CapitalOne Go Miles Card and the Hilton American Express

A colleague asked me today about the CapitalOne Go Miles Card. He said

    From what I got in the mail it seems you get 20,000 bonus miles and can use the points for a bunch of airlines, and there is no annual fee. I’m wondering what the catch is.

Smart fellow, assuming there was a catch, it’s that the miles are in CapitalOne’s own own proprietary program (they aren’t really “miles” as normally understood).

  • You can’t actually transfer points earned with this card to other airlines. Instead you use the ‘points’ towards a ticket they purchase for you.

  • The value of that ticket is capped and requires advance purchase. This flips the frequent flyer mile proposition on its head — miles are best used for expensive tickets like last-minute transcon flights (at least) or international business or first class travel, rather than cheap advanced purchase domestic coach flights that can be generally had for a few hundred dollars anyway.

  • You can only earn points from one source — credit card spending — rather than combining from several sources like you can with frequent flyer miles (e.g. flights, credit cards, hotels, rental cars, online surveys, whatnot)

The benefit of a card like this is that you don’t have to deal with capacity controls. If you follow the rules, redemption is easy. The downside is that earning is limited and the value of redemption is limited.

The best way to think about the CapitalOne card (and any other credit card company proprietary mileage program) is that it’s a cash rebate card where you’re restricted in the way that you can use the rebate. You may be better off going for a real cash rebate card instead.

If your real desire is flexibility, consider that (a) redemptions can be made easier if you outsource them to a company like AwardPlanner and (b) there are traditional programs you can earn points in that really do provide flexibility without sacrificing value.

My favorite one of these is Starwood. The Starwood American Express earns one point per dollar spent, and Starwood lets you redeem those points for hotel stays without capacity controls (if there’s a standard room available, you get it) or transfer the points to most airline programs. You get to choose whose miles you want later, and you can use the card to top off various accounts. Moreover, if you transfer 20,000 points you get 5000 bonus miles – so in most of those cases you’re really earning 1.25 miles per dollar rather than just 1. And the card (free the first year, $30 thereafter) is even cheaper than most airline cards.

Some have argued that recent changes to the Hilton American Express make it a better general use card than the Starwood card. It has no annual fee, and instead of the usual 3 Hilton points per dollar spent it earns 5 Hilton points on purchases at supermarkets, drugstores, gas stations, dining establishments, the U.S. Postal Service, and for wireless phone bills.

The changes to the Hilton American Express are indeed intruiging. They’ve even included Gold elite status if you spend $25,000 in a calendar year. (Though readers of this blog are all already Gold.)

By the way I’d love to see Diamond offered for $100,000 in spend, I’d put that on the card in a second. I’d also love to see Starwood offer Platinum for $100,000 in spend on the card as well. That may seem far-fetched, but credit card spending is as important as product loyalty to many of these programs, and I do think this will be a future trend. Furthermore, since Starwood is apparently offering Platinum status to top-tier elites at Delta, the level doesn’t seem quite as vaulted and rare as it once might have. (Not to mention that it’s a published benefit of simply holding an American Express Centurion card, though that comes with a hefty $2500 annual fee.)

Even at 5 Hilton HHonors points per dollar spent, the Starwood card is still a better card for earning frequent flyer points than the Hilton one, even if a majority of your spending is on things like groceries and dinner out just based on conversion ratios.

If you’re simply comparing earning for hotel night awards, and you leave aside ease of redemption and quality of properties (we all have different tastes!) then the Hilton card wins on those spending items where American Express is offering 5 points per dollar.

But that strikes me as a pretty limited case, and certainly doesn’t describe my situation — I value the ease of redemption (no capacity controls, unlike Hilton) and the specific properties that Starwood offers. Frankly I don’t want too many hundreds of thousands of Hilton points, as you can only go to Hawaii so many times.

I do have both cards, and I have changed my spending patterns slightly. I put my cell phone bill on the Hilton Amex (I used to put it on Diners Club) and I put grocery bills on the Hilton card as well. But it hasn’t come close to supplanting my Starwood Amex as my “favorite card in the wallet.”

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, 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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