I see more Capital One credit card commercials than all of the other card issuers combined. Watch one televised sporting event and Capital One will have at least 3 commercial segments, featuring the celebrity of your choice – Jennifer Gardner, Alec Baldwin, Samuel L Jackson – take your pick!
With so much exposure through celebrity advertisement, I receive the question from friends and family – is the Capital One Venture Card (or really any Capital One Card, for that matter) a good card to have?
Well… it depends…
Personally, I do not have one and have no future plans to apply for one. While that may not be the single data point you take into consideration, keep in mind that I am up to 17 total credit cards – so I am not exactly overly-selective when it comes to which cards I put in my wallet.
But, for those of you that are interested in the card, I have put together some of my thoughts about the Capital One Venture card – the Good, the Bad, and the Ugly…
The Good – The initial sign-up bonus.
The current sign-up bonus comes in at 40,000 “miles” once you spend $3,000 on purchases within the first 3 months, accompanied with a $59 annual fee (waived the first year). These 40,000 “miles” can be worth up to $400 in statement credits for various travel expenses – including airfare, hotel stays and more!
Sounds like a pretty solid sign-up bonus to me… right?
In my opinion, a credit application (and resulting hard inquiry) sign-up bonus should provide AT LEAST $400 in value. While not set in stone (each applicant will have different priorities and credit situations), the $400 mark is a fairly easy value to achieve, so if you find yourself below that threshold on a credit card offering, it might be wise to consider other options…
Verdict – The Capital One Venture Card is a Good pick for the valuable sign-up bonus.
The Bad – Everyday Spending – Earning 2x “miles” < Earning 2% Cash Back
With the Capital One Venture card you will earn 2x (double miles) on all purchases, and never have to worry about those rotating bonus categories (like on the Chase Freedom, for example) – great right? Well, kind of…
With the Capital One Venture, you will earn 2x “miles” on every $1 spent. These “miles” can then be redeemed for travel purchases at the rate of 2,500:$25 – for TRAVEL RELATED PURCHASE ONLY. Redeeming for anything other than travel will provide you with a worse ratio.
Exhibit A –
- Spend $2,500 on your Capital One Venture card
- Earn a total of 5,000 “miles” ($2,500 x 2)
- Redeem 5,000 “miles” for $50 in statement credits… for travel expenses only!
Results – $2,500 in spend will earn you $50 in statement credit for travel expenses… making it a 2% cash back card for TRAVEL ONLY.
Remember, if you decided that you want to redeem your “miles” for anything else, you will be forced to redeem at a more unfavorable rate, meaning that this card will earn you less than 2%…
Compare that to a no annual fee standard 2% cash back card like the Citi DoubleCash and you are essentially paying $59 a year in order to receive less flexible cash back?
That said, the Citi DoubleCash does not have a sign-up bonus, so keep that in mind.
Verdict – The Capital One Venture Card is a Bad pick for everyday spending.
The Ugly – The “miles” are not actual miles…
This is my biggest issue with the Capital One Venture card. The card advertises (ad nauseam) that you will earn miles… yet, instead, you earn “miles”– which are actually just points that can be used for travel credits (as I described above) – hence my use of the “”. While definitely more flexible, the “miles” you earn with the Capital One Venture card will not provide you with the same access to the bigger and more complex redemptions like actual frequent flyer miles will. With Venture card “miles” you will be limited to targeting low-cost travel options, considering the price in $ and price in “miles” are directly correlated (i.e. a $500 plane ticket will cost you 50,000 Venture”miles”).
Here is a quick example of one of those bigger and more complex travel bookings and the difference between using Capital One Venture “miles” and one of my favorite frequent flyer miles – American Airlines AAdvantage miles:
A Direct Business Class Round-Trip from Dallas to Tokyo on October 10th – October 17th:
Cost using American Airlines AAdvantage miles – 120,000 AAdvantage miles (per the AA Award Chart)
Earning 120,000 AAdvantage miles :
- Citi AAdvantage Platinum Mastercard sign-up bonus for 50,000 AAdvantage miles
- Spend a total of $70,000 for 70,000 AAdvantage miles,
Bringing your total miles to 120,000 – enough for a round-trip to the other side of the world… in Business Class!
For the purpose of this example, we can assume that you have no other (and better) means to acquire AAdvantage miles other than spending on the co-branded credit card.
Cost using Capital One Venture “Miles” – 358,700 Venture “Miles” (the equivalent of $3,587 in paid fare)
Earning 358,700 Capital One Venture miles :
- Capital One Venture Card sign-up bonus for 40,000 Venture “miles”
- Spend a total of $159,350 for 318,700 Venture “miles”
Bringing your total “miles” to 358,700 and enough to redeem for the trip in Business Class.
In addition to the single credit card sign-up bonus, the difference in spending on the Citi AAdvantage Platinum and the Capital One Venture amounts to $89,350 –that’s a HUGE amount of spending!
Verdict – The Capital One Venture Card earns you “miles”, rather than traditional frequent flyer miles, and it can get really Ugly when it comes to redeeming those “miles” for bigger and more complex travel!
The Capital One Venture card may be worthy of some space in your wallet (for a limited time while you meet the minimum spending), as long as you know how to use it given the Good, the Bad and the Ugly!
Good for the initial sign-up bonus of 40,000 “miles” ($400 in potential value).
Bad for everyday spending given the card is essentially 2% cash back – limited to travel expenses only.
And Ugly when it comes to trying to redeem Venture “miles” for bigger and more complex travel (like Business Class travel from the US to Tokyo)!
I really do think that there is value to be had with this card and in my experience I have been able to achieve great value with similar reward programs like the one offered by the Barclaycard Arrival Plus. When it comes down to it though, Capital One is much better at advertising than they are at providing people with valuable rewards to achieve their travel dreams…
I hope this helped all of you potential (and existing) Capital One Venture cardholders out there!
Do you agree or disagree with my opinion on the Capital One Venture card?
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