Capital One VentureOne vs Venture Rewards: Would you Pay the Annual Fee?
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The Capital One® VentureOne® Rewards Credit Card and the Capital One® Venture® Rewards Credit Card have one obvious difference: the former has a $59 annual fee (waived the first year), while the other has no fee. Annual fees are a hot-button topic. Many people refuse to pay an annual fee on a credit card, and laugh at the idea of carrying a card that isn’t free. But rejecting those cards out of hand means you might be missing out on a higher rewards rate, better signup bonus or both. Banks know that annual fees trigger a visceral response, and that people feel an aversion to annual fee cards even though they might be worse off if they don’t pay a fee. We’ll take the emotion out of it and do an in-depth drilldown on the Capital One Venture Rewards (fee + better rate) and the Capital One VentureOne (no fee + worse rate).
Capital One has given us a great testing ground to show exactly what an annual fee can get you, with the fee-toting Venture Rewards card and the fee-less VentureOne. They both earn No Hassle Miles and differ only in the signup bonus, annual fee and ongoing rewards rate. Those are, however, pretty significant differences. While a consumer who is adamantly against fees will tend to opt for the VentureOne, Capital One’s been upping its signup bonus on the Venture Rewards to the point that it’s rarely a good decision to get the plain ol’ VentureOne. First, let’s walk you through the differences:
So when you weigh the Rewards versus the One, you’re comparing the higher rewards rate (+0.75%) against the annual fee (-$59 after the first year). The right choice will depend on 1) how long you hold the card and 2) how much you spend.
Why the Venture Rewards usually wins out
The Rewards has an annual fee, but earns at 2% instead of 1.25%. However, the higher rewards rate usually covers the difference in itself. To calculate the value, we took the difference in rewards rate and subtracted it from the disadvantage (the fee). The table below shows your average yearly savings with the Venture Rewards as opposed to the VentureOne, given different lengths of time and spending habits:
How much better is the Venture than the VentureOne, in terms of rewards minus annual fees?
Here’s how much you’d save with the Venture Rewards, compared to the VentureOne.
|Dollars Spent per Year|
The tipping point is around $8,000 spent each year.
If you spend less than $8,000 a year: You’ll have to analyze your own spending habits to see if the annual fee’s worthwhile. The more you spend, the better the Venture Rewards looks, but as you hold the card longer and longer, the VentureOne becomes increasingly more attractive. Do the calculations for yourself:
Average savings per year = ([Signup bonus + 0.02 * spending * years held – $59*(years held – 1)] – [$100 + 0.0125 * spending * years held])/ years held
If you spend more than $8,000 a year: The Venture Rewards has your name written all over it. For those who spend $8k+ a year, the difference in the rewards rates cancels out the annual fee all by itself, irrespective of signup bonuses.
Plus, if you get the Venture Rewards, you can call in and ask them to drop the annual fee after the first year. We’ve heard a number of people claim it has worked for them, so it’s worth a shot!