The New King of Cash Back Credit Cards

Link: Barclaycard Arrival PlusTM World Elite MasterCard®

I’ve asked in the past whether you are better off earning cash back instead of miles from your credit card.

  • If you earn 1 mile per dollar, instead of 2% cash back, you’re effectively buying miles at 2 cents apiece. Is that something you would normally do when the airlines offer to sell you miles?

  • It can be a better strategy to earn cash back and use the cash to buy miles than to put spending on a mileage-earning credit card, especially when you would just be earning one mile per dollar for the spend.

  • If you want domestic coach tickets, you’re better off with cash most of the time and just buying tickets (and not worrying about award availability).

I like my miles for international first class travel. And the best use of spending is to earn credit card signup bonuses. But for everyday, unbonused spending many will find that cash is king.

Previously I had argued that the Priceline Rewards Visa was the best overall cash back card. It earns 2% cash on all spending that can be applied as a credit to your monthly statement. There’s also a $50 signup bonus after first purchase, and it’s a no annual fee card.

But the Barclaycard Arrival PlusTM World Elite MasterCard® may be even better.

Key Benefits of the Barclaycard Arrival PlusTM World Elite MasterCard®

Points-earning: The card earns 2 “miles” per dollar but since each point is worth a penny towards travel that’s effectively 2% cash back. And then there’s the 10% bonus on travel redemtpions which makes the return on the card 2.2% cash back — the highest cash back return for all spending across the board of any card I know of.

Signup bonus: 40,000 points after $3000 in purchases within 90 days. That’s $400. But apply it to travel and you get 10% of your points back so you net $440. And apply that extra $40 to travel and you get 10% on that. So it’s actually $444 and so on ($444.44…).

How points redemption works: Request reimbursement for your travel expenses within 90 days, and a couple of weeks later you get 10% of your points refunded. You’re booking on your own (no need to go through a designated portal, you can still use your preferred cash back or mileage-earning portals and/or apply travel vouchers, etc.) with your preferred travel provider, whatever flights etc. you want and earn miles and upgrade as normal.

Annual fee: $0 the first year, $89 thereafter

Additional benefits: No foreign currency transaction fees. Complimentary TripIt Pro membership which normally costs $49.

Now you need to have enough points banked to cover the expense that you want to reimburse on your statement, I don’t believe they do partial reimbursements.

And spending that would earn a bonus on different categories of spending is likely going to be more rewarding on another card.

So I wouldn’t say that 2.2% cash back is best when other cards are offering you bonus points. But for spending, say at your dry cleaner, that you aren’t going to get bonus points for? Cash probably is best.

How Does the Barclaycard Arrival PlusTM World Elite MasterCard® Compare After the First Year?

The Barclaycard product has a $0 annual fee the first year, $89 thereafter. So is it worth keeping?

You’d have to put $45,000 a year on this card after the first year to justify the annual fee versus the I had argued that the Priceline Rewards Visa. That’s because with the extra 1/5th of a percent cash back (when applied to travel) you’ll earn an incremental $90 with $45,000 in spend.

The math works out much better of course if you would otherwise pay for TripIt Pro, and/or you don’t have another no foreign currency transaction fee credit card but do travel outside the United States.

For the first year unquestionably the Barclaycard Arrival PlusTM World Elite MasterCard® is the better card. After the first year it depends on your spending patterns.

(Note that the card does offer referral credit to me if you use my link to apply and are approved, which I greatly appreciate.)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. You only mention redeeming for travel.. how does redeeming for straight cash work? Has it been confirmed that one point equals one cent for non travel?

  2. Personally I would not say Barclays has great service, however they have some decent cards. My Travelocity rewards cards earns 2% value when used on airline tickets and some other travel redemptions via Travelocity. Priceline 2% cash back is a no fee card. I have little customer service issues but they can be a little weird on various things like multiple cards with them and this should be considered. Lately if you have strong credit they seem to be willing to allow you to have a few of their cards.

  3. I find it surprising that none of the bloggers, while featuring the Barclays Arrival cards over the past week, have mentioned the BofA Privileges Travel Rewards Card. It has a similar scheme of 2% cash back (when redeemed as statement credits against travel purchases), and customers with BofA or Merrill accounts get a 10% yearly bonus, making the effective cash back 2.1%. While that card has an annual fee of $75, it is waived for those with $50k or more with BofA Or Merrill, so many readers may be able to get the high cash back without an annual fee.

