Capital One Venture Card: The King of 2% Rewards Cards

The benefits of the Venture Rewards:

• The Capital One® VentureSM Rewards Credit Card is the only Visa card that earns you the equivalent of 2% or more in rewards on all purchases, from the first dollar you spend to the last. The other two are Discover and AmEx cards, which don’t have the same rate of acceptance as Visa and MasterCard do.
• There are no minimum spending requirements and no caps on rewards. The Sam’s Club Discover card eventually earns 2% rewards on all purchases, but you need to spend upwards of $10k before you get there. Similarly, other cards like the Citi Dividend cap rewards at a certain amount per year.
• The Venture is the only 2% rewards credit card that also has no foreign transaction fee.This is a charge levied on all transactions made overseas, and usually runs about 3%. If you spend, say, $2,000 abroad in a year, you’ve just saved $60, and wiped out the annual fee based on the F/X savings alone.
• No Hassle Miles are among the easiest to redeem for 1 cent per 1 mile. Miles show up electronically in your account soon after you make a purchase (no need to wait until the end of the month). You can then redeem them as a credit against travel expenses, whether that’s plane tickets, hotel rooms, gas or rental cars. Capital One is even nice enough to make suggestions as to which statement travel expenses you can offset with your miles. This makes it unlikely that you will end up with un-usuable miles. To top if off, you can redeem odd lots, as long as you redeem more than 15,000 Miles – for example, you can redeem 16,450 miles to offset a $164.50 plane ticket. Other cards don’t always have the same ease of redemption.
• You can also redeem miles for more expenses than most other travel cards. If you have, say, an airline credit card and trade 15,000 miles for a domestic ticket, you’re still on your own for taxes and fees. Others will require you to fly certain airlines on certain dates, or avoid booking through discount sites like Hotels.com or Kayak. NHM have no blackout dates.
• No Hassle Miles also never expire, as long as your account is active.
• Based off of our internal card approval data, we believe the Venture Rewards is easier to qualify for than other 2% cards.
• Venture is the only 2% card that has a concierge service.

Capital One® Venture℠ Rewards Credit Card
	Money(R) Magazine's "Most Rewarding Card if you crave free airline flights" 2 miles per dollar on every purchase, every day Earn 10,000 bonus miles, equal to $100 in travel Redeem your miles for any travel expense No limit on the miles you can earn and miles won't expire Fly free on any airline, any time with no blackout dates No foreign transaction fees $0 intro annual fee for the first year; $59 after that
Annual Fee Signing Promo APR, variable* Intro APR Promotions $0 intro for first year; $59 after that 10,000 Capital One No Hassle Miles Bonus after spending $1,000 - in the first 90 days Min APR: 13.9%(V) Max APR: 20.9%(V) Default APR: 29.4%(V) Cash Adv: 24.9%(V) Purchase: None Bal Trans: None

While we believe the Venture Rewards card is an excellent all-around card, we should also do our due diligence and take a look at the other 2%+ rewards credit cards out there.

The Competition:

The Fidelity American Express comes in three forms: the 529, Retirement Account, and Investment Account. It earns a straight-up 2% on all purchases, which is deposited back into your Fidelity account. The main advantage over the Venture is that it has no annual fee, making it a great choice for lower spenders who don’t travel often and therefore won’t get value out of statement credits against travel expenses or a waived F/X fee. The main disadvantages are that you need a Fidelity account and that, as an American Express, it isn’t accepted everywhere.

The Discover Escape earns 2 Discover Miles per $1 spent at a flat rate. It has a 25k-mile signup bonus (1,000 miles a month for 25 months) but doesn’t waive the $60 annual fee in the first year. This really doesn’t measure up to the Venture, since Discover has a poor acceptance rate, the card’s bonus is spread out over two years, and you pay extra both for the first-year fee and for foreign transaction fees.

