A number of airline credit cards pay out in travel miles/points, but most are restricted to their branded airline or hotel. The Starwood Preferred from American Express, for example, pays out in StarPoints, which are lovely if you’re a frequent Starwood guest but otherwise lose their sparkle. But the end goal of the card is to defray travel expenses, so why bother with annual fees and high APRs if your credit card miles force you to go with a more expensive airline or hotel? Making the best use of deal sites like Travelocity, Orbitz and Expedia means flying on a variety of airlines to snag the cheapest tickets. Ideally, an airline mile credit card keeps pace and allows you to redeem on different airlines without penalty.
Capital One Venture Rewards
The Capital One Venture Rewards also shares the highest-rewards-rate crown with a 2% base rate, and pays out in No Hassle Miles, which are as flexible as a double-jointed yoga instructor. There are two versions of the card: the Capital One VentureOne, which gives 1.25% rewards but has no annual fee, and the Capital One Venture Rewards, which gives an ongoing 2% rewards rate and has a $59 annual fee, though it’s waived the first year. In general, unless you’re a very low spender and/or you’re holding the card for quite some time, we suggest the CapOne Venture over the VentureOne.
Rewards: Like the Discover Escape, the CapOne Venture Rewards gives 2 No Hassle miles per dollar spent on all purchases. You can, technically, redeem the miles for gift cards, but our analysis of the Capital One No Hassle Miles program values a point redeemed for gift cards at around half of one that’s redeemed for travel expenses. Just like Discover Miles, you can redeem No Hassle Miles to offset any travel expense.
What makes it special: In addition to redeeming miles for travel, Capital One lets you to trade in No Hassle Miles for gift certificates at a rate of 100 miles to the dollar. It allows you to redeem in increments as low as 1,000 miles, and maintains the same redemption ratio throughout. This means that you can get a $10 Amazon gift certificate for 1,000 miles or a $250 credit to the Ritz-Carlton for 25,000 miles, and you’ll still be earning 2% back. Few other credit card miles have this option.
Signup bonus: The card has a signup bonus of 10,000 Capital One No Hassle Miles when you spend $1,000 in the first 90 days.
Verdict: With the acceptance of Visa, the waived F/X fee and the joys of seeing Vikings and Alec Baldwin in commercials, the Venture is tough to beat.
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Discover Escape
The Discover Escape is, in addition to being one of the best rewards credit cards around, a jack-of-all-trades that’s in a three-way tie for highest rewards rate, with a low ongoing interest rate and a 0% intro APR promotion to boot. Its travel rewards program, Discover Miles, is among the most flexible of travel redemptions, and it eliminates the hassle of having to sign up for rewards programs every 3 months. It does have a $60 annual fee, but that’s more than cancelled out by the prorated signup bonus.
Rewards: Its base rewards rate is 2 miles per dollar on all purchases, and it pays out in the flexible Discover Miles. The miles can be redeemed at 200 to the dollar for cash (for example, you can trade 10,000 miles for $50 in cash) or 100 to the dollar to offset travel expenses (trade 10,000 miles for a $100 travel credit). It can be used on pretty much any travel expense: airfare, hotel stays, rental cars, the works.
What makes it special: Most credit card miles can only be redeemed for tickets or hotel stays. This introduces two problems: you can’t combine airline and credit card miles, and miles can only be used for the airfare, not additional charges. So, for example, you can’t use 20,000 American Airlines miles and 5,000 Capital One No Hassle Miles to get a 25,000-mile ticket. You’d have to save up 25k No Hassle Miles, and even then, you’re on your own for taxes and fees, which can run well into the triple digits.
A Discover Mile, on the other hand, is like a extremely portable half-dollar coin. You can book travel any way you’d like, and as long as you pay with the Discover Escape, you can redeem 10,000 miles for a $100 travel credit to offset your expenses. Combine with airline miles, fly on Memorial Day, book on Orbitz, and pay all the fuel surcharges you like – Discover will pick up the tab.
Signup bonus: The card has a signup bonus of 25,000 Discover Miles 1,000 extra miles a month for first 25 months..
0% intro APR: If you’re carrying a balance on an existing credit card, or plan to make a big purchase you’d like to pay off over time, the Discover Escape will allow you to do so without interest and while earning rewards. The card has 0% interest on purchases and balance transfers for the first 6 months.
Verdict: The card is still hampered by the lack of acceptance. Though Discover is expanding into Europe and a few other areas, they still don’t command the acceptance of Visa and MasterCard. (See where they’re accepted here).
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