Why You Should Never Get a Capital One Card

Capital One’s Venture Card — that “no hassles” credit card advertised on TV — will save you big on the road, right? Many people — even me — recommend this card but it is actually the WORST travel rewards credit card you can use. I get a lot of emails asking about this card, and I recently chastised two friends for using it as their primary credit card for gaining points and miles.

Wait, you just said you recommend it. How can it be that be bad, then?

Capital One gets a few things right: the simple rewards structure of their no-fee Venture Card is perfect for people who don’t spend much money or who don’t want to worry about points. They are selling simplicity and they do it well. I think if you’re a low-spending, low-traveling person, this card could be worth your time (see comments below where I tell people not to move to a different card).

But it’s not even close to being even a mediocre travel hacking rewards card. I think it’s probably the worst card for a travel hacker.

And it’s time I explain why so people won’t make the same mistakes my friends made!

While it is true you earn two points per dollar spent, not all points are equal. It’s not how many points you earn, but how you can redeem those points.

Let me explain why Capital One’s Venture Card is not good for those wanting to get the most bang for their travel hacking buck and actually get free flights and hotel rooms:

The card comes with a 40,000-point sign-up bonus after spending $3,000 USD in three months. That’s 46,000 points, worth $460 USD. I think the card is worth the sign-up bonus – I’ll take $460 USD any day, but what happens after that?

Let’s say you’re in your second year and plan to spend $100,000 USD on your card for 200,000 points, worth $2,000 USD. (NOTE: I use $100,000 since it’s a nice simple round number. I know most people won’t spend that much per year.)

For that much you can get a lot more.

For example, 100,000 American Airlines points when earning 1 mile per dollar spent (assuming no category bonuses like booking with the airline) could get you a round-trip seat in coach class to Europe twice, a first-class ticket to Europe, or a business-class ticket to Asia, which on JAL costs $6,900 USD:

In this scenario, your 100,000 AA miles are worth close to seven times the value of your Capital One points! To redeem that same flight with Capital One, you would need to have 690,000 points or spend $345,000 USD!

And here is another example. Let’s say you want to fly Emirates first-class from Los Angeles to Dubai:

That ticket costs $25,000 USD! Or, you could redeem 90,000 Alaska Air miles for the flight. But if you wanted to redeem Capital One points, you would need 2.5 million points!

“OK, but if I get an American Airlines, Starwood, or United card, I’m only getting one point per dollar. Capital One gives me two!”

That’s true, but if you spend $50,000 USD on your AA card, those 50,000 points can be redeemed for a one-way business-class flight to Japan worth thousands of dollars! If you spend the same on Capital One, it’s worth $1,000 USD. Capital One points have little value.

Additionally, there are cards that give great category bonuses, such as multiple points for travel, shopping, food, gas, and groceries, so it’s not always one for one. Capital One is always the same: two miles per dollar spent.

Moreover, many other credit cards come with perks that are also worth something, from free checked bags, priority boarding, lounge access, Internet at hotels, and much more. Capital One gives you nothing. Plus, there are dozens of other cards that offer no foreign transaction fees.

The redemption value of Capital One makes it a horrible card for a travel hacker to get.

Capital One is essentially a 2% cash-back card ($50,000 USD = 100,000 points = $1,000 USD = 2% of $50k USD) but there are much better cards. The Citi Double Cash Card gives you 2% cash back with no annual fee and rewards can be used for any purchase, not just travel. The American Express Blue Preferred gives you 6% cash back at supermarkets, 3% at gas stations and department stores, and 1% everywhere else, so when used heavily on groceries and shopping, you can earn more than 2% on average.

If you don’t want to be tied down to one airline, flexible point credit cards like the Chase Sapphire Preferred, Citi Premier, or American Express Gold card can offer much more value than Capital One.

The Capital One card is good for low-spending consumers, those who buy the absolute cheapest tickets, or as a way to wipe off non-airline or hotel charges from your monthly bill (though I like the Barclaycard Arrival Plus much better!). But if you even remotely care about earning points and miles for free travel for first class flights or having perks when you travel, this is NOT a card you should ever get.

Note: This posts refers to the Venture Card, which comes with a $59 USD annual fee. The VentureOne has no annual fee but only earns 1.25 miles per dollar spent, making it even worse! Definitely don’t get that one!