Using Capital One Reward Miles for Gift Cards
Now that Citibank has decided to nearly double my interest rate (from 9.99% to 16.99%), I am re-evaluating my Capital One Miles Plus card. One of the great benefits I used to get from my Capital One MasterCard was the ability to redeem point for gift cards. I furnished my daughters bedroom on the back of 2 $250 Toys R Us gift cards. They used to cost 10,000 points for a $100 gift card. In other words, a 1% redemption rate.
But, the cost has seemingly doubled. The recent Capital One No Hassle Miles Holiday Reward Catalog lists several gift cards, all at a rate of 20,000 points for a $100 gift card, or just 0.5% which sounds just terrible.
- Barnes & Noble $50 Gift Card = 10,000 miles
- Blockbuster $50 Gift Card = 10,000 miles
- Nordstrom $100 Gift Card = 20,000 miles
- Sak’s 5th Avenue $100 Gift Card = 20,000 miles
- Toys R Us $100 Gift Card = 20,000 miles
It is that last one that hurts the most because I know for a fact I got that for the better rate before.
But, there is a new wrinkle. Earning points is different now too.
Earning No Hassle Reward Miles
The card used to earn 1 mile per dollar, so figuring out the monetary value of rewards was pretty easy, but things have changed.
The Capital One Miles Plus MasterCard earns 2 miles per dollar at certain stores:
- Book Stores
- Gift, Card & Novelty Stores
- Art Supply Stores
- Craft Shots
- Video tape rental stores (no word on whether this century technology video rentals like DVDs are ok)
Then, the Capital One card earns 1.25 miles per dollar spent every where else.
So, theoretically, I would be getting the same return as before for those 2 miles per dollar shopping spots, but 75% less return for everywhere else.
To break it down, here is the monetary return on Gift Cards from the Capital One Rewards Catalog:
10,000 miles / 1.25 miles per dollar = $8,000 dollars spending = $50 Gift Card = 0.625% Cash Back Equivalent
Considering there is no shortage of companies that will over card holders 1% cash back, the Capital One Miles Rewards Card moves to a FAIL for gift card rewards.
We’ll take a look at travel rewards next. If they aren’t much, much, better, then I guess it will be time to analyze rewards cards again.