The Starwood American Express earns 1 Starpoint per $1 and up to 5 Starpoints when you spend on Starwood Preferred Guest hotels. We value Starpoints to be worth, on average, 2.3 cents apiece (though they range in value from 1 cent to a whopping 5 cents), so the effective rewards rate is 2.3% on all purchases and up to 11.5% at SPG hotels. The annual fee of $65 is waived the first year. The rewards rate is clearly better than the Venture’s, but you get full value only if you redeem for Starwood hotel stays. If you don’t stay often, you’re out of luck. Plus, it charges a foreign transaction fee. It’s an American Express, so you run into the same coverage problems as the Fidelity credit card.

Fidelity AmEx vs. Venture. Winner: Venture

The Fidelity AmEx’s main advantage is that it has no annual fee. When you balance these two factors out, purely mathematically, the Capital One card is better if you hold the card less than 3 years, and is worse if you hold it for longer.

However, the American Express card poses some other disadvantages. First of all, you need a Fidelity Retirement, 529 College Savings, brokerage, or checking account in order to qualify for the card. Second of all, American Express is only accepted at about 5 million merchants in the United States, while Visa is accepted at roughly 9 million merchants. As we mentioned already, the Capital One card also comes with the advantage of having a concierge service, which AmEx does not, and no foreign transaction fee, compared to a 1% fee with the American Express. Other fringe benefits are roughly equal between the two, such as rental car insurance, warranty extension and purchase protection.

	Capital One® VentureSM Rewards Credit Card	Fidelity AmEx	Winner
Annual Fee	$59, waived first year	$0	Fidelity
Sign Up Bonus	None	None	Tie
Ongoing Rewards	2 No Hassle Miles per $1 spent	2% back into your Fidelity account	Tie
Ease of Rewards Redemption	You can redeem miles against statement travel expenses, at pretty much any time and any amount above 15k.	2% goes into your Fidelity account. Getting the money out might be tricky.	Tie
Foreign Transaction Fee	None	1%	Venture
Acceptance	Visa	American Express	Venture
Concierge	Yes	No	Venture
Fringe Benefits	Rental car insurance, extended warranty, purchase and return protection		Tie

Discover Escape vs Venture. Winner: Venture by a mile

The Discover Escape is very similar to the Venture, and the rewards program works exactly the same way. The Discover fringe benefits are also pretty shoddy. American Express really blazed the path here, and arguably has the best fringe benefits out of any credit card network. Discover inarguably has the worst. In terms of credit card rental insurance, Discover offers paltry coverage compared to the other three networks, a trend that generally pervades the fringe benefits. And let’s not forget it’s a Discover card, not a Visa, so you may run into acceptance issues.

And because the Venture waives the annual fee in the first year while the Escape doesn’t, you’re losing out on an extra $60 plus any foreign transaction fees you incur.

	Capital One® VentureSM Rewards Credit Card	Discover Escape	Winner
Annual Fee	$59, waived first year	$60	Venture
Sign Up Bonus	None	1,000 Discover Miles per month, for the first 25 months ($250)	Escape
Ongoing Rewards	2 No Hassle Miles per $1 spent	2 Discover Miles per $1 spent	Tie
Ease of Rewards Redemption	You can redeem miles against statement travel expenses, at pretty much any time and any amount above 15k.	You can redeem miles against statement travel expenses, at a rate of 1 cent per mile.	Tie
Foreign Transaction Fee	None	2%	Venture
Acceptance	Visa	Discover	Venture
Concierge	Yes	No	Venture
Fringe Benefits	Rental car insurance, extended warranty, purchase and return protection	Poorer rental car insurance	Venture

Starwood AmEx vs Venture. Winner: Depends

The Starwood American Express is potentially the best rewards card, so long as you frequent Starwood hotels such as the W, Sheraton, Four Points, Westin, and the St. Regis. However, the points lose their abnormally high value if you don’t redeem them for hotel nights, because the only 2+ cent redemption options are hotels. When you exchange Starpoints for airline miles, the best you can expect is 1.25 cents per 1 Starpoint, because you can exchange 20,000 Starpoints for 25,000 miles on many domestic airlines. You can also redeem Starpoints for hotel points at many chains, again generally at a lower value than you’d get if you redeem for Starwood. The rewards rate of 2.3% holds if you frequent SPG hotels.

