Capital One uses a simple formula to calculate the cash value of miles: Divide by 100. In other words, 50,000 miles equals $500; 100,000 miles is $1,000. According to CBS MoneyWatch, the promotion runs until May 13th or until the company gives away a billion miles.This is a terrific example of how issuers are aggressively courting new customers, a trend most analysts pronounced dead after the credit crisis hit. "I definitely think all the talk of demise of aggressive reward programs in light of new Congressional regulation was overblown," says Doug Miller, senior analyst for banking and cards at financial market research firm Corporate Insight. "I don't want to say they cried wolf, but it seemed like that at the time, they were making a bigger deal out of it than it would actually be," Miller tells WalletPop. "If you want new clients you still need to be aggressive."
Miller explains how issuers can afford to dole out the the lavish perks: Card companies are cutting back or outright eliminating 0% balance transfer offers, and they're raising the initial APR rates, even for customers with excellent credit. In addition, cards with annual fees (like the Venture) tend to be marketed more aggressively, Miller says. "Issuers will be more aggressive and offer more perks for cards that carry an annual fee."
The Venture card offer also reflects a shift away from single-airline cards toward generic travel -reward cards that give the user flexibility to travel on any airline. For customers that only fly on a single airline, Miller says traditional frequent-flier cards, which let you earn miles that can be cashed in for a future trip, offer value. On the other hand, "A card like the Venture is good if you mix and match airlines," he tells WalletPop. "If you want to go for simplicity and ease, the self-branded cards can't be beat," Miller says. "That's going to be the most transparent."
The other thing for consumers to keep in mind is to be sure and read the fine print and make sure you understand all the details of a card offer before you sign up for it, Miller says. In the case of the Venture card offer, there are three caveats: You need to charge $1,000 on the card within the first three months, you have to have what Capital One terms "excellent" credit, and the card comes with a $59 annual fee, although that's waived for the first year.