  4. Why use these card when you can do the Fidelity card at 2% cash back? 2% in travel rewards is ok but there are plenty of cards out there that offer a better value.

  5. Gary–no doubt this is a great card if you are spending all on it for the cash back incentives, but I am encouraging my readers to go for the bonus and acquire the $440 airfare, and park this card under a shaded tree, until the lease expires hehehe.

  6. @Ozaer N – I would argue this card is good for otherwise-unbonused spend during year 1, people forget that when they put spend on a card earning 1 mile per dollar they are in effect paying 2.2 cents a point for the mile

  7. To clarify, this is not a “2.2% cash back” card nor is it a “2% on everything” card. If you redeem for cash back it is only a 1% cash back card. Yes, it is a 2.2% card if you redeem for travel. Also note the minimum travel redemption is 2500 points. I do agree it is a good card to consider given the potential to earn 2.2% back in travel rebates, the sign up bonus, and other potential benefits you haven’t mentioned such as 0% APR for 1 year.

  8. @HikerT – it’s 2.2% on travel which is how I’m explaining it, and I think it’s very important to understand that as the opportunity cost for earning 1 mile per $ on standard credit card spend.

  9. Gary this seems like a clone of the C1 Venture … is the 10% bonus really that big of a deal? Also if we’re talking sign up … then C1’s 100k signup (when you meet the req) is a lot better or am I mistaken?

  10. @Vince this signup bonus is available, CapOne’s 100k offer is not and hasn’t been for awhile. Also these really don’t trade off as they’re separate banks. And Cap1 pulls from all 3 bureaus, Barclays only from 1..

  11. As mentioned above, why not promote the Citi Thank You cards? Because they don’t offer referral credit?

    They give, assuming you buy plane tickets, 2.66% back on flights which is obviously more than 2.2%. Moreover, with the TY Premier, you get a companion ticket and 15% (more like 8-10%) off flights booked through their system. Those savings more than make up for the $125 fee. Also, it comes as a Mastercard Elite that gives coverage in EVERY country for car rental CDW.

    You normally give a more balanced approach, and I am surprised you have jumped on the wagon in pushing this mediocre (at best) card.

  12. Gary,

    With the banks increasing their minimum spend requirements, and then throwing a little bit of churn in there, I’m finding that the “un-bonused everyday spend” discussion to be a bit academic.

    I’m in the middle of the AmEx Biz Gold $10k/4 months spend. After that is the Club Carlson $2500/3 months spend. If they approve me, the Biz Club Carlson comes next. Once I wrap that up, I’ll be good to go for another round with the AmEx PRG personal card.

    I don’t keep detailed spending journals, but I feel like last year, I spent 9 out of 12 months working on minimum spend. The 3 months I wasn’t, I was piling on the Vanilla Visa gift card thing.

    Like you, I tend to gravitate towards premium cabin international travel.

  13. Hint hint- take a look at the Capital One rewards card. Why nobody ever talks about it is beyond me. Very similar and very very handy for those travel related expenses where you have to stay or fly with or on programs you do not have points.

  14. just an OK card really for miles junkies IMO. Combo of chase cards with amex bcp/us bank cash+ is great for maximizing categories yielding >3% avg cashback, so it’s hard to justify paying another annual fee. From my perspective, priceline cards would be better due to no AF and higher redemption rate for credits towards priceline purchases.

  15. @Dan, I’m with you. If I’m not spending to meet an enrollment bonus, I’m spending in bonused categories or using up gift cards bought at an office supply store. Actual unbonused spend is just such a small factor that the points won’t accumulate fast enough to merit an annual fee. This card might have interest for the signup bonu – depends on what else is out there when I’m ready for my next round of applications – but beyond that it’s just not likely to see much action.

  16. I wasn’t really interested in this card until I realized it could be used for hotels. For someone like me without a lot of disposable income (college student) this is a great deal. I’ll be in Vietnam for 2 weeks where $50 can get you a pretty decent hotel (hot water, AC, wifi, etc). This card essentially gives me ~8 free hotel nights!
    I wonder how AirBnB is coded as travel(it is with Amex). Also, this might not be worth the effort, but what happens if you pay for a hotel, use your points, then cancel the hotel for a refund. Do you get your points back or do you have a credit on your CC?

