Saturday, April 18, 2009

Capital One Updates

We’re still not huge Capital One fans, yet we get more inquiries about their credit cards than any other topic on this blog. So we thought it was time to re-survey their offerings and post an update.

As we’ve said before, we think their reward schemes are generally unimpressive (not bad, just not great). But they are also one of a very few cards that do not add foreign-exchange fees, making them a top choice for international travel. For most purposes, that’s the only time we use our Capital One cards.

Capital One’s website lists 28 different cards (yes, 28) and most seem like pretty much their old standards, but two new (to us) cards caught our eye.

  • The latest version of the No Hassle Miles Rewards card offers 2 “miles” per dollar after $1,000 a month in spending, with one mile otherwise. (Capital One “miles” aren’t real airline miles that you can transfer into an airline account. They’re simply points you can redeem for statement credit for ticket purchases.)
  • The Orbitz Visa Signature offers Capital One’s usual 1 point per dollar, except it gives you 3 points/dollar for purchases from Orbitz. In general, 1 Capital One point translates to a 1% rebate/travel credit. So if you use Orbitz a lot, this would be equivalent to a 3% return – pretty good in today’s reward environment.

Many frequent-flyer commentators value traditional airline miles at about 1.5 cents each. With real airline miles, you need to make sure you maximize your miles (ie: don’t burn 25,000 miles for a $200 ticket), or you could end up having less value than Capital One’s 1%. We, however, feel we use our airline miles at about 2 cents each, so with other types of reward cards for cash or points, we look for a 2% or better return.

We’ve discussed points/miles/reward cards frequently. Browse through our archives on the topic, and you’ll also see some suggestions for cards for international travel.