One of the most common questions I’m asked about travel credit cards is which card I think is the ‘best’. In order to begin to answer the question, you first need to learn to differentiate between fixed value credit cards and programs where we earn miles or points with a specific program.
I’ll show you a screenshot from the Capital One Venture Rewards page to help illustrate this point.
Here they are claiming that a person who spends $1,250 per month will earn 30,000 Capital One “miles” while a person using the Chase Sapphire Preferred will “only” earn 19,742 Ultimate Rewards points.
Ultimately, the question is not who is earning more ‘miles’ but which program is more valuable. Perhaps our analysis will help us answer that question.
Fixed Value Credit Card Points
Fixed value credit card points can never be worth more than the assigned value of each point.
Using the Capital One Venture Rewards program, each ‘mile’ is worth 1 penny each. No matter how smart, slick, savvy, or aware you are, you won’t be able to get more than a penny value per point.
The consumer appeal to fixed value programs is that they have no black out dates or seat restrictions. However, the cost of award redemptions naturally follow the market. For example, when traveling over Christmas tickets might be $500, but only $250 in October. The cost of a ticket in October may be 25,000 points, while the cost of a ticket in December is 50,000 points.
Best Fixed Value Credit Cards:
40,000 points sign up bonus after spending $1,000 in the first 3 months. Those 40,000 points are worth $440 when redeemed for travel! You’ll earn 2 points per dollar you spend (equivalent to 2% cash back) and you get a bonus 10% cash back when you redeem your points for travel (equal to 2.2% cash back). This card has both the biggest sign up bonus for a fixed value card, and it also has the best earning rates if you use the points for travel.
The annual fee for this card is $89, but you get the first year free.
New card members can get 10,000 miles when they spend $1,000 in the first month. That’s a $100 value towards travel. Every purchase with your Venture Rewards card earns 2 points (2% cash back equivalent).
This card has two benefits over the Barclay Arrival card. First, the annual fee is only $59 (free for the first year). Second, there is no foreign currency transaction fee with this card. Still, Barclay Arrival is tops in my book.
3. Citi ThankYou Rewards Cards
This card offers 30,000 bonus ThankYou Points after qualifying purchases. Your 30,000 points are worth $300. you only earn 2x Points on purchases for dining and entertainment and 1 point per dollar spent on everything else.
Earn 35,000 bonus points after spending $2,000 in the first three months. When redeeming your points for air travel, you can earn 33% more value per point. Points redeemed for air travel are worth 1.33 cents each. Still, with the lower earning rate of one point per dollar, it’s hard for this card to compete.
Mileage or Points Based Credit Cards
Mileage or points based credit cards allow you to earn or transfer points into an airline, hotel, or train rewards program. Most of these programs are not fixed value. In other words, the number of miles they charge is determined by an awards chart instead of the cost of a ticket.
Here are a few examples to illustrate:
- Flying from Los Angeles to Honolulu, Hawaii in September costs $504 per person in economy class. Using a fixed value program you’d expect to spend about 50,400 points. However, with British Airways Avios those same tickets cost only 25,000 Avios + $5.
- New York to Sydney, Australia in September costs about $1,527 per person in economy class. Using a fixed value program, you’d expect to spend about 151,270 points. However, American Airlines only charges 75,000 AAdvantage miles round trip.
- A weekday night at the Park Hyatt Paris-Vendome costs around $1,000 USD. Using a fixed value program you’d pay 100,000 points. That same room can be booked with 22,000 Hyatt points (transferable from Ultimate Rewards).
With an airline based mileage program or hotel program you can 2, 3, 4 5+ cents value per point.
What’s My Preference? The Best of Both Worlds
Why choose when you don’t have to? Right now I’ve been focusing on collecting Ultimate Rewards.
You can use them as fixed value points at 1.25 cents per point value each. However, you can also transfer them to airlines like United, British Airways, and Southwest (and more). You can also transfer them to hotels like Hyatt (and more). We even used our points to take an Amtrak train ride.
The best Ultimate Rewards earning credit cards are the Chase Sapphire Preferred and the Ink Bold or Plus. You can check out these cards or other top travel credit cards on this page.
There are only three situations I prefer using fixed value points.
- Car rental – I don’t like to rent cars using points because of the insurance complication. However, if I can use a refundable points program where I pay and then request a refund of the dollar value (like Barclay Arrival and Capital One cards), then I like using fixed value points.
- Hotwire/Priceline hotels. In some markets it’s hard to beat a Hotwire or Priceline hotel cost. In those cases, I’d rather use refundable fixed value points.
- When that’s the best value for a plane ticket. Earlier this year, my wife was flying to Houston and flights were only about $160 roundtrip. Using Citi Premier points, we booked the flights for about 12,000 points each (compared to 25,000 miles an airline program would have charged).
However, for the most part, I like miles better because you can get a lot more value out of each point. The perfect example was probably last year when we were able to add a free trip to Hawaii onto two existing international tickets. That’s the type of thing you can never do with fixed value points. I’m actually such a geek with this type of thing that I’ll specifically plan to go somewhere because I know that I can get a great point per mile value. That’s not something most people would want to or be willing to do.
As such, given the chance to have 30,000 Capital One “miles” or 19,742 Ultimate Rewards points, I’d gladly take Ultimate Rewards points.
To be fair, when I’m talking with someone who is a complete newbie (never applied for a rewards credit card), I often suggest a fixed value card. Lately it’s been the Barclay Arrival because it gives them a good first experience with credit card rewards, and as they understand how programs work, they’ll be better prepared for mileage based credit cards.
What type of points do you prefer to use?