However, we’d much rather have the convenience of being able to use No Hassle Miles to buy the cheapest possible tickets or hotel rooms, and not worry about having to redeem Starpoints at expensive hotels just to get our money’s worth. There is also quite a large difference between a 2.7% foreign transaction fee with the Starwood card, versus a 0% foreign transaction fee with the Venture Rewards. This equals $100 in savings for every $3,704 you spend overseas (and you’ll spend that much in no time if you’re staying at Starwood hotels)!

Finally, the Starwood card has a slightly higher annual fee than Venture, though $6 per year isn’t really much of a consideration relative to the other factors. To conclude, yes, Starwood has a mathematically higher rewards rate, at 2.3% rather than 2% if you redeem for the Starpoints’ average value. But No Hassle Miles are a heck of a lot easier to redeem. Therefore, we’d much rather take our 2% that we can use on any travel expense, and in odd denominations, rather than rack up points that are worth 2.3 cents each, but are difficult to use. Your personal favorite, though, will depend on how often you stay at Starwood.

	Capital One® VentureSM Rewards Credit Card	Starwood AmEx	Winner
Annual Fee	$59, waived first year	$65, waived first year	Venture
Sign Up Bonus	None	10,000 Starpoints upfront and another 15,000 after you spend $15,000 in the first 6 months	Starwood
Ongoing Rewards	2 No Hassle Miles per $1 spent	1 Starpoint per $1 spent. We estimate Starpoints are worth 2.3 cents each.	Starwood
Ease of Rewards Redemption	You can redeem miles against statement travel expenses, at pretty much any time and any amount above 15k.	If you want full value, you need to redeem for Starwood hotel stays.	Venture
Foreign Transaction Fee	None	2.7%	Venture
Acceptance	Visa	American Express	Venture
Concierge	Yes	No	Venture
Fringe Benefits	Rental car insurance, extended warranty, purchase and return protection		Tie

Other Heavy-Hitting Rewards Cards vs Venture. Winner: ??

There are numerous “5%” specialist cards to consider, none of which have an annual fee. If you spend enough in these 5% categories, you might actually end up earning more than 2% overall with these cards. Of course, you can get crazy and match up a few of these cards for use in several different bonus categories, along with a 2% card for other purchases, to earn way in excess of 2%.

First, if you eat out every day, and buy a lot of stuff from Amazon, the Citi Forward card can earn you 5% on dining, movies, and books (Citi counts Amazon.com as a bookstore). The caveat is that Citi ThankYou points are annoying to redeem. You have to hoard 10,000 of them before you can get a $100 gift certificate to stores like Bloomingdale’s or Walmart, while you can redeem No Hassle Miles starting at only 15k and still get full value. Also beware that point earnings are capped at 75,000 per year.

Second, the somewhat obscure and very-difficult-to-qualify-for Pentagon Federal Platinum CashBack card earns 5% on gas stations, and 1% elsewhere. You’ll also need to join the PenFed Credit Union, either by being a member of the DoD/military or donating to the Red Cross, Voices for America’s Troops or the National Military Family Association. But no other card offers 5% rewards on gas, with no strings attached. Note that neither card offers a concierge service, or a 0% foreign transaction fee.

The best way to maximize your rewards: mix and match

I personally combine the Citi Forward (which I use when I go out to eat or shop at Amazon) with the CapOne Venture. I was lured by the signup bonus (which the Fidelity AmEx doesn’t have) and the ability to earn 2% rewards on all purchases without worrying about rewards caps like the Citi Forward’s. This total package has an annual fee of $59, and effectively earns me over 3% each year. But f I had to pick just one card to use every day, it’s got to be the Capital One® VentureSM Rewards Credit Card, just due to acceptance and the high base rewards rate.