The truth about travel credit cards

Many have price brackets designed to burn points faster

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by

From the September/October 2014 issue of the magazine.

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Imagine you’re shopping with a $100 gift card and you find something you want for $58. However, when you go to the counter, the register rings up $100! After challenging the clerk, you’re told that there are spending “tiers” and any purchase under $100 is rounded up. Sounds absurd, right? Well, that’s how many credit card reward programs work. Take Capital One’s redemption schedule: under their system a $149 flight requires 15,000 points, whereas a flight costing just $5 more would push you to the next tier and require an additional 20,000 points. The only way around this is careful card selection. That’s why we’ve factored the “burn rate” into our calculations, to show you how far cards will really take you.

A truly free flight

If you’ve ever booked a flight on points you know that most cards only cover the base fare—leaving it up to you to cover the taxes and fees, which make up between 15% and 40% of the cost. To avoid this, look for cards that cover the cost of the full flight and check to see if the issuer has a separate redemption schedule for taxes and fees. Below, we’ve listed some great cards that allow you to use your points for taxes and fees as well. Just keep in mind that you’ll burn through your points faster with these cards:

CONE10Capital One Aspire Travel World MasterCard

BNS14

Scotiabank Gold AMEX

MBNA05

MBNA Rewards World Elite MasterCard

CM12

CIBC Aventura Gold Visa

Basic CMYK

HSBC Premier World MasterCard

6 comments on “The truth about travel credit cards

  1. I don’t see TD Canada Trust listed as a good travel card. I love it because it pays both fare and taxes. I get several free flights a year as well as car rentals and hotels. I love the activities section. I also love that it’s linked to expedia.ca

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  2. The last time I used my BMO air miles card, 3000 pts were enough for a trip from Ottawa to Puerto Vallarta. Now, just a few years later it cost me all of my air miles, almost 3,000 pts, plus $1,000.00. That covered a return flight from Ottawa, via Toronto and an all inclusive stay at a hotel for three days. This doesn’t include daily service charges at the hotel. Needless to say, I’m disappointed. This card gives me 1 point every $15.00 and has a yearly fee of about $100.00. Where’s the deal?

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  3. I have used my RBC Visa Gold points for total flight costs.

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  4. im wondering about the RBC Avion as I use it for travelling the world. How does it rate?

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    • Hi Lorie, please try our Credit Card Selector Tool to find out if the RBC card ranks high for you based on your spending habits.

      Reply

  5. Capital One only has “Tiers” up to 60,000 points ($600). There is no “Burn rate” on amounts redeemed above $600. i.e Trip booked for $620 = $620 (62,000) pts redeemed. If $600 seems high, book your trip through a travel website & add on the car rental or hotel etc to make it one transaction – it’s not hard to go over $600!

    Reply

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