CreditCardGuru

Their tagline is Capital One No Hassle Rewards… but do they live up to expectations? What are the advantages and disadvantages for each program?

Admittedly, Capital One credit cards didn’t always have the best rep. During the ‘90’s and early ‘00’s the company faced the struggles of rapid growth, compounded with a large number of sub-prime customers.

However much has changed since then – it’s a totally different company. They’ve been honing in on continuously improving customer service and nipping the other complaints which plagued them in the past. Today they offer great credit cards whose quality competes head-to-head with Citi, Bank of America, Chase, and other rivals.
And their rewards? Well, they really do live up to their “no hassle” motto. However like any credit card, each Capital One rewards program has its pros and cons which you should know about.

Let’s review how they work, from most to least popular…

#1. Venture Rewards Program

Yes, this is that card made famous by those Vikings. However here’s what you may not know is that there are actually two different cards which use this program:

  • Venture Rewards – $59 annual fee, 2 miles per dollar
  • VentureOne Rewards – $0 annual fee, 1.25 miles per dollar

And that brings us to the question… how do these “miles” work? Well the easiest way to think of them is the equivalent of $0.01 each, because when you redeem them for a travel purchase that’s how much they’re worth.

Biggest advantage: A truly “no hassle” rewards program. With the $59 version, the 2 miles per dollar is like earning a 2% rebate (if you redeem for travel).
Biggest disadvantage: If you have a favorite airline you regularly fly, sometimes you may be better off with the airline-branded card. Why? Because some frequent flyer miles end up being worth more than $0.01 each.

You can learn more about the Capital One Venture Cards here.

#2. Spark Rewards Program

The Spark is Capital One’s newly launched line of business credit cards. Because there are a few different versions, it’s best to head on over to the Capital One Spark card review if you want to learn more about them.

The programs discussed below have been discontinued

#3. Cash Rewards (no longer available)

Capital One actually has a couple different reward programs for cash rewards.

Cash Rewards credit card (this card is no longer available) – This one is their latest cash back card. It gives 1% on your spending. Then at the end of the year, it gives a 50% bonus on all the cash back earned during that year. The end result is a total of 1.5% cash back. This one is aimed at those with excellent credit.

“No Hassle” Cash Rewards (this card is no longer available) – With these cards there is no waiting to get the cash back – depending on the card, you might get 1% on regular spending and 2% on one or two categories. The Capital One “No Hassle” cash rewards program have been around a while.

Biggest Advantage: Cashing out is pretty easy. There’s no minimum amount needed to request a statement credit or to get a check. Their newest Cash Rewards card gives an above-average payout on non-category spending.
Biggest Disadvantage: With the Cash Rewards card, the wait for the extra 50% cash back is a drawback.

#4. No Hassle Miles Program (no longer available)

Update: As of Nov. 2011, I no longer see any cards on Capital One’s website with the no hassle miles rewards. My guess is they are phasing this out, which I applaud them for because I wasn’t the biggest fan of it.

capital one rewards redemption chartWith this program you also earn “miles” but instead of always being worth $0.01 each, they are worth “up to” $0.01 each through a tiered redemption system (mile chart pictured on right).

The reason I’m not a fan of this is obvious – you don’t always get the best deal. For example, a $350 flight for 35,000 gives full value, but then if the flight was $351 ($1 more) over 70% more miles would be needed for it.

Biggest Advantage: Miles that can be converted to cash value and used for any travel purchase.
Biggest Disadvantage: The tiered redemption system.

#5. Points Program (no longer available)

What is probably their least common rewards program is the one for points. As I’m writing this I only see two cards on their website that give points – the MTV Visa card and the Orbitz Visa card (update: no longer available).

Upon reviewing the Orbitz Visa card, the webpage lists this example:

Redeem your points for travel, cash, gift cards and more. For example:
35,000 points = $350 flight
15,000 points = $150 hotel room

Upon clicking on the application, further details are provided and the same tiered system (as discussed above) applies to this Capital One rewards program, too.

The MTV Visa card points can be used for travel, gift cards, merchandise, events, and cash. How do the points convert over? Well, here are some clues which are accompanying the application:

The number of points required is based on the cost of the chosen reward. For example, you could get $25 in cash back for 5,000 points, redeem for a gift card worth $50 for 7,750 points, or even redeem for great brand-name merchandise worth $100 for 20,000 points.

So with this card, it appears the cash value for at least some of the redemption options is less than $0.01. While this is a drawback, something to keep in mind is that (a) this is a starter card for young adults, and (b) it gives bonus points at restaurant and on entertainment purchases.

Biggest Advantage: Both card offer the opportunity to earn bonus points on eligible categories.
Biggest Disadvantage: The rewards point redemption may yield value of less than $0.01 each.

Verdict?

With most credit card companies, every time they come out with a new rewards program it’s worse than the last. However it’s refreshing to see Capital One is different; every new rewards program they launch is better than the last. All of their latest programs (i.e. Venture, Spark) are definitely worth considering and truly do live up to that ol’ tagline of being “no hassle” rewards.

3 comments... read them below or add your own

  1. ernest harris October 19, 2011 at 9:17AM

    I got a Capital One No Hassle Rewards card at a 9.90 APR. After I had it for a while I was sent notice that my interest rate was going to be increased to 21%. I decided to close the account because I had never been late on a payment. I had accumulated 11,766 points that I had never used. I made my final payment today and I inquired about how to redeem the points. I was told that since I did not accept the new interest rate and opted to close my account, I can not redeem the points.

  2. Sally August 11, 2011 at 6:56PM

    An important thing to consider, when using a Capital One Venture Card to rack up miles…

    If you like to fly Business Class, it is a bit better to use the American Express mileage program (can be used for many airlines), United Airlines Mileage Plus Visa, or any of the other airline credit cards. To accumulate enough mileage, you will spend approximately $2000 – $3000 more (in purchases, to accumulate the miles) with Capital One, to travel to Europe.

    If you use your mileage for a roundtrip First Class ticket to Europe, the savings are much greater to use the mileage from the other credit cards.

    Example: First class United Airlines RT is $11,408 to $11, 984. United Miles needed for a free RT ticket to Europe = 295,000. This can come from United VISA credit card or American Express Card. Both programs are $1 = 1 mile. So you had to spend $295,000 to accumulate this mileage.
    To book this on a Capital One Credit Card, using the cheaper fare, you must have spent 11,408 X 100 = 1,140,800 / 2 = $570,400.
    So you would spend $275,400 more in purchases, to get your First Class ticket using a Capital One Venture Credit Card.

    Yes, Capital One gives you 2 miles for every dollar spent. The problem is that you must add 00 to the cost of your ticket, to pay yourself back with miles. Keep this in mind, if you decide to use it as your main credit card.

    Capital One for Mileage is great if you always travel in Economy to Europe. Or you like the advantage of being able to purchase any ticket, any time. Or if you travel in the United States, and not many miles are required for a “free” ticket.

    It also looks like you can credit your Capital One Venture account with your mileage at any time…you don’t have to travel anywhere.

  3. Maverick May 11, 2011 at 12:22PM

    I acquired a Capital One during college (circa 2007) and now I wish I would have been more selective. I am hoping that I can get into a new card sooner than later!

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