CapitalOne Venture Card vs. Airline Cards

A reader of our blog, Andy, asked me what I thought about the CapitalOne Venture Card. It is well advertised on TV that it earn two points per dollar charged. My co-blogger, the Nomad rated it as one of the Best ‘other’ rewards Card. Good deal or not? As I started typing my response to Andy’s email, I realized that I was really giving him a comparison between the Venture card and a typical Airline Miles or Hotel Points card. I decided to give Andy my response as a blog post. So, here goes. Andy, thanks of asking.

As I have mentioned before, the the value of any rewards program can be determined by three factors:

• Status earned – What Status can you earn by using the card?
• Earn rate – What is your rate of earning rewards?
• Burn rate – What does it take to redeem rewards?

Status:

This is one area where the Venture card falls flat. It earns no Elite status towards any program (airline, hotel or other). All you earn is points. The one redeeming factor here is that when one redeems Venture Card points for free travel – be it an airline ticket, a hotel stay or a car rental, the travel vendors consider these as revenue events and not as rewards. So, they not only earn you miles or points at a normal rate, but also earn you the associated Status Miles or points. In comparison, when you redeem say airline miles from a frequent flier program for a free airline ticket, you do not earn any miles – Redeemable or Status – for that flight.

Earn Rate:

The big plus of the Venture card in this area is that it earns two points per dollar spent, irrespective of where you send them. That is a good earn rate. Some airline miles cards do earn double miles, but they are typically only for groceries, gas, etc. No double miles for say utility bills. Venture Card gives you two miles on even your sewage bills.

Burn Rate:

There are several factors to consider here. At the end of the day, it is all about how many points you need to redeem to get a reward, not how many you can earn. Rewards that are too expensive to redeem are worthless. The Venture Card here makes the answer, unfortunately, ‘it depends’. The way the Venture Card redemptions work are nothing like those for Airline or Hotel Cards. Using the venture card, you make a travel expense. Be it an airline ticket, hotel stay or car rental. You then redeem points to get a credit on your credit card statement to offset the expense. Each dollar of expense requires 100 points to redeem. This is exactly where the ‘depends’ part comes in. The value of your redemption and the fact whether it is a good deal or not, depends on its price.

This is very unlike Airline Miles cards and Hotel Cards. They usually have a fixed redemption rate for a certain type of travel event. For example, a round trip domestic US airline ticket is typically 25,000 miles on most airlines. This is irrespective of the actual cost of the ticket in the market. Or a hotel night for a certain category of hotel is fixed too. For example, 35,000 points for a mid-level hotel, per night. This makes the value of a Venture Card redemption dependent upon the actual cost of the travel event. If an airline ticket or a hotel stay is really cheap, it is really better to redeem Venture Card points. Else, redeem airline miles or hotel points. A $80 hotel stay is only 8,000 Venture Card points, but may still cost 20,000 Hilton Points for the same night.

I recently took a trip to Los Angeles. It involved Airline tickets, hotel stay and a car. When I did the math, here is how I redeemed.

For the flight, the ticket was $945! I redeemed Airline Miles in a jiffy. I got saver award on the way out and a full reward on the way back. Cost – 37,500 United Miles. Beat 94,500 Venture Card points hands down.

For the Hotel stay, it was 35,000 Hilton Points per night. Hotel room was $120 per night. I redeemed 24,000 Venture Card points over 70,000 Hilton Points.

For the Car rental, it was $85 for two days. 8,500 Venture Card points was a no brainer.

Now, some Airline Mile programs to allow redeeming Airline Miles for Hotels and Car rentals. I have redeemed United Miles for a Hotel stay in the past. But these require booking thru their travel agency and it is not always the best deal. It should however be included in your calculus when deciding which reward to redeem.

The other redeeming factor (pun intended) for the Venture Card is that it has no blackout dates or quota limits on redemptions. If the flight has an available seat or the hotel has a room available, you can book and redeem. Airline Miles and Hotel Point programs always have restrictions.

My recommendation, the Venture card is a good one to keep in your wallet. But it should not be the only card. Do the math and get the best deal on your redemptions.

To get all our posts and articles, sign up for updates vis RSS or email. We also post updates on Twitter and Facebook on Airline Miles, the Airline Industry and other travel related stuff.