Today we’re talking about Capital One Venture Rewards transfer partners. That’s right, Capital One is teeing up to go toe-to-to with Chase, Amex and Citi by offering their own transferable award currency, Venture Rewards. I shouldn’t really be announcing this like its news, because it’s not last week when the story broke. Sadly, I’ve been sidetracked trying to buy a house here in Seattle, and along with that fubar, other home related things like appliance and landscaping research. You know, the kind of things that will suck the youth out of you quicker than an SJW signing up for an outrage convention. Excuses aside, let’s get going.
Capital One has announced a list of 12 new transfer partners for the Venture Rewards program. Getting right to it, we’ve got AeroMexico, Air Canada, Air France/KLM, Alitalia, Avianca, Cathay Pacific, Etihad, EVA, Finnair, Hainan, Qantas and Qatar. All will transfer at a rate of 2:1.5. Meaning 2 Venture points will get you 1.5 miles at a transfer partner.
Out of all the new carriers that Capital One has announced I currently track values on all but Finnair, Hainan and Qatar. I have my reasons for passing on those last three. Without getting too far into the weeds on any of them, here’s why. Finnair, a potentially valuable transfer partner being a member of Oneworld, and thus opening up award space on American and British Airways has limited online booking opportunities for partner awards. For me, that’s a no-go. Hainan, I’ll admit I would like to dive deeper into, but right now their route network is simply too limited to get a clear picture of how to best use a Fortune Wings mile. For example, despite operating a Beijing – Taipei flight and a Beijing Seattle flight, one is unable to actually book a Seattle to Taipei itinerary. It doesn’t make sense. Furthermore, from the small amount of searching I have done, routes actually bookable aren’t done so at a very good redemption rate. About half a cent per mile is the best I could do. In other words, I don’t think the existence of Hainan changes the value of a Venture Reward point all that much. Though I do have high hopes for the future as Hainan is the only 5-star mainland Chinese carrier.
Then there’s Qatar, a wonderful airline with a complete pain in the ass of an award currency. Why such a pain, because everything is supposedly online, but it’s not. One can only request a reservation on their website. The request will then go to booking who will get back to you within 96 hours. That’s a deal breaker for someone using transferable points that only go one direction. There’s no way I would transfer a valuable Venture Reward or Citi ThankYou point if I wasn’t sure there would be a ticket waiting for me on the other side. The Points Guy values them at 1.1¢ a piece, which I think is absurd.
All told, we’ve got a value of 1.73¢ per Capital One Venture Reward Point
The undiscounted remaining ones are as follows. AeroMexico .54¢, Air Canada/Aeroplan 2.68¢, Air France/KLM 1.04¢, Alitalia .9, Avianca 1.27., Cathay Pacific Asia Miles 2.34, Etihad Guest .84, Eva Air 2.22 and Qantas just .52¢. Worth noting is that undiscounted average is different and always more than I present as the actual value of hotel or airline currency because there is no reduction factor and the undiscounted average ignores zeros.
Time to Get Boring…Sorry
Ok, math time, and I promise to make it brief. How I wrap all this up into a value for the transferable currency itself, in this case, the new Capital One Venture Rewards isn’t simply an average. Doing that would give the same weight to a low value transfer partner and a high value one. Instead, I weigh the values based on their relative weight in the series. The simplest example would be a simple vs weighted average of a series 1-10. The simple average of this series is 5.5, but the weighted average is 7.
Here’s the chart that hopefully makes this clear as mud. In this series, the value one is weighted at 1.81%, while the value 10 is weighted at 18%. This is calculated by using the series value as the numerator and the series total as the denominator. In other words, 1/55 is 1.81%. This weighted average comprises 90% the value of a transferable currency. The remaining 10% comes from the weighted average of each component carrier’s best redemption.
Applying this same methodology to the new Capital One Venture Rewards program and I come up with this chart. I think it’s really worth pointing out that this chart excludes the award currencies I don’t track, Finnair, Qatar and Hainan. That said, unless they’re significantly out of our current range bounds they likely wouldn’t skew the result too much. All told, we’ve got a value of 1.73¢ per Capital One Venture Reward Point. That’s quite good in comparison to any individual airline, but a little less than we’d see from Chase at 2.16¢, American Express at 2.26¢ and Citi at 1.86¢.
So, one of the blessings and curses of putting everything online is the immediate peer review. One only has to look at the comments on the recent review of the new Amex Gold Card I performed to see that YouTube people do not hold back when they disagree with something I’ve said. I’m mentioning this now in case anyone gets out ahead of me and says, now wait a minute Aaron, you present Air Canada Aeroplan miles as being worth 1.82¢ a piece. It then follows that it makes no sense that a Capital One Venture Reward that can convert to this would be worth less. To them, I would say transfer ratios. Remember, one is only getting 1.5 miles per 2 Venture Reward points transferred. Thus, the transfer ratio adjusted value of an Aeroplan mile is 1.365¢.
Capital One Venture Rewards Credit Card
Now, this isn’t a credit card review video, but let’s talk real briefly about the new Capital One Venture Rewards Credit Card. It’s currently being offered with a 75,000 point signup bonus worth an excellent $1,275 at a valuation of 1.7¢ a piece. In addition to transferring to an airline partner, Capital One allows you to redeem for travel at 1¢ per point, netting a solid $750. This signup bonus is available after $5,000 in spend, a bit steep if you ask me, but I suppose Capital One is trying to weed out low spenders. On the earn side, we’ve got 2 points per dollar on everyday spend and a spectacular 10 when using Hotels.com to book lodging. One is earning a 3.4¢ rebate on most purchases, and an unbeatable 17% on hotels. Again, using the value of 1.7¢ per Venture Reward Point. For those not interested in the hassle of transferring, and then booking award travel, the fact that one can erase travel purchases at a rate of 1¢ per point means everyday spend earns 2% while hotels earn 10. That’s a number that’s really hard to beat.
Compared to the Competition
Capital One and it’s Venture Rewards has always been a great program for those who like simple. Not surprisingly, those in the points and miles game have, at least over the last several years, tended to focus on cards that earned Ultimate Rewards from Chase, Membership Rewards from Amex or ThankYou Points from Citi. The ability to transfer to a travel partner meant massive 5-10 point per dollar redemptions were possible. With the roll-out of travel partners of their own, Capital One appears to be joining the party. My biggest complain about the updates is the fact that no major domestic carriers are on the list. That said, Star Alliance member Air Canada is. This should provide access domestically to United, and globally to world-class airlines like ANA, Asiana, Singapore or Lufthansa.
Personally, I like to hoard points until I can redeem for something big and lucrative. Just me, but if I can’t redeem for 3.5¢ per point, I hold off. Because this level of redemption is really only possible via award travel on a partner, the Venture Rewards program has never been of much interest. That said, the announced program updates change the equation. I can confidently say that after I get my new house locked down, the mortgage secured and I’m no longer on a new credit card embargo, the Capital One Venture Rewards card will be on a very short list of new accounts for 2019.