  17. Gary, re-read your reply to afterbang. You said that “it’s a 2% card not 2.2%” if redeemed for straight cash instead of travel. That’s not true. The miles are only worth 1/2 cent if redeemed for straight cash, so it’s a 1% card in that case, not 2%. As others have pointed out, you really should compare to TYP returns if you consider travel rebates to be equivalent to cash back.

  18. Something else to consider is that sometimes good customer service when you are in a pinch can make up for slightly inferior rewards. I previously had the Travelocity Amex through Barclays, and even though the rewards were actually very lucrative in a cash back sense, the customer service from Barclays was so bad I ended up cancelling the card FOR THAT REASON ALONE.

  19. $45,000? Don’t you mean $4,500?

    $4,500 spending = 9,000 points = $90 in travel points (offsetting the $89 annual fee in the 2nd year).

    Or if you’re just going to redeem for cash back: $9,000 spending

  20. @glen, nope, $45,000 is the correct figure, because he’s not comparing the difference between a 2.2% return on the arrival card and a 0% return on a no-annual-fee card; he’s comparing a 2.2% return to a 2% return on a no-annual-fee card. So the question is how many dollars it takes for the incremental gain of .2% (.002) to make up for the $89 annual fee, and the answer is about $45,000.

  21. Gary, the current landing page for the priceline card shows an additional 5000 bonus pts with $1000 spend in 3months. However, it only earns 1pt per $1 on every purchase vs 2pts. I’m wondering if theres a way to take advantage of the better signup offer of $100 cashback + 2% cashback on everything else.

  22. @HikerT – he didn’t answer my questions at all.. how are straight cash redemptions made? I’ve read the 1/2 cent per ‘mile’ for pure cashback several times now.. if that is the case, this post is extremely misleading, bordering on spreading misinformation in the name of signup referrals.

  23. When comparing a card that gives cash back for certain categories of purchases to a straight cash back card, the analysis is simple: How much spend do I expect in the special category? If someone offered you $100 cash or $125 toward any food you want next year, you’d be irrational to take the cash unless you’re one of the few people who doesn’t buy food. Most buy at least $125 in food, and taking the cash back for food puts $125 in your pocket. (Interest is so negligible right now it’s an extremely minor part of the equation.) If, however, someone offered you $5000 or $5500 next month on food, the analysis is different. Most people don’t buy $5500 in food. Maybe you could buy it and resell it and make more than $5k, but probably not. This is the same analysis with these travel cash back cards. If you have the spend, it is, truly 2.2 cents of cash equivalent.

    All that said, the posts on my favorite blogs since this card started apparently paying referrals has been really disappointing, or at least illuminating. I usually stay out of the blogger hate, but it’s pretty clear that the fee is driving the way this card is covered. Maybe it’s not intentional, but I think it’s much harder for Gary and the others to think about these cards critically when they have incentive not to. Hey, they say, 2.2 is better than 2, must be great, ok, I can sleep at night. The problem is that in each of the comments sections on the various bloggers’ posts about this card, someone has brought up flight points and getting 2.66 cents in airfare using city TY. Now, maybe one could note that the annual fee is a little higher, or note that airfare is more limited than travel. (But see paragraph 1 above — are there really that many people who have “travel” but not airfare to get the 2.66 cents?) Get this card for the bonus if $400 is worth a credit hit. Then put nonbonus spend on a TY and learn about flight points and get 2.66 cents after you build up some flight points.

    But the best question is, who has nonbonus spend any more anyway? Between getting 1.20 on an old Ink card (plus threshold bonuses), or getting 1.5 MR by spending 30k on a PRG, or getting 5x club carlson, or getting a free weekend night by spending $10k on a citi card, ad almost infinitum, anyone getting a mere 1:1 bonus on any dollar of spend is wasting that spend.

  24. We like having various CC’s in our collection. We like nice signup bonuses. We have loads of airline points, hotel points, and other points based cards like CSP, Ink, etc.

    I like spending $1K on each CC and getting $400+pp back in travel credits. $400+ is decent for a TU credit inquiry.

