Capital One’s Apples to Orange Comparison Marketing

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Recently I got a credit card offer from Capital One (I’ve started getting those mails again). This time they were telling me that I was pre-approved for their No Hassle Miles Card.

  • 30,000 bonus miles – get 10,000 bonus mils with your first purchase. Then, spend just $3,000 a year and you’ll get 10,000 more bonus miles on your first and second anniversaries as a cardholder
  • Earn 1 mile per dollar on purchases
  • No annual fee

Fine – but what was written on the second page of the mail was more interesting. Basically, Capital One tried to show me what a great card this was by comparing it to some other cards. Here is how the table looked like.

Features/Cards
Capital One No Hassle Miles Rewards
Chase United Mileage Plus Visa Signature card
American Express Platinum Delta Skymiles Credit Card
Citi Platinum Select Aadvantage World MasterCard
Get 30,000 Bonus Miles
YES
Yes
Yes
No
Miles Good On Any Airline
YES
No
No
Yes
Fly Anytime With No Blackout Dates
YES
Yes
Yes
Yes
Free Ticket Worth $150 for every 15,000 miles
YES
Yes
No
No
Redeem Miles for cash
YES
No
Yes
No
Annual Fee
$0
$60
$150
$0 for 12 months, $85 thereafter

To most people who are not familiar with credit cards, the table above makes the No Hassle Miles Card look like a no brainer. But fortunately or unfortunately for Capital, I’m Mr Credit Card and I’m going to tell you why this comparison is simply misleading and it is like comparing Apples and Oranges.

Firstly, Capital One chose to compare them with specific airline credit cards. This is simply wrong. Why should for a United Mileage Plus frequent flier consider the Capital One card over their United Airlines Visa? True, there is an annual fee, but Visa Signature holders earn double miles for every dollar that they spend.

Delta Platinum card holders also earn double miles for every dollar that they spend on the card. Capital One conveniently chose not to disclose this fact. The Citi American Airlines card is probably the worst of the lot because they do not allow you to earn double miles, so that should be highlighted (in fact, I have suggested a better alternative to the American Airlines Credit Card issued by Citibank.

Another misleading fact is that they said that United and Delta’s Miles are no good on any airline. That is simply nonsense. Both airlines are part of the airline alliances and their miles are good for other airlines in the alliances. Delta Skymiles are also good for Northwest Airlines (which they have merged).

The fact that Capital One chose to highlight that you can exchange miles for cash is meaningless. That is because if you do that, your payout will be less than 1%! You should never exchange points for cash in a reward card. If you want to earn cash rebates, get a cash back credit card instead.

The annual fee comparison is misleading as well because as mentioned earlier, most airline cards let you earn double miles. They very often give anniversary bonuses like free companion ticket, access to airport lounges etc. The value of these perks more often than not offset the annual fee.

But if Capital did compare apples with apples, what cards would they compare with? Well, here’s what they should be comparing with.

Features/Cards
Capital One No Hassle Miles Rewards
Discover Miles Card
Citi PremierPass Card – Elite
BOA Accelerated Rewards American Express Card
Bonus Miles
Get 30,000 Bonus Miles – 10,000 each year if you spend $3,000 a year
20,000
20,000 after $600 purchase during first 3 months
n.a
Miles Formula
1 Mile/$1
1 Miles/$1 – Double Miles for food and travel for up to $3,000 in each year
2 Miles/$1 – supermarkets, gas stations, drugstores, commuter transportation and parking merchants
1 Miles/$1 on other purchases
1 Mile For Every Mile Flown on Airline paid by the card
1.25 points/$1
Miles Good On Any Airline
YES
Yes
Yes
Yes
Fly Anytime With No Blackout Dates
YES
Yes
Yes
Yes
Free Ticket Worth $150 for every 15,000 miles
YES
Yes
Yes
Yes
Redeem Miles for cash
YES
Yes
Yes
Yes
Annual Fee
$0
$0
$75
$0

If the proper comparison had been made, then Capital One’s card would look average. I’m not going to go on about which is the better card. But I just wanted to make the point that it can be so deceptive just looking at how they compared their card with other cards which should not have been compared at all.

A card like the No Hassle Miles is suited for those who are perhaps not frequent fliers with any particular airline but would like to earn reward points for airline tickets occasionally. Hence, the comparison should be with similar type of cards.

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One Response to “Capital One’s Apples to Orange Comparison Marketing”

  1. Joseph Bigras Says:

    Is capital 1 a good card ? I have a gold capital 1
    just wondering if this card will ever go up or does it stop a my limit 1500.00 I know the card is not top of the line but I was wondering for my credit point of view do i have a top ranking or middle class for my credit rating
    please reply thanks Joseph Bigras

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