Why I Don’t Have the Capital One Venture Card

One of the questions I frequently get from friends who are interested in learning how to leverage credit card rewards into great travel opportunities is — what about the Capital One Venture Card?   They either have it, or think they should get it.

It’s not surprising that the question comes up so often.  Capital One has several slick and pervasive ad campaigns  (Hello Jennifer Garner and Samuel L. Jackson).

What does the card offer?

2 Venture “miles” for every dollar charged on the card.   Currently, a 40,000 “mile” bonus after spending $3000 within 3 months.   Annual fee of $59, waived the first year.

So what does that mean?  After you’ve spent you will have 46,000 Capital One “miles.  That will get you exactly $460 worth of travel, no more, no less.

If you spend a total of $10,000 on the card in the first year, you will have 60,000 Capital One “miles”  (40,000 from the sign up bonus, and 20,000 from the spend, which is credited at 2 “miles” per dollar. )  This is  equivalent to $600 in travel — no more, no less.

The strong argument in favor of this card is — as Jennifer and Samuel let you know in their very frequent ads — it’s very easy to use those “miles.”  You just book the travel you want, and then apply the “miles” as a credit to your charge statement. No fuss.  Use the miles for travel anytime.

What’s Your Goal?

As with most credit card offers, in order to fully evaluate it, you need to determine your goal.  There are times when the 2 “miles” offered by the Venture card is great.  If you are generally purchasing low cost domestic economy flights, this card is going to be a good deal for you.

But, if you are considering getting into the “points game” you are probably trying to step it up, and enjoy more distant and/or luxurious travel.   You’ve seen the bloggers who travel the world on the cheap, or trip reports from business class and first class travelers who are sipping champagne while reclining in their sky beds.  The Capital One Venture card is not going to help you achieve those goals.

Compare — Can you do better with another card?

For international travel and travel in premium cabins, you will virtually always do much better with a card that offers you points in an airline’s frequent flier program.

For example, if you have 40,000 American Airlines AAdvantage Miles, you can use those miles to fly round trip to Europe in coach class between October 15 and May 15.  That’s a ticket that is most likely worth at least $800 — and probably more, depending on where you are flying. So, in this case, you get twice the value out of your AA points.

Even for domestic coach tickets, Venture is not always your best bet.  Most airlines offer a base round trip coach domestic ticket for 25,000 miles.   This includes transcontinental flights that are usually more than $250.  So if the ticket you are thinking about buying with your Venture miles costs more that $250, you can frequently do better with another points currency.

For business class to Europe, a paid ticket would most likely cost you at least $3000  (and usually much more).  You would need 300,000 Venture miles to get that ticket  (meaning you would need to spend $150,000 on the card.)   But you can get an AA Saver award in business class to Europe for 100,000 AA miles – and you can usually get that with two credit card signups.

So yes, you can do better.   And that’s why I don’t have this card.  It is a good card, and you can get value from it.  But it doesn’t fit in with my goals, so I prefer to use other cards.

A Good First Step: Chase Sapphire Preferred (UPDATED: INCREASED BONUS NOW)

If you are interested in getting started in the travel points game, a great place to start is with the Chase Sapphire Preferred Card. It’s always been a great travel rewards card. It was one of the first I got, and I still have it. And — important — internet sources are saying that later this month the normal bonus offered is about to increase. So now is a good time to start thinking about getting into the game.

Chase Sapphire Preferred — An Excellent Source of Flexible Travel Points

If you read the various blogs about travel rewards, you will quickly discover that one of the favorite credit cards to get is the Chase Sapphire Preferred card. Why? When you use your card, you earn Chase Ultimate Reward Points. UR points are flexible. That means, you are not locked into using them on one airline, or at one hotel. Chase has a number of travel partners, including: British Airways, United Airlines, Hyatt Hotels, IHG hotels, Marriott hotels, and others. You can transfer your Chase points to the program you need, when you need.

Why This Should Be One of the First Cards You Get.

Chase Sapphire Preferred should be near the top of your list of applications, for a very important reason.

Chase has previously been very generous in approving lots and lots of applications, without too much focus on your other credit lines (Obviously, you always need a decent credit score to succeed).

However, in the past few months there have been many many reports that Chase is “tightening up” and is NOT approving applications if they see that you have applied for more than about 5 cards in the past 2 years. If you eventually get seriously into this game, 5 applications in 2 years is kid’s stuff. (I have been averaging 10-12 applications per year for the past 3 years, and even that’s not all that high for real gamers.) So, if you want to get the Chase Sapphire Preferred… and I strongly suggest that you do want to get it … then apply for it early.

Why You Should Think About Getting This Soon: Expected Increased Bonus.

The usual offer for the Chase Sapphire Preferred card is: Earn 40,000 Ultimate Rewards points after spending at least $4000 in the first 3 months. Annual Fee is waived the first year, $95 per year after that.

The Blogosphere is reporting that the offer is about to be increased later this month, for a limited time, to a total of 55,000 points.    See Frequent Miler  Earn 50,000 points after spending $4000, and earn an additional 5,000 points for adding an additional user (No worries – you can name anybody, and you don’t have to give the card to that person.)  This is not a rumor anymore.  The new offer is out: 50,000 points after spending $4000 in 3 months; another 5000 points for adding an authorized user who makes a purchase.  Annual fee waived first year.

In summary, time to start thinking.   Are you in the game or not?   If you want to dip your toes in the water (or jump in),  looks like the time will be right in a few weeks.   I’ll keep an eye on this, and post again when the new offer becomes available.

Other Important Points:

Had It Before? —  If you’ve had the card before (or have it now) you probably will not be eligible for a new bonus.   We will need to wait for the new offer to see exact terms and conditions, but in most cases you are not eligible if you’ve had this card or received a bonus for it in the past 2 years.

Couples — in order to maximize your points, BOTH of you need to be applying individually for your own credit cards.   Joint accounts don’t do anything to increase your sign up bonuses.  So, if one of you had the card before, the other can still apply for a card and be eligible for the bonus.   In most cases, being an authorized user on a card is not the same as being the cardholder, and will not impact your eligibility to get the bonus.

Be Sure to Transfer Points Before Closing Account — for the Chase Sapphire Preferred (and similar flexible points cards like Citi Prestige or various American Express cards) it is very important to remember that you need to transfer the points out to a travel partner BEFORE you close the account. If you have points still left in the account at the time you close it, you forfeit those points.