Airline credit cards, along with hotel credit cards, are great if you're saving up rewards for a specific travel redemption, or if you're loyal to a specific brand. Many of these cards offer great travel benefits that can improve your travel experience, such as a free checked bag and priority boarding with a specific airline, or complimentary elite status with a hotel loyalty program.
If you're not loyal to a specific hotel or airline brand, though, you may not get enough value out of airline or hotel cards to justify their annual fees. A better choice could be the Capital One Venture card, which offers you lots of different options for using your rewards. Here are five reasons to consider it over a co-branded card from the likes of Delta or Hyatt.
Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
Redeeming points doesn't always make sense
Redeeming airline miles or hotel points doesn't always make sense, especially when travel is cheap. If you're getting less than 2 cents per point in value out of your award redemptions, you're better off with the Capital One Venture card. Why 2 cents? Because the Venture Card earns 2 miles per dollar spent, which is equivalent to 2 cents toward travel.
For example, if there's a great airfare sale that drops round-trip flight to Asia to $350, redeeming 35,000 Venture miles is preferable to redeeming 65,000 American miles. That's especially true if you earn most of your miles via credit card spending. Charging $65,000 on a Citi®/ AAdvantage® Platinum Select ® World Elite™ Mastercard® would get you 65,000 AAdvantage miles. Charging the same amount to the Capital One Venture card would get you $1,300 worth of travel rewards.
You don't need the "works"
Some travel rewards cards are loaded with perks, with high annual fees - as high as $595 - to match. Benefits on premium credit cards include elite-qualifying credits, airport lounge memberships, and annual statement credits. All of these can come in handy and help enhance your travel experience.
However, if you don't make use of these perks, you could be wasting money on high annual fees. If that's the case, you're better off with the Venture Rewards card. The card has a $95 annual fee, which is waived the first year. It's a much more economical alternative for those who don't make use of premium travel benefits but want to earn a flexible rewards currency at rate of over 1 mile per dollar spent.
Flexible redemptions
Speaking of redemptions, the Capital One Venture card allows you to redeem rewards for any travel purchase. Simply charge your flights and hotels to the card and use miles to cover the cost via the Purchase Eraser tool. It doesn't get easier than that.
With airlines eliminating award charts in favor of dynamic pricing and hotel loyalty programs implementing peak and off-peak award charts, redeeming traditional rewards is becoming more difficult. Award space and redemption rates are becoming less predictable. That's why a card that earns the equivalent of 2% cash back, like the Capital One Venture, can make earning and redeeming miles easier.
Venture miles aren't just good toward travel statement credits; you can also transfer them to 15 airline transfer partners. Granted, the transfer ratio is just 2:1.5 for most partners and 2:1 for Emirates and JetBlue. However, this provides yet another transfer option in case you ever need to top off your frequent flyer balances.
Global Entry or TSA PreCheck credit
Plenty of cards offer up to a $100 statement credit to cover the cost of Global Entry or TSA PreCheck. Many of these cards have annual fees of $450 or more. That's another feature that makes the Capital One Venture card unique. Its annual fee is just $95 and cardholders qualify for an application fee credit every four years.
Valuable protections
With some credit card issuers gradually stripping away valuable purchase and travel protections, the Capital One Venture card has an advantage. Capital One Venture cardholders receive travel accident insurance, auto rental collision damage waiver, roadside assistance, and extended warranty.
The auto rental collision damage waiver can be very valuable when used abroad, since it provides primary coverage. Simply decline the additional coverage offered by the rental car company to take advantage of your card's benefit. You'll save money and have peace of mind in case of a collision.
Stateside, auto collision coverage is secondary. That means if you're involved in an accident, your card's insurance doesn't kick in unless your primary insurance company rejects your claim. Either way, this benefit can be incredible valuable, especially for a card that doesn't carry a hefty annual fee.
Bottom line
Airline credit cards have lots of great features, but they aren't for everyone. If you want flexible rewards, valuable travel protections and a few perks at a lower annual cost, the Capital One Venture card might be a better fit for you.
The card currently offers a pretty competitive welcome bonus of 50,000 miles after you spend $3,000 within the first three months. This can be used toward $500 in travel credits or transferred to one of Capital One's airline partners at a slightly less favorable ratio.
Regardless of your travel preferences, there are times when redeeming airline miles or hotel points doesn't make sense. During those times, the Capital One Venture card can come to the rescue.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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