Capital One Venture Rewards Credit Card: Is the Annual Fee Worth the Rewards?

You may have seen the television ads for the new Capital One® Venture® Rewards credit card. The ads tout double rewards for every dollar spent, which made the advertisement seem a little too good to be true. I immediately expected to find large annual fees and heavy penalties if the program guidelines aren’t followed exactly. So, I decided to investigate.

If you have excellent credit and usually pay your bill in full every month, the rewards are very attractive. The rewards never expire as long as your account remains open, and you also earn an additional 10,000 bonus miles if you spend at least $1,000 within three months of your membership enrollment date. If you want to use your rewards for an airline ticket, there are no restrictions on airlines and there are no blackout dates. The amount of rewards you need for a ticket depends on the dollar amount of the ticket; you would multiply the amount of your travel purchase by 100 to determine the amount of rewards needed. For example, if a ticket costs $300, you would need 30,000 rewards for the ticket. Since you earn double-rewards, that would be the equivalent of 15,000 miles in most other rewards programs. Additionally, you can book anywhere. That means if you find a really great deal on your favorite website, you can still use your rewards to book the flight. The card also comes with the added benefit of Visa Concierge service, which gives you assistance with travel arrangements, entertainment planning, and more. You could also redeem the rewards for cash, gift cards, or merchandise.

The current APY for purchases is 13.9%, which will vary with the market based on the Prime Rate. Cash advances are made at a significantly higher APR: 24.9%. In addition to the higher APY for cash advances, you will be hit with a cash advance transaction fee of either $10 or 3%, whichever is greater. If you make a payment that is more than 60 days late, you will also incur a 29.4% penalty APR. Late payments will also incur a $39 late payment fee, and you will lose any rewards applied to your rewards balance during the billing cycle that contains the late payment fee.

The card comes with an annual fee of $59, but it’s waived for the first year. Because of the annual fee, I wouldn’t recommend this card unless you spend a lot every month (which you need to, in order to break even on the annual fee) and you pay off the balance regularly. Since the first year’s annual fee is waived, you could always try out the card for a year to determine if it’s worth it for you, and you can close the card if it’s not. Keep in mind that closing accounts can negatively affect your credit score, so you should only try it if the program is already a good fit for your spending and bill payment habits. You can find some reward cards for a $0 annual fee, but the double rewards may be worth the annual fee if you spend enough. Capital One does offer a no-annual fee version of the card, but you get 1.25 rewards per dollar spent. Both cards incur no foreign transaction fees, which is a great benefit for those people who travel abroad frequently.

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