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So far we have talked a lot about airline miles (like Southwest and United) as well as hotel points (like Hilton or La Quinta). We also talked about some of the bank programs, like Chase or American Express, where the main benefit is being able to transfer points to a variety of different partners.
Another important type of point to earn are ones like the Barclay Arrival, Citi ThankYou points and CapitalOne Venture. These points are what’s called “cash-back” cards, where instead of earning airline miles or hotel points, you earn a percentage of your spending back, which you can then apply as statement credits
Citi ThankYou points
Citi has several cards that accrue ThankYou points – here’s the ThankYou Premier, which is the best one. You get 50,000 ThankYou points, which can be redeemed for $500 in statement credits. You can also buy things with them, or redeem them (with a 1.25x bonus) for travel, but typically doing either of those is not going to be as great a deal.
- 3x points on dining and entertainment
- 2x points on hotel and airfare
- 1x points on everything else.
These are the guys with all the Alec Baldwin commercials on TV (“What’s in your wallet”). They talk about having no blackout dates, etc. Here’s a link to the Venture Rewards credit card. That link offers 20,000 points as a signup, but I believe there are offers for 50,000 points with $3,000 in spending over the first 3 months.
The Venture card offers 2x points on everything, and again, can be redeemed for statement credits as well as other things. I don’t bother listing those out because I’ve found that generally, the winner is cold-hard-cash 😀
Why / when could this be useful? Let’s talk about Southwest, where the points are revenue-based, with each point costing 1.66c. So an $89 fare would cost 5,361 Rapid Rewards points. Setting aside the signup bonuses, a Southwest credit card (or Chase which can then transfer to Southwest) earns 1 point for each dollar you spend. So you’d have to spend $5,361 to earn enough points for that flight. One important note is that in March, Southwest is devaluing their points to each one being worth 1.43c, so that $89 flight would then cost 6,223 Rapid Rewards points
So instead of spending $5,361 with your Southwest credit card, what if you made that purchase on your CapitalOne card? Since it earns 2x points everywhere, you’d earn 10,722 Venture points. Then you make your $89 purchase on Southwest, apply 8900 of your points as a statement credit, and you still have 1,822 points left over!
Not to mention, that as far as Southwest is concerned, that $89 fare is just a regular paying fare, so you’ll earn 6x points (534 points) on that flight!!
Barclay recently introduced the Arrival MasterCard, which works in much the same way, but in a sense combines some of the best features of the other two. The current best offer is 40,000 points when you spend $1,000 in the first 90 days.
The Arrival card works like the CapitalOne card, where you just buy the travel (or anything really) item with your card, and then use your Arrival points to get a statement credit. But it ALSO has the extra bonus for redeeming on travel, in this case 10%. So when redeeming for travel, the points are essentially worth 2.2c a point.
You can do the same thing as we talked about with Southwest, where you actually pay for the Southwest flights and get a statement credit with your Arrival card. You can also use a cash-back card to purchase miles on some of the airlines that don’t operate a revenue rewards plan.
So if you want a roundtrip North America ticket on American that costs 25,000 miles to redeem, instead of spending $25,000 to get those miles, if you made that spend on your Arrival card, you’d have $550 that you could apply towards airfare.
Now, this is somewhat of an over-simplification, since there are signup bonuses, as well as many credit cards offer a category bonus on spending. For example, the Chase Ink card gives 5x points on spending at office supply stores. So $500 spent with your Ink at Staples gives you 2500 Chase points, which would be better than the $11 you’d earn if you did it on your Arrival card.
I should also mention Discover as well, which offers 5% cash back in certain categories during the year. That can also be redeemed for statement credits.
But here’s how I would order my spending
- Spending to get any credit card bonuses (if I signed up for a card that offers 50,000 points for spending $1,000 in the first 3 months, that’s the card I want to use first)
- Category bonuses – for example, if I’m at an office supply store, I want to use the Chase Ink to get 5x points
- Barclay Arrival card – earn 2.2c for each $1 of spending everywhere else