April 4th, 2013
Update: This card no longer provides car rental insurance in Israel.
Barclays has improved the bonus on this card from 20K to to 40,000 “miles” after you spend $1,000 within 90 days.
The card gives 2 “miles” for every dollar you spend plus a 10% refund when you redeem miles so that you effectively earn 2.2 “miles” per dollar spent. The 10% refund means that the 40,000 points signup bonus is really 44,000 points as you’ll get 4,000 of those points back after you redeem the points for a cash refund. Of course when you redeem those 4,000 points you’ll also get a 400 point refund, etc. The 10% refund posts within 1-2 weeks of making a redemption.
Miles is a misnomer, really they just mean cents with each mile being worth 1 cent. The way it works is you book travel via any booking site and then you can just go online to your Barclays account and request that the purchase be refunded using your points. You can refund any purchase that is categorized as “Airlines, Travel Agencies & Tour Operators, Hotels, Motels & Resorts, Cruise Lines, Passenger Railways and Car Rental Agencies.”
So if you spend $420 on a plane ticket and have 42,000 from opening the card and spending $1,000 you’ll be able to get a $420 cash refund.
2.2% cash back on all of your spending is excellent, but still I personally prefer real airline miles over bank miles. However this card is probably the best you’ll get for bank miles and can make sense for some depending on what kind of travel you book.
I prefer real airline miles because they allow me to book expensive last minute domestic tickets that can otherwise cost over $1,000 for just 9,000-25,000 miles. I’d have to shell out over 100,000 bank miles for such a ticket.
I also love airline miles because I can take business and first class trips that I could otherwise never afford. Spending $20,000 to fly in a suite is ludicrous but using 110,000 airlines miles is a steal. I’d need some 2 million bank miles to pull off such a trip.
So why would anyone want bank miles?
Say you just want to fly to Israel in coach. You would need roughly 80,000 airline miles for such a trip (though it can be had for as little as 25,000 with fuel surcharges or 50,000 without surcharges). Plus those seats are of course capacity controlled.
If you want to fly nonstop on United to Israel for $900 using the hidden city trick I wrote about last week you can just pay for the flight and use your bank miles to get that ticket refunded. You’ll need 90,000 miles, but as you earn 2 miles per dollar it’s really the equivalent of just 45,000 miles. Plus you’ll get a rebate of 10% of the miles (9,000 in this case) credited back to you in addition to the $900 cash refund.
And of course as you bought the ticket you’ll also earn some 11,000 United miles for the trip itself, which of course you wouldn’t earn if you redeemed an award through United. So you’re really getting a bank mileage refund and an airline mileage refund on your free ticket.
Plus with these miles you’ll have 90 days to earn more points and still cover the price you paid in the past. As opposed to airline miles where you need to have all of the points in hand before redeeming. And you are not limited to just airplane tickets.
As for me, I’d rather use 120,000 United miles and fly in in a bed to Israel. That kind of redemption would cost some 600,000 bank miles. Call me spoiled, but I appreciate the aspirational aspect of real airline miles.
But if you just like to redeem for coach awards purchased with advance notice and don’t want to deal with capacity controls this may very well be the best card for you at 2.2% cash back.
There are no foreign exchange fees. You also get a free subscription to TripIt Pro, a $49 annual value. There is delayed luggage insurance included as well for you to be able to purchase necessities while you’re without your bags.
There is no fee for the first year, but afterward there is an $89 annual fee. You can downgrade the card to a free version after the year is up, though that card only earns 1 mile per dollar spent. Of course you can always ask for a retention bonus or for the fee to waived once the fee comes up.
I may not like the card for everyday use for my purposes, but the signup bonus is very good, especially as Barclays typically pulls from Transunion which is great news for most churners.
If you are denied you can call reconsideration at 866-408-4064.
The no annual fee card also has no foreign transaction fees. It only has a 20,000 point signup bonus though that also will receive a 10% point refund with every redemption.