How understanding your travel rewards can maximize value

Credit card on laptop keyboardI have two different MasterCard credit cards, one for personal expenses and the other for business expenses. Although on a cursory glance they appear to have a similar travel rewards program, in fact there are significant differences. Understanding the distinct features of each card helps me to maximize the value I get from each one.

MBNA Rewards World Elite MasterCard

My business card is the MBNA Rewards World Elite MasterCard. The annual fee is $89. I earn 2 MBNA Rewards points for every $1 in eligible purchases. Each point is worth $1 that can be used for the purchase of an airline ticket, car rental or hotel room. So if I have 500 points, I can buy an airplane ticket worth $500 including any taxes and fees. If I don’t have enough points, the balance will be charged to my card.

Bookings can be made online directly from the MBNA rewards site just like booking with Air Canada or a third-party vendor like Expedia. There is also a customer care line where you can get help or book on the telephone.

Capital One Aspire Travel MBNA

For personal expenses I use a Capital One Aspire credit card that costs $120 a year. I got 35,000 bonus miles with my first purchase, with a value of up to $350. I will get 10,000 bonus anniversary miles every year worth up to $100 which will essentially pay for the annual fee. This card also awards 2 points for every dollar spent.

But when it comes to redeeming travel points, the Capital One card is a little less generous than my business card for smaller amounts. As illustrated below, to get full value for the points accumulated, I need to spend them on a purchase worth over $600.

 

Miles Needed

For Travel That Costs…

15,000 Up to $150
35,000 $150.01 – $350
60,000 $350.01 – $600
100x cost $600+

 

Also, if I make a purchase, I must have sufficient points to get a rebate for the whole amount to use the points. So if I buy a ticket worth $600 and I only have 500 points, I don’t have the option to apply them for only part of the bill.

However, what I really like about the Capital One card is the concept of “a purchase eraser” that lets me use points towards any purchase for 90 days after. So I recently booked two Air Canada tickets to Europe for a total of about $1,700. I had enough points to immediately erase the cost of one ticket. By the end of three months I should have enough to get also get a rebate for the second ticket.

These examples show why it is important to fully understand how your travel rewards program works to get the best possible value from your card. However, I have only compared one aspect of the travel rewards program of two credit cards I happen to use regularly.

If you are on the market for a new travel rewards card I highly recommend that you check out either Rewards Cards Canada or Rewards Canada for much more comprehensive information.

3 Comments

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