Capital One Aspire World MasterCard Review: Million Dollar Journey

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Capital One Aspire World MasterCard Review Posted: 18 Jun 2010 03:30 AM PDT 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 World MasterCard (link). The Aspire World card is very similar to Capital One’s Miles Plus card (link), 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. The Rewards 2 miles per dollar on everything you buy, including any travel you want to redeem for. No limits or tiers on earning miles, and they never expire. 35,000 miles (worth $350) sign-up bonus, earned on your first purchase. 10,000 miles (worth $100) anniversary bonus every year. $120 annual fee is effectively offset by the anniversary bonus for a net annual cost of $20. Best in Class Insurance Coverage The Aspire 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: 4 hours or more, $250/day/person. Trip Interruption: $5000/person. Trip Cancellation: $1000/person. Baggage Loss: $1000/trip. Baggage Delay: 4 hours or more, $100/day/person. 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). Redemption System 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. Here is a screenshot showing how a $133.42 purchase is multiplied by 9/10 to make the redemption amount $120.08, though in this situation it doesn’t help improve the redemption percentage. 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%. Eligibility The Capital One Aspire 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! Also, this card is not available in Quebec, NT, NU, or YT.  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 Gold MasterCard (link). The Gold 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. Differences Between Aspire and Miles Plus The biggest difference between the two siblings is the 10,000 miles anniversary bonus which effectively makes the annual fee only $20 on the Aspire World, compared to the $99 for the Miles Plus card. Both have free additional cards. The Aspire World card has more insurance benefits including the emergency medical, flight delay, trip interruption/cancellation, and baggage loss. For those who already have the Miles Plus or another Capital One card, there is currently no option to upgrade to Aspire, though Capital One is working on it. In the meantime, you can submit a new application and they will transfer your reward miles once you receive the new card. A new application does require a hard credit check though. 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 (see ratings), and this same company is used by TD and RBC too. Editors note: Here is an updated post on the top cash back credit cards and the top rewards credit cards, all cards listed have no annual fees. Conclusions The combination of 2% return, hassle-free rewards (well almost), option of 1.5% cash back return, and extensive insurance benefits makes the Aspire 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. Click here for more details! For those of you who are also travel rewards enthusiasts, how does this new card stack up against your favorite program? Popular Posts: Canadian Discount Brokerage Comparison Top 6 ways to Save on Auto Insurance High Interest Rate Savings Accounts Top Cash Back Credit Cards in Canada Questrade Review Are Hybrid Vehicles Worth it? Tax Free Savings Account (TFSA) Copyright 2010 MillionDollarJourney – All Rights Reserved

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