Tuesday, 16 November 2010

My Search for a Travel Rewards Credit Card

Recently my credit card came due for its bi-annual replacement so I wanted to check that I am still getting the best deal. Travel rewards credit cards give you points for what you spend that can be redeemed for travel or possibly merchandise. Not surprisingly, offerings vary quite a lot between card companies and there is lots of devilish detail and fine print that can turn a seemingly good deal into a disappointing choice.

Two web sites that I found to be extremely useful with lots of detailed comparative info and unbiased advice:
  • Rewards Canada - almost one-stop shopping for the features and costs of available cards, saves a huge amount of work flitting around vendor sites with its large spreadsheet-like comparative table. It seems to be quite up-to-date with the latest temporary bonus offers and specials. There is even a top 5 credit cards for 2010 article. The same web owner runs sister sites for the UK FrequentFlyerBonuses,co.uk and for worldwide FrequentFlyerBonuses.com.
  • Financial Consumer Agency of Canada - yes, that's right a federal government agency actually can manage to supply useful information at its section on credit cards. The unique info, not found on the Rewards Canada site, is the table of extra fees and charges, and particularly for the traveller, the Cash advance fee outside Canada and the Converting transactions made outside Canada into Canadian currency (which, frustratingly, is 2.5% in the vast majority of cases)
The tables are invaluable for quickly eliminating cards that do not meet basic criteria e.g. for me, I absolutely want a card with Auto Rental Loss/Damage Insurance (which avoids needing to pay the usurious daily fees charged by rental companies to cover any damage, whether it's your fault or not; funny that if you decline the rental company coverage, they do not ask for proof that you have other cover, which of course means the rental company has its own insurance for damage and you are only lining their pocket ... but since you must sign on the rental agreement that you will pay for damage, you still are wise to get some insurance from somewhere). That meant, for example, eliminating the American Express Blue Sky card.

Despite the top 5 article mentioned above, my eventual choice did not settle on their top-rated RBC Visa Avion Card. Instead the separate Travel Anywhere Credit Comparison showing rewards redemption values versus spending required focused my choice initially on the Capital One Aspire World MasterCard. It seems to offer the best spending to reward ratio. Note the word "seems".

The fine print on the card reward scheme, found only by drilling down into the Capital One website, has some tricky conditions that ensure almost no one will be able to get full value from their points and achieve the seemingly best-in-class rewards. The tricky bit is buried in the Important Disclosures document you see only after starting the application process under the heading Reward Miles Redemption, where it says: "... The reward mileage requirement is as follows: 15,000 reward miles are required for tickets up to $150.00; 35,000 reward miles are required for tickets from $150.01 up to $350.00; 60,000 reward miles are required for tickets from $350.01 up to $600.00. For tickets over $600.00 in value, the required number of reward miles will be determined by multiplying the cost of the ticket by 100 (ex. $741 ticket requires 74,100 reward miles). You need to have the minimum reward miles required in order to redeem - partial redemptions will not be processed." In other words, you cannot buy a $500 ticket and top up the missing $100 you need. You must always use more points than the cost of the ticket. Unless you spend big amounts every year on the card - like $25,000 - you won't get to the 60,000 level of points where the no top-up point loss penalty gets less onerous. For me at least, it would be far too long before enough points for trans-Atlantic flights ($1000+) could be useful. Lesson, read the fine print.

After hours of reading the fine print, I literally came back to the place I started - my existing TD Travel Visa Infinite card. Not that TD Visa is the most wonderful outfit ever (see my own less than wonderful experience with them here and here). But their rewards accumulation and their redemption methods (especially where one gets triple the points when booking travel through their own travel agency, which I have found to be responsive and easy to reach) fit my current lifestyle. The devil is in the details and it is the devil I know.


Anonymous said...

I've had both Enterprise and Thrify's rental car demand insurance details in the US when I declined coverage (they wanted the insurer name and policy #).

It's rare, but has happened. I suspect the motivation is to provide yet-another-barrier to opting out of their coverage, since they always have backed down when I expressed annoyance at being asked.

CanadianInvestor said...

Anon, I've always told them I have cover with the credit card and that has ended the conversation.

One place I actually did take the auto rental company damage cover was in Tenerife. It was an el cheapo rental, the extra per day was very low and all the rental cars are festooned with dents and scrapes. The rental company didn't even bother noting all the damage. They expect every car to come back with more abuse. It could be because of the huge numbers of Brit tourists, who of course are used to driving on the left while one drives on the right there. Funnily enough, we didn't have any scrapes ourselves, at least none I could tell.

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