This is a guest post by Elbyron – A credit card rewards fanatic. I was in the process of writing about this new offering by Capital One when Elbyron contacted me with a detailed post on his thoughts. Although this card has an annual fee, it’s perhaps the only card in the market that I’m considering paying for and this is why…
Earlier this month, Capital One launched a new MasterCard that has generated a lot of media buzz as it’s a real contender for being the #1 travel reward credit card –The Aspire Travel World MasterCard .
The Aspire Travel World card is very similar to phased out Capital One’s Miles Plus card, as they both earn 2 reward miles for every $1, which works out to a 2% return in most cases. These miles can be redeemed for any flights, hotels, vacations, car rentals, or travel of any kind that you charge to your card (much like the TD Infinite card). You can also redeem for cash, in the form of a cheque or statement credit, which will get you a 1.5% return.
- Earn more reward miles – on everything you buy!
- Earn 2 reward miles for every $1 – on all purchases
- Get 35,000 bonus reward miles with your first purchase
- Get 10,000 anniversary bonus reward miles every year
- Redeem for travel, cash, merchandise and gift cards
- World MasterCard benefits, including Travel Emergency Medical Insurance and Trip Cancellation Insurance
- Add an authorized user for $0
Please Note: A requirement of this card is a minimum personal income of $60,000 or household income of $100,000.
- $120 annual fee is effectively offset by the anniversary bonus for a net annual cost of $20.
Best in Class Insurance Coverage
The Aspire Travel World MasterCard offers the most comprehensive insurance coverage in the premium credit card market. In addition to the usual Travel Accident Insurance ($500K) and car rental insurance, this card also offers insurance for:
- Travel Emergency Medical: For trips up to 22 days if younger than 65, or 8 days if over 65.
- Flight Delay: Flight delay is $250 per day up to $1000 per trip (includes you, your spouse and your dependent children).
- Trip Interruption: Trip interruption is max $25,000 per trip (includes you, your spouse and your dependent children).
- Trip Cancellation: Trip cancellation is max of $5,000 per trip (includes you, your spouse and your dependent children).
- Baggage Loss: $1000/trip.
- Baggage Delay: Baggage delay only up to 3 days (includes you, your spouse and your dependent children).
- Price Protection: Refunds up to $100/item if a lower price is found in 60 days. Max $500/year.
- Extended Warranty: Doubles manufacturer’s warranty for up to TWO additional years (typically 1 year with other cards).
- Purchase Assurance: Insures most purchases against theft, loss or damage for 120 days (typically 90 days with other cards).
Any flights, hotels, car rentals, train, bus, cruises, or vacation packages that you charge to the card can qualify for redemption. All taxes and fees on the travel charge are also eligible. Miles must be redeemed within 90 days of the charge, and you can do so online or over the phone.
You can book your travel with any website or travel agency, and with no seat restrictions or blackouts. The “No Hassle Rewards” do have one hassle though, and that is the redemption tiers:
- Travel charges up to $150 require 15,000 miles
- Between $151 and $350 require 35,000 miles
- Between $350 and $600 require 60,000 miles
- Over $600 is simply 100 points per dollar
These tiers may seem like a real drawback, but there is a simple workaround to ensure you always get 2% return: when charging the travel to your card, split the total cost into two charges, making one of them exactly $150 or $350.
Or if you have over 60,000 points but not enough for the full travel cost, then split it so that one of them equals 1/100 of the number of points you have. Most airlines and hotels will let you use multiple credit cards to pay with, so simply request this and give them the same card number for both parts.
The policies for the various trip insurances state that in order for the trip to qualify, the “full cost of the common carrier travel must be charged to your Capital One card”. But as long as both charges are put on your card, you should technically meet this requirement. However, I am currently trying to get confirmation from MasterCard about this.
There is also an option in the redemption process that lets you specify the “number of tickets in the transaction” and “number of tickets you want reimbursed”. What this does is divides the transaction price by the first number and multiplies by the second one, giving you the choice of any ratios with the denominator between 1 and 10.
For example, if my flight costs $450, I could say there are 9 tickets in my transaction and I want to redeem for 7 of them. So 450 * 7/9 = 350, which is what I want to be able to get the full 2% reward. It may not always work out perfectly, and calculating the optimal ratio requires some math skills, but it certainly helps.
Cash and Other Rewards
As an alternative to redeeming for travel, you can redeem for cash at a 1.5% return, with a minimum of 10,000 miles ($75) and in increments of 3,333 miles ($25). You can also redeem for gift cards, but the best one only gives you 1.4% return so the cash is still better. They also offer a tiny merchandise catalog, but the return is terrible, at approximately 0.5%.
The Capital One Aspire Travel World MasterCard requires a household income of $60k, and with a interest rate of 19.8% (as of June 15), this card is definitely not for those who carry a balance! As well, if you have two Capital One cards, or have applied for a Capital One account within the last 45 days, you will not be approved.
For those who don’t meet the income requirement, and don’t want to pay the annual fee, there is also the Aspire Travel Platinum MasterCard. The Platinum version only earns 1 mile per $1, 5,000 point start-up bonus, and 1,000 point anniversary bonus. It has no annual fee, but lacks most of the higher end travel insurance benefits. However, it does still offer travel accident, car rental, baggage delay, price protection, purchase assurance, and extended warranty.
How Does Aspire Compare to Other Travel Cards?
The closest competitor is the TD Infinite, which offers a similar hassle-free rewards program but without the redemption tiers, and has very similar benefits, except medical is only for up to 8 days. It only has a 1.5% return, but travel booked with their travel agency earns 4.5%. This means that if more than 16.7% of your credit card purchases are for travel through TD, you can get better than a 2% return. There is no option to redeem for cash though. The TD Infinite costs $120/year but if you have Select Service (keep $5000 in your account) you can have this waived.
It is difficult to compare with any other travel cards, because they have redemption systems based on the distance you fly. With these cards, the value of your miles varies widely due to the huge differences in ticket prices between different times of year or the size of the city you fly to/from.
Collecting Aeroplan or Air Miles may also result in redemption hassles, such as limited seat availability or blackout dates. RBC’s Avion card avoids those problems, but restricts you to using their travel agency. For those who are willing to put up with the hassles, and who frequently fly on dates or between locations that are more expensive, these cards can really pay off, with returns of 4% or more.
Most of the insurance coverages on Capital One cards are underwritten by American Bankers Insurance Company of Florida, and this same company is used by TD and RBC too.
The combination of 2% return, hassle-free rewards (well almost), option of 1.5% cash back return, and extensive insurance benefits makes the Capital One Aspire Travel World Mastercard one of the best travel reward cards ever. The net $20 annual fee is paid for if you just spend a mere $1,000 per year! And with the 35,000 miles sign-up bonus, they are effectively giving you a $230 bribe (after annual fee) to take this card.
For those of you who are also travel rewards enthusiasts, how does this new card stack up against your favorite program?
Update Feb 2015
Unfortnately, this card has been grandfather, and replaced with their new World Elite card. Basically the same card with the same annual fee, but without the 10,000 ($100) annual bonus.
The bright side is that there is still a $75 cash back rebate offered here.