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Capital One Just Doesn’t Get It – Give More Rewards!

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Do you have a Capital One credit card in your wallet? If you said yes, you’re probably in the minority (at least of the people that I know personally). I don’t have a Capital One credit card and those commercials with the barbarians aren’t really convincing me that I really want one of those credit cards in my pocket. Their flagship card, the Capital One No Hassle Rewards, really isn’t much to write home about!

What you get with that card is 1% cashback followed by a 25% annual cashback bonus. Don’t let the 25% number fool you, 25% added onto 1% is exactly a whopping 0.25%. There are no earn caps, the rewards don’t expire, and there is no-hassle. Whooopeee!

That’s awesome, except my current credit card system leaves Capital One in the dust. When I eat out or go to the movies, the Citi mtvU card gets me 5% cashback. When I buy gas, Discover Open Road gives me 5% cashback. When I make travel purchases, my Costco American Express TrueEarnings card gets me 3% and 1% on everything – no caps. Where does that leave a 1.25% cashback card? No where, I’m not slipping a fourth card into my wallet so I can get an extra 0.25% – even if it never expires.

The only advantage that I see with a Capital One card is the fact that Capital One does not charge foreign exchange fees (for when you use your card overseas) and they actually eat the 2% fee that Visa/MasterCard charges them, which is a nice gesture.

Capital One – Give better rewards if you want to be what’s in my wallet.

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13 Responses to “Capital One Just Doesn’t Get It – Give More Rewards!”

  1. FeeExpert says:

    Ever wonder where the card companies get the money for these rewards? Every year, they raise the interchange fee that they charge merchants when customers swipe credit cards. The problem is, these fees have skyrocketed and merchants are passing these costs onto you and me. This is like a hidden tax to fund these reward programs.

    Some gas station owners are fighting back, as is the case in New Jersey. I have more information at my organization’s website at UnfairCreditCardFees.com

  2. John says:

    I use the Capital One No Hassle Miles Ultra card for my business purchases. At 2% cashback, it’s not the best out there, but with my charged amounts, it makes up for the $39/year fee very quickly. The big kicker is that I don’t have to pay foreign exchange fees, which is huge for me as I buy a lot of my products from Europe. I did all the math, and with my situation, nothing else comes even close to the bottom line for me.

  3. Cate says:

    Interesting that you bring this up now. I just got a letter from Capital One, noting that my CapOne card has been doing nothing but collecting dust. They offered to make some concessions to get that card into my wallet. Their suggested concession: dropping a point or so off the interest rate if I’d be willing to call up and beg them for it. Well who cares about lowering your silly interest rate?? In this household we make it a rule to never pay credit card interest, ever. What an uninspiring offer.

    “You’re going to have to give better rewards if you want to be what’s in my wallet!” was exactly my reaction too. They’re going to have to offer at least 3% everyday rewards, or at least 6% on gas/food/pharmacy, to earn a spot. And don’t expect customers to waste an afternoon haggling over the phone, either, until you’re committed to offering that level of incentive. The credit card market is highly competitive, and apparently Capital One haven’t figured out what it takes to compete. Yet.

  4. Gerry says:

    I agree with you that Capital One does not get it, but I doubt you get 3% for travel with the Costco Amex….everyone else gets 2%.

  5. Tuxster says:

    I think you are being unfair. I could easily argue that it’s not worth for you to carry the MTVU or the Open Road cards, but carry the Capital One instead, depending on your spending patterns:

    1) You have to always think about which card to use at which situation. (I’m at a supermarket, was it card A that gave 5% or was it card B that gave the 3%?). You are also going to have to keep track of different closing dates and due dates to make sure you pay all of your credit cards on time. Most people do not have the time or the attention span to worry about all of this, so a “no hassle” card makes much more sense, since you get straight 1.25% without having to worry about anything.

    2) How much do you really spend on going to the movies and dining out, vs. other expenses? If you go to the movies once a week, and assuming you’re spending $10 each time, that addition 3.75% rebate gets you a whopping $1.50 a month. That’s the equivalent rebate you get from the “additional 0.25%” that you so easily dismissed, if you are spending $600 on various other charges (general merchandise, rent, utilities, etc.). I don’t know about you, but I spend much more than $600 a month on the miscellaneous charges, to easily make up for the additional bonuses I am missing by not using mtvU. Similarly, I drive a Civic, and live only 4 miles from work, so I only need to buy gas once a month, which means the same thing applies to the Open Road card.

    3) Let’s not forget all the fine type disclaimers from those cards, where not each gas station and supermarket doesn’t qualify, because they are not a pure gas station or a pure grocery store. Let’s also not forget all those stores that don’t accept American Express so you have to figure out another card to take out from your wallet…

    So, for me, Capital One is truly a ‘No Hassle’ card. I can use one card, not worry about whether I’m getting this or that type of additional rebate, knowing that I get the same rebate at every location…

  6. Fred says:

    I actually do have a capital one card. I can’t stand them, but it was my first card, and I didn’t get another one for a few years (I’m 25, and don’t have a lengthy credit history. That is the only reason I keep it.)

  7. Elizabeth says:

    I am currently planning a destination wedding in Canada at a cost of $10,000-15,000. I calculated it out and will be applying for the Capitol One Card specifically because it doesn’t charge an exchange fee. This savings will override the cash back I would get with other cards.

  8. Scott says:

    Have you really looked at you MTVu card recently??? It doesn’t give 5% cash back it gives 5% in thank you points. There is no way to convert points 1 to 1 into cash. Right now it is 16000 points for $100 which means you are actually earning 3.2% cash back. You can also use 35000 points for a $250 statement credit, which is 3.5%. The only 1 to 1 exchange I’ve seen is a Macy’s gift card, 10000 points for $100 card, but then you deal with Macy’s high profit margin. Please tell me if I missed something, I’m just concerned that you’ve convinced yourself you are earning 5% cash when you are not.

  9. jim says:

    Hey Scott, the mtvU card gives 5% cashback equivalent if you use it to pay off your student loans, which I’m doing; sorry about that. You do bring up a good point though, without the student loans, you aren’t getting 5% cashback. I sometimes forget that people read articles in a vacuum and don’t realize the caveats that might have been mentioned earlier (which is a mistake).

    Thanks for the heads up.

  10. Scott says:

    Great!! Makes me wish I still had student loans. — Nah it doesn’t :) .

  11. Phil says:

    I have had a Capital One card for awhile now and have been fine with the bonus. However today I recieved a letter in the mail stating that I am receiving an aniversary bonus of $10,000. I went on the website to check my reward balance only to find $165.00 in there. I called them and they stated that it was a typographical error and should have read $100.00. MMMMM, do you think I could create some bad publicity for them ???

  12. JOSE says:

    What’s the problem with Capitol One Accountants that my Wife has been making payments to you folks since June 2009 and you haven’t accredited it to the proper account and besides that, they have refused to mail her a Copy of her Statements. But they were sure to call to tell her-her balance due even though she never stopped making payments.

  13. DJM says:

    Has anyone ever compiled a list of “Major Grocery Stores” for Capital One. I really don’t want to waste time opening an account only to find my local chain is not included (regional player, but not national). I’m shocked that I can’t find a list anywhere on the internet. Capital One will not give you this information, but you would think users of the card could post the chains where it works for the 2% cash back reward. Buehler???


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