Yesterday, we stumbled upon an article on MarketWatch about Capital One’s move to make points worth less when redeeming for gift cards. Admittedly, we laughed at this a little because, seriously, why would someone use Capital One miles for gift cards instead of travel? Okay, okay, we know there are reasons.
We, of course, understand the frustration of no-notice changes. We just saw a big unannounced change from United and it seems we see one from Delta every few months. In this case, it seems Capital One did not announce to all cardholders that the redemption rate would drop from 1,000 miles for a $10 gift card to 1,250 miles for the same gift card. According to MarketWatch, only those who had recently cashed out their miles in this way received a notification.
With all this in mind, yes, not being notified sucks. Even if you weren’t redeeming for gift cards — good on you — it’s still nice to get a heads up. However, we wanted to take a look at whether Capital One is really just removing value from its program and maybe help MarketWatch understand how to use points a bit better.
What Cards Are We Talking About?
Not all Capital One cards earn miles so let’s take a look at what we’re talking about here. There are four cards MarketWatch referenced. Two that earn 2X points per dollar on all purchases and have $95 annual fees (waived the first year):
- Venture from Capital One (Learn More)
- Spark Miles from Capital One (Learn More)
And, two no annual fee cards with reduced earn rates:
- VentureOne from Capital One (Learn More) — earns 1.25X on all purchases
- Spark Miles Select from Capital One(Learn More) — earns 1.5X on all purchases
Before we dive into everything, let’s just start with an exasperated plea for everyone to pause on the redeeming of Capital One miles for gift cards before you hurt yourselves. Okay, thanks.
Capital One Transfer Partners Provide Serious Value
Late last year, Capital One moved from having fixed-value miles that were worth 1 cent each when redeemed for travel purchases to also having transfer partners. This means you can now transfer your Capital One miles to any of 14 airline partners to book award tickets with miles. Here’s a complete list of these partners with their respective transfer ratios.
|Transfer Partner||Transfer Ratio|
|Aeromexico Club Premier||2:1.5 (1,000:750)|
|Air Canada Aeroplan||2:1.5 (1,000:750)|
|Air France-KLM Flying Blue||2:1.5 (1,000:750)|
|Alitalia MilleMiglia Program||2:1.5 (1,000:750)|
|Avianca LifeMiles||2:1.5 (1,000:750)|
|Cathay Pacific Asia Miles||2:1.5 (1,000:750)|
|Emirates Skywards||2:1 (1,000:500)|
|Etihad Guest||2:1.5 (1,000:750)|
|EVA Air Infinity MileageLands||2:1.5 (1,000:750)|
|Finnair Plus||2:1.5 (1,000:750)|
|Hainan Airlines Fortune Wings Club||2:1.5 (1,000:750)|
|Qantas Frequent Flyer||2:1.5 (1,000:750)|
|Qatar Privilege Club||2:1.5 (1,000:750)|
|Singapore Airlines KrisFlyer||2:1 (1,000:500)|
Of course, everyone loves a nice gift card — do they, though? — but you can get much more value out of your Capital One miles by transferring them to an airline partner. Just to give you some context, here are a few examples of what you could book via these transfer partners.
With 55,000 Aeroplan miles (74,000 Capital One miles), you can book a one-way business class ticket from the US to western Europe. For 75,000 EVA Infinity MileageLands miles (100,000 Capital One miles), you can book a one-way business class ticket to North Asia on EVA Air.
Or, how about a fun sweet spot that is so often forgotten. You can book a one-way business class flight from the east coast to Tel Aviv on El Al for 78,000 Qantas points (104,000 Capital One miles). Not a bad way to get to the Middle East!
Check out some of the amazing ways you can use Capital One miles for some more inspiration.
The addition of transfer took these Capital One cards from solid purchase eraser cards to great cards that can help you travel the world. By using your Capital One miles for flights rather than gift cards, you’re able to get some insane value.
Use Points For Travel, Not Gift Cards
This gets us to our main point. Capital One miles are meant to be used for travel. This could mean paying for a boutique hotel stay with your Capital One card so you can erase the purchase with points at a rate of 1 cent per point. It could also mean transferring to an airline partner to book an award ticket for an amazing flight across the world.
For those of us who are obsessed with travel, this isn’t news but for those a little less familiar with the options sitting in their hands, we beg you: Please stop redeeming your Capital One miles for gift cards. In fact, this goes for Amex Membership Rewards points, Chase Ultimate Rewards points and Citi ThankYou Points as well. These are travel rewards programs — use the points to travel and thank us later.
Don’t Want To Travel? Use A Cashback Card
Since you’re here, you probably get that travel is what we do. It’s hard for us to imagine not wanting to travel. However, we certainly understand that circumstances in life can prevent it. Most of us have probably had times when it just isn’t feasible.
If that’s the case — and this is where we agree with the MarketWatch writer, cashback cards the way to go. Rather than be restricted to gift card brands or wonder how many points are required for a gift card, just earn straight cash.
In fact, Capital One has a few cash back cards (Learn More). Seriously, why are you using a travel rewards card if all you want is to use the rebate for stuff? Gift cards only limit your options. if this is your goal, keep it simple. Rather than play the gift card game, just figure out which cash back card or combo of cards is best for you.
Cashback Bonus Categories
For those who regularly eat at restaurants, you can get 4% cash back on these purchases with the Capital One Savor Cash Rewards Credit Card (Learn More) — $95 annual fee (waived the first year). there’s also a no annual fee version with reduced earn rates.
For those who could use a bigger return on their spend at US supermarkets, why not get 6% on up to $6,000 per year with the Blue Cash Preferred Card from American Express (Learn More) — it also offers 3% on purchases at US gas stations. The $95 annual fee is waived the first year. There’s also a no annual fee version with reduced earn rates.
2% Cashback On Everything
If you don’t want to mess with bonus categories or want a card to use when a purchase doesn’t fall under a bonus category, you can get a simple 2% cash back card like the no annual fee Citi Double Cash Card (Learn More).
If you’d like to venture into the credit union world, you could check out the Alliant Signature Visa (Learn More). It earns 3% during your first year with the card and 2.5% after that and comes with a $99 annual fee that’s waived the first year.
Look, we get it. It can be hard to keep up with all the changes in the credit card and travel worlds. But, if you’re redeeming miles and points from travel rewards credit cards, you’re quite simply doing it wrong. There are plenty of cash back cards that will get you better value.
However, if you want to travel, the cards that earn transferable points (i.e. Capital One Venture), airline miles or hotel points are going to be your best friends. Don’t waste your hard earned points and miles on a gift card. Even if it saves you a $100 in the moment, those miles/points could help you save thousands on a trip in the near future.