A Rewards Card That Pays More Than 2% On Every Purchase

Reward

Before more stores switch to giving discounts for using debit, buying with a rewards credit card still lowers the net price.

Outside airline and hotel rewards cards which redeem for a specific airline or hotel chain, very few cards give 2% rewards on every purchase. The short list of cards that are still taking new applications includes Fidelity AmEx and Capital One Venture. That’s about it.

Now comes a card that pays more than 2% on everything. It’s called Barclaycard Arrival Plus™ World Elite MasterCard®. The catch is that to get the best redemption you have to redeem against travel expenses — airlines, hotels, rental car, etc. It’s not a big deal. We have those expenses anyway.

Similar to Capital One Venture, it calls the rewards “miles” but they are really just points redeemable for a statement credit against a travel charge. Every $1 spent earns 2 miles. There is no cap on how much you can earn or any special categories you have to keep track of. 2 miles for $1 spent is on everything, every day.

2,500 miles are good for a $25 statement credit against travel expenses. You don’t have to use any specific airline or hotel. You don’t have to book the travel through any specific travel agency or website. You don’t have to wait until you have enough miles to cover 100% of the travel expense. After you redeem for statement credit against a travel expense, you get 10% of the miles credited back. With the credit-back, a $100 statement credit only costs 9,000 miles, which you earned with $4,500 worth of spending. $100 / $4,500 = 2.22%.

There is a $89 annual fee, which is waived the first year. If you spend $3,000 within 90 days after you open the account, you get 40,000 bonus miles. The 40,000 bonus miles are worth $444. Redeeming 40,000 miles gets $400 statement credit plus 4,000 miles credited back; redeeming 4,000 miles gets another $40 statement credit plus 400 miles credited back, … That $444 worth of statement credit will pay the annual fee for another 5 years.

In addition to the usual rental car insurance, extended warranty, etc. this card also offers no foreign transaction fee, Price Protection, trip cancellation and trip interruption benefits.

2.22% rewards on everything, every day, effectively fee-free for 6 years is the best deal. 6 years down the road there may be something else better. You can get a similar signup bonus from other cards but those don’t give you 2.22% rewards. This one is a keeper.

If you are dead against an annual fee even though the signup bonus covers it for 6 years, there is also a no annual fee version: Barclaycard Arrival™ World MasterCard®, but that one only gives you 2% reward on travel and dining, not on everything. It still works as a good travel card because there’s no foreign transaction fee.

Barclaycard Arrival Plus™ World Elite MasterCard® beats the other 2% rewards cards with 11% more rewards on every purchase. Being a MasterCard it’s also accepted at more places than Fidelity AmEx. To me, the extra 11% in rewards is worth limiting redemption to travel expenses.

[Photo credit: Flickr user Local Play]

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Comments

  1. Jim says

    There is another rewards card that was not mentioned. It’s the Fidelity 529 Rewards MasterCard. It pays 2% back on everything. There is no limit as far as I can tell. There is no annual fee. When it was first offered the rewards could only be transferred to a 529 account at Fidelity. Then it was switched to any Fidelity account. I have mine linked to my brokerage account. When the rewards exceed $50 they are automatically deposited into my brokerage account with no action required on my part. I don’t think they are accepting any new applications however. I use this as my main fall back credit card account. Also use Chase Freedom for the 5% rotating categories, and Chase Business ink for 3% back everyday on gas, home improvement stores, restaurants, and office supply stores. It drives my wife nuts remembering which card to use, but the rewards are well worth it!

  2. Harry says

    The Fidelity 2% MasterCard closed to new applications maybe 10 years ago. Great for those like you who still have it. This Arrival card and its cousin the Priceline Visa are for those who prefer to use one primary card and maybe one other card for gas or groceries. It’s hard to keep track of the special categories. I wonder why only men chase categories even though women usually have a larger wallet/purse.

  3. Me says

    Hi Harry,

    I love your blog. Thanks for all the effort you’ve put in over the years. This has continually been one of the best personal finance sites on the internet.

    In this case, though, it seems you’re engaging in some mental accounting. By all means apply for the card for the $444 bonus (and I’ll probably do so). But once you’ve got the card, the annual fee question is separate from the bonus.

    After enjoying the 2.22% rewards for the first free year, you should determine whether the extra rewards cover the annual fee going forward. Since you already have a 2% rewards card with no fee, the extra 0.22% would require more than 89/.0022 = $40454.54 in annual spending to make this new card worthwhile. Higher, if like me you use the Amex Blue Cash Preferred for 6% cash back at grocery stores. Perhaps you spend enough to exceed the breakeven, but the suggestion to consider the signup bonus as “paying for” the annual fee may lead others to an incorrect conclusion.

  4. Harry says

    It just depends on your appetite for signing up for something you plan to cancel shortly. Suppose you have a garden variety 1% rewards card today and you prefer a card you can use for the long term, as opposed to opening a new card every year just for the bonus and canceling it afterwards. I know people do that but I bet many other people prefer stability. That’s why they have the garden variety 1% rewards card today. Now they have a choice of getting the no annual fee Priceline card, this Arrival card, or say the Chase Sapphire Preferred card that offers a $500 signup bonus with a $95 annual fee waived the first year. The Arrival card is better than the Priceline card because with the bonus you get 6 years of higher rewards, 2.2% vs 2%. The Arrival card is better than the Sapphire Preferred because you get 2x on everything vs 2x on only travel and dining.

    If I’m only going after the bonus, I would wait for the Southwest Airlines Premier card to offer 50,000 points bonus again. That’s worth $800+ toward cheap Southwest flights.

  5. Charlie Edington says

    Hi Harry,

    Thanks for your blog and all the great info. Did something just recently change with the Priceline Visa rewards? I clicked on the link from your website to apply and it’s saying 1 point for each dollar spent instead of 2 points. I couldn’t find any other information on the web about a change in the terms.

    Thanks

  6. Harry says

    Hmm, that’s not good. I found another link that still says 2 points. Just change the number in the link after campaignId from 1821 to 1304 and hit enter. I don’t know if they are running different programs through different channels or this is a sign that the 2 points will soon become 1 point. If it is going to be cut to 1 point, I don’t know if they will grandfather everyone who got in before the change or switch everyone to 1 point. You can bet they will stay with 2 points or grandfather you, or you can just get the Arrival card. Limiting the higher redemption rate to travel means the Arrival card has better staying power than the Priceline card.

  7. Leigh says

    They also have a no fee version that only gives you 2% on travel (airlines, trains, rental cars, travel agencies, and hotels) and dining and then 1% everywhere else. The bonus part for me is that it has no foreign transaction fees, which would make it worth it just as a travel credit card. I wonder how easy it would be to apply for the fee one and then switch to the no-fee one before the annual fee gets charged.

    I’ve been looking for a no foreign transaction fee card and this might be the most useful one that I’ve seen so far, considering that when I travel, airlines, trains, hotels, and dining cover probably 80+% of my travel expenses.

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