Credit card dilemma – Replacing Capital One Aspire Travel World Elite Mastercard

capital one aspire travel world elite mastercard

Long time readers will recall my beef with some personal finance gurus and their advice of using cash and not using credit cards. If you consistently pay off your monthly balance, I believe you should ignore this advice and get a credit card that gives cash back or travel rewards on your everyday spending. Why leave money off the table when you can earn money for continue to do the same things you’ve always done? Some of you may recall that we saved over $10,000 by utilizing credit card rewards to go to Maui for 12 days a few years ago. Some people get pretty obsessed with maximizing reward points by applying for multiple cards every year and taking advantage of the sign up bonuses. While I’m not as obsessed as some, I do try to time credit card applications if we have any big planned expenses coming up.

Using credit cards to maximize rewards 

For the most part, we have been sticking to a two credit card system like below:

  • Capital One Aspire Travel World Mastercard for everyday spending. The card offers 2 reward points per $1 spent on anything (i.e. 2% earning rate) then you can redeem the points on a travel purchase in the last 90 days off your credit card statement.
  • PC Financial World Elite Mastercard for shopping at Superstore. The card offers 3 PC Optimum points per $1 spent at Superstore (i.e. 3% earn rate). 

On the occasions that we stay at a Marriott property, we then use the American Express Bonvoy Personal Card to earn 5 Marriott Bonvoy points for every $1 spent at Marriott Bonvoy properties. I kept the Amex Bonvoy card around for the 15 annual night credit and the free 35k Bonvoy points certificate. I figured these perks are worth the $120 annual fee.

We then have been churning credit cards here and there to get the welcome bonuses. For example, last year earned close to $2,600 via credit card churning by applying and meeting the minimum purchase requirements for American Express Marriott Bonvoy cards, TD Infinite Visa and Scotiabank Passport Visa Infinite.

Although Capital One Aspire Travel World Elite Mastercard has a $120 annual fee, the card provides 10,000 travel reward points every year on the card anniversary (I had the card before they rebranded it to the World Elite Mastercard and Capital One grandfathered the anniversary reward). Since applying for the card close to 10 years ago, we have redeemed over $7,500 worth of travel points. The credit card also has some pretty awesome travel insurance coverages. Thanks to these coverages, we were able to get money on a couple of baggage delays while travelling to Denmark and the flight delay when Lufthansa/Air Canada wanted to fly us from Frankfurt to Vancouver via Beijing

Needless to say, we loved the Capital One Aspire World Mastercard. 

But good things don’t always last forever. A few weeks ago, I received a letter from Capital One stating that as of August 5th, 2020 the card will only pay 1.5 points on every dollar spent. The real kicker is that Capital One decided to eliminate the 10,000 anniversary reward points.

With the old rules of 2% earn rate, the $120 annual fee, and the 10,000 anniversary reward points, the fee is only effective $20 per year, and we’d only need to spend $1,000 before starting earning any net reward points. Under the new rules of 1.5% earn rate, the $120 annual fee, and no anniversary reward points, that means we’d have to spend $8,000 before we start earning any net reward points. Spending an extra $7,000 each year before starting to earn any more points isn’t exactly point savvy to me. As a result, we started looking for a replacement credit card. 

Replacing Capital One Aspire Travel

I’ll be the first one to say the new conditions suck. Fortunately our card renewal isn’t until October, so we have some time to figure out a replacement credit card. Thanks to tracking every expense in a budget spreadsheet since 2011, we have a pretty good idea of our monthly and annual expenditure.

For example, last year we spent a total of $54,906.02 for a family of four with $8,975.28 on groceries, $1,155.84 on recurring bills (phone & internet only. Hydro and natural gas come out of the chequing account directly), $2,000 on gas, $12,000 on travels, and $5,000 on dining out. 

When I started looking for credit cards available for Canadians, I found that some enticing Visa cards like TD Cash Back Visa Infinite Card and Scotia Momentum Visa Infinite Card which offer 3% earn rate and 4% earn rate respectively on groceries. However, when I looked at our grocery shopping trend, I noted that we shop primarily at Costco and Superstore and both stores only accept Mastercard. Therefore, it makes sense to find another Mastercard to replace our Capital One Aspire card.