    We were at Target and the cashier gave us a “funny” look when we declined her offer to sign up for their CC because 5% discount wasn’t good enough for a credit inquiry! (Note: One can sign up for the same 5% discount offer using your debit card!!). We also were using a certain CC to meet min spend @Target.

    After reading all the blogs, we have a much different outlook when someone wants to pull a hard credit inquiry!

    Bottom line: This card looks pretty decent with low min spend (the “jungle” works with Barclay’s cards), decent signup bonus and they pull TU, not EXP like alot of our other cards. (for us in Calif, AMEX, Chase, US Bank, B of A & others pulls Experian :))

  25. @ffi why is the fidelity amex better than the priceline visa, they’re effectively the same but the latter gives broader acceptance

  26. Really, Gary? Still no response to 1/2 cent per mile? Those referral commissions must be big, and your morals must be small..

  27. @afterbang – I genuinely don’t know what you are talking about. I have been clear, I think, that the value proposition of this card comes from using the ‘points’ earned to pay for travel, you get 2% cash back on travel plus 10% of the points used for the redemption rebated, which means 2.2% effective rebate. It would be silly to use the points for any other purpose.

  28. @Gary – you compare this card to, and even say it is better than Priceline Visa. Even your post title says King of Cash Back.. this is NOT a cashback card!! It’s a travel rebate card, and not even the king of that. Your response confirms my suspicions. Your post is misleading, deceptive. The kickback on CC referrals has truly clouded your judgement.

  29. As a fan of this blog for some time now (and infrequent commenter) I have to say that this post and the ensuing discussion does bring into question the biases created by referral income to the author from some card issuers and not others.

    I would be happy to make a small donation each year and maybe other readers would be too, if it meant that the author could ditch the referral relationships and instead rely directly upon contributions from readers as a source of motivation to publish unbiased and helpful information about credit card reward programs, thereby getting rid of the conflicts of interest arising from the relationship between publisher and the companies that are the subject matter of the articles.

    Just my 2psi

  30. Fidelity cards are clearly better for everyday spend cash rewards. No annual fee is the clincher. Many of us do not churn and prefer not to have to pay 10 bills every month. Barclays is toast after signup bonus, nobody is going to charge 45k annually on this card when they have other signup bonuses to meet. Not to mention other cards that offer a much better reward for meeting the threshold (like HH Diamond status, BA companion voucher, etc.) Plus who wants to use this card for travel spend when you can often earn 2x-3x miles by using an airline rewards card, and far more than that by using a hotel card (which also bonus rental cars). At best this card – like so many others – is only good for the signup bonus.

  31. If you live in California, Oregon, Washington, or Nevada, and can stand a little hassle, the JCB Marukai card is still better. I use it for almost everything anywhere that takes Discover (except the very occasional place that takes Discover but whose machine won’t read the JCB). If you count in all the bonuses at various spending levels, and spend at least $5000 on it in a year, you get 3% cash back for any category of spending. (Note: the way they calculate this is weird, quantized in increments of $100, so if you’re spending $2000 in a month you get $60 cash back, and $2099 you also get $60 cash back. If you’re spending a significant amount, the rounding doesn’t much matter: $60 cash back from $2099 is still about 2.9%)

    It’s a bit of a hassle, since they still (welcome to the 1980s!) don’t have an online statement or payment option at all. But if you’re pushing over $40k through the card a year (I can pay my rent with it!) that’s an extra $400 a year advantage over a regular 2% cash back card. Plus you get a neat-looking card that nobody has ever heard of.

    Oh, annual fee is $25, waived the first year. AND they don’t have an arbitration clause, so should you ever need to sue them, you actually can. AND they are incorporated in California, not in Delaware or South Dakota, so California’s excellent consumer protection laws actually protect you in case of problems.

    Personally, I have this card, the US Bank Cash+ (for restaurants and occasional big-ticket items (yearly insurance premiums, computer purchases, etc)), the Blue Cash Preferred (for groceries), and a 2% cash back card (for other places where the JCB card isn’t accepted) and I estimate that, over ALL spending that I do in a given year, I earn between 3% and 4% cash back. Not bad for a yearly fee of $100 total.

  32. What does it meant by Foreign Transaction 0% of each transaction “in U.S. dollars.”

    So if an foreign transaction is in foreign currencies, we have a fee???

    sorry newbie

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