Two popular travel credit cards are the Barclaycard Arrival Plus and the Capital One Venture. Both earn 2 miles per dollar, but do the credit cards actually earn miles? In my opinion, no.

I often get asked a couple of questions regarding how the miles work for the Barclaycard Arrival and Capital One Venture card. For someone who isn’t familiar with the points game, they sometimes think that if they earn 1,000 miles they get to fly 1,000 miles 🙂 While I wish that were the case (I’d have seen the entire world by now) you have to think of miles as cash back that can be redeemed towards travel purchases. 

Why are they called miles?

Here’s my thought. You earn 2 miles for every dollar spent. In return Barclaycard and Capital One allow you to redeem those miles towards travel purchases. Since the miles are used towards travel purchases only, it would make sense to call them “miles”.

You can redeem your miles towards cash back, but you are severely devaluing your miles by earning only 1% cash back then. I would highly recommend NOT doing this. If you’re interested in cash back there are better cards out there that earn up to 6% cash back in certain categories.

How should I think of miles then? Easy. Instead of calling them miles, consider it cash back! With the Barclaycard Arrival Plus and Capital One Venture, you earn 2% cash back on every purchase and in return you can use this cash back towards travel purchases.

Cash Back

Think of Barclaycard Arrival and Capital One Venture miles as cash back that can be used only for travel purchases.

How to use miles

In order to use your miles, you need to evaluate your balance to see what it’s worth. For instance, both the Barclaycard Arrival Plus and the Capital One Venture come with a 40,000 mile sign-up bonus. 40,000 miles is equivalent to $400. Move the comma (,) over to the right one spot and make it into a period (.). Therefore, 2,500 miles would be considered $25. Easy, right?

(More info here on my comparison of the Barclaycard Arrival vs. Capital One Venture)

Once you’ve determined how many miles you have, you can then use them to erase a travel charge once its been posted to your account. Let’s say you have 40,000 miles sitting in your account and you want to buy a $400 airline ticket. You would simply charge the airline ticket to your credit card and once it posts to your account in a few days you would use the miles to erase the ticket entirely. Just like it never existed!

What if I don’t have enough miles? Not a problem! Let’s say that ticket cost $450, but you only have 40,000 miles. You can still make the purchase and erase $400 worth. You would just be responsible for the remaining $50.

Travel Hack Guy in New York City

Last year I used my Barclaycard Arrival miles to fly my sister and me out to New York City for free! Since tickets from MSP to NYC are relatively cheap, it didn’t make sense to use airline miles.

Are Barclaycard and Capital One miles the same as airline miles?

My co-worker asked me this the other day and he brings up an excellent point! He decided to go with the Capital One Venture card as his first travel card and understands the concept that 40,000 miles is equivalent to $400.

Now that he’s had his Venture card for about 6 months, he received a Chase Southwest offer in the mail for 50,000 miles. He turned to me and asked “are the 50,000 miles worth $500?”

Absolutely not! I explained the concept that each airline has so many award seats that they open up per flight. Depending on which fare class you want to book, the typical Coach ticket costs 25,000 miles round-trip. Therefore, his Southwest 50,000 mile offer should be good enough for at least 2 round-trip tickets regardless of the cost.

Why choose an airline credit card over Barclaycard or Capital One?

As my co-worker was looking over his Southwest 50,000 mile offer, he noticed that it only earns 1 mile per dollar. Why would anyone choose a 1 mile card over a 2 mile card? It’s all about marketing! Barclaycard and Capital One have done a very good job and making people believe that they truly are earning more miles and getting a better value than the airline credit cards. That’s not always the case.

Airlines Miles

I love airline miles, because I can use them to fly very inexpensively over to Europe! If I tried to use Barclaycard or Capital One miles, that would require a LOT of spending on my part!

I love examples, so here’s 2 below to help you understand a little better:

  1. Let’s say you have a $200 airline ticket you want to book. If you charge this to your Barclaycard or Capital One card, it would require 20,000 miles to erase the charge. An excellent use of your points. This means you’d have to spend $10,000 in order to earn 20,000 miles.
  2. If you were to hop over to AA.com and look at their award tickets and they require 25,000 miles for the same flight, then this would be a horrible redemption rate. That means you would spend $25,000 to earn 25,000 miles, just to redeem those miles for a $200 flight! NO…. Don’t do it!
Cost of ticket:  $200 $800
Spending required with Barclaycard/Cap1 to earn enough miles to erase ticket: $10,000 ($10,000 x2 = 20,000 miles) $40,000 ($40,000 x2 = 80,000 miles)
# of miles needed in order to book standard Coach ticket with airline miles: 25,000 miles 25,000 miles
Spending requirement on typical airline credit card: $25,000 ($25,000 x1 = 25,000 miles) $25,000 ($25,000 x1 = 25,000 miles)
Difference of:  -$15,000 +$15,000

In the example above, you see for the $800 ticket it makes sense to use airline miles to book your award ticket! You could save yourself $15,000 in charges if you use airline miles versus Barclaycard/Capital One miles!

Airline miles can come in very handy when the flight is expensive. Let’s say you’re trying to book a domestic flight that costs $800 and American Airlines only requires 25,000 miles. That means if you were to spend $25,000 on your Citi AAdvantage credit card, you’d have to enough miles to book this expensive ticket.

However, if you were to spend $25,000 on your Barclaycard Arrival Plus or Capital One Venture card, you’d only earn 50,000 miles. Now that we know how to convert Barclaycard and Capital One miles to cash, 50,000 with them is only worth $500. You’d still be responsible for the remaining $300!

As you can see above, it comes in handy to diversify your miles and have both. I like to use my Barclaycard and Capital One Venture miles for tickets that are inexpensive. Then, for tickets that cost a substantial amount, I’ll use miles that I have with an airline.

 

Bottom Line

Diversify your spending and don’t put all your eggs into one basket. Use Barclaycard and Capital One miles for less expensive fares and use airline miles for more expensive tickets. I’d also like to point out that airline award tickets are more difficult to book since the airlines only release so many seats in advance. Give yourself plenty of time to book those award tickets if you go this route.

I know this was a lengthy post and I included a couple examples, but if you have any questions, please don’t hesitate to comment below!