With that in mind, I narrowed our choices to the following cards below:

  1. Rogers World Elite Mastercard
    • No annual fee
    • 3% on US expenses, 1.5% on everything else
    • $25 sign up bonus
    • Minimum insurance coverages
  2. BMO World Elite Mastercard
    • $150 annual fee. $50 for each supplement card.
    • First year free (for the primary cardholder)
    • 3 BMO points on travels, dining, and entertainment. 2 BMO points on everything else.
    • 40,000 welcome points after spending $3,000 in the first three months
    • Comparable insurance coverages as Capital One
    • 140 BMO points per $1 for redemption 
  3. HSBC World Elite Mastercard
    • $149 annual fee. $50 for each supplement card.
    • First year free (for the primary cardholder)
    • $100 annual travel credit redeemable towards select airline seat upgrades, airline baggage fees and airport lounge passes
    • 3% on travels, 1.5% on everything else
    • No foreign transaction fee
    • 60,000 welcome points after spending $5,000 in the first three months
    • Comparable insurance coverages as Capital One
    • Need to redeem minimum 250,000 points ($125) then 100,000 points increment (i.e. 350,000, 450,000, etc)
  4. BMO Cashback World Elite Mastercard
    • $120 annual fee. 
    • First year free.
    • 10% earn rate for the 1st three months. Max $2,000 spending ($200 reward).
    • 1.5% earn rate after
    • Comparable insurance coverage as Capital One
    • Redeem cash-back minimum of $50 to statement credit

Rewards Credit Card Comparison

I then ran calculations with the assumption that we’d charge $40,000 a year on the credit card with $7,000 categorized as travel, $3,000 as dining out, and $30,000 as the remainder (I’m being conservative with our travel and dining out numbers due to COVID-19. Also we can’t charge everything on the credit card). I then assumed that both Mrs. T and I would be holding the card. Based on that, here are what the net rewards (after fees) look like:

CardCapital OneRogers WEBMO WEHSBC WEBMO Cashback
1st Year$480$625$1028.57$964$770
Other years$480$300$442.86$606$480
Total after 5 years$1,920$1,525$2,357.14$2,782$2,210
Total after 5 years if no supplement card$1,920$1,525$2,607.17$3,032$2,210

Rewards Credit Card Comparison Analysis

  • If we just look at first year net rewards, the BMO World Elite Mastercard came out ahead. But BMO devalued the redemption and earn rates in 2018, so I’m a bit weary that they may devalue these rates again.
  • The HSBC World Elite Mastercard seems to be the best card if we hold onto the card for five years. This card does have a tiered redemption system, which is not ideal. However, Capital One had a similar tiered redemption system until 2015 and I didn’t mind it (the current redemption system is way better. I can redeem as little as $1).
  • The BMO World Elite Mastercard also includes four lounge passes each year which I did not put as a vlue in my calculation ($27 USD per pass). These passes can be used once we can fly internationally again.
  • The BMO Cashback World Elite Mastercard statement credit redemption seems very straight forward. While the net earn rate isn’t the best, the ease of redemption is appealing.
  • We can increase the potential earn rate if we don’t apply for a supplement card. This would require some spending strategies where we charge expenses to my card as much as possible.

After all the calculations and going through the fine prints of each credit card, I am currently leaning toward replacing our Capital One Aspire Travel World Card with the HSBC World Elite Mastercard. The $100 annual travel credit is nice, and I am certain we would be able to use the credit each year. However, I’m slightly intrigued by the BMO World Elite Mastercard (due to the four annual lounge passes) and the BMO Cashback World Elite Mastercard (cash back so can redeem whenever we meet the minimum redemption requirement). Fortunately since our Capital One annual fee isn’t due until October, we still have a bit of time to finalize our evaluation and decide on a card. 

Dear readers, which card would you pick if you were in our situation?

Written by Tawcan
Hi I’m Bob from Vancouver Canada, I am working toward joyful life and financial independence through frugal living, dividend investing, passive income generation, life balance, and self-improvement. This blog is my way to chronicle my journey and share my stories and thoughts along the way. Stay in touch on Facebook and Twitter. Or sign up via Newsletter