Capital One – The Most Rewarding Reward Program?
Posted on 13 April 2010 | Category: Banking, Capital One, Debit Card
I am not sure I would agree with the statement – however one element of their rewards program on the bank account is interesting.
In another post we will fully dissect the rewards structure but for today atleast just an appetizer.
Capital One will give you 10 reward miles for every debit transaction on the account – no big deal, they are not alone in giving points for debit transactions – it is the gimmick of choice for debit cards and credit cards at the moment.
What stands out is that they give you 10 miles (worth about 10 cents) per transaction – again big deal we hear you shout.
So what does this boil down to – you spend $10 you get ten miles worth 10 cents so you are looking at 1% return – equivalent to credit card reward program returns. Obviously if you spend $100 then it becomes 0.1% – not so hot.
But you are looking at this the wrong way – what about those sub $10 transactions – this is where it gets interesting.
Yes, Yes we hear you shouting. Many stores don’t allow transaction below $10 – but there are a few that do – infact their main selling point is usually some low dollar transaction. We are thinking of iTunes, RedBox, DVD Express, McDonald’s to name a few.
So you download a song for $1 – and you get 10 cents back in miles – that is 10% return – that we will agree is one of the most rewarding programs we can think of for now.
Just because we are who we are, we had to test it further. So we pumped 50 cents of gas at a local BP station and yes we got our 10 miles – 20% return. We went further, 30 cents of gas – 10 miles – 33% return. On our third attempt our fearless investigator filled the tank – he was getting funny looks from other pump users, concerned looks from the garage attendant, puzzled looks from the kids and a most infuriating look from his wife in the car.
We don’t necessarily recommend breaking your gas station visits into $1 or less transactions – but if you do have small transactions ( sub $10) the Capital One Bank debit card may be what you should reach for.