Only 24% of you are satisfied with credit card rewards — here’s how to be happier

Capital One recently released a survey of consumer satisfaction with mile credit card rewards heading into the summer travel season. The results don’t look great, but are not surprising given the complex nature of mile rewards and lack of good information to help you sort through the options. Some of the findings…

• 43% of people redeemed rewards in the last 3 months, but only 24% are completely satisfied with their current program (read: they probably ended up paying double the miles to get the dates they wanted).
• Blackout dates (26%) and the inability to book a last minute trip (24%) were the top reasons for dissatisfaction. Few programs have explicit blackout dates anymore, but we interpret this as dissatisfaction with airline mile rewards that require double the points during peak period.
• Despite the griping, 61% of users like the ‘free money’ miles and rewards provide, and 33% like the everyday savings
• The most popular redemptions are hotels (55%), airline tickets (48%), and gas (42%). We’re a little suprised by this, as so few folks have hotel credit cards. This leads us to believe they are using generic travel rebate cards like the Capital One Venture or Citi ThankYou for hotel nights, which is actually not a great use of points. You can get easy availability and much better value with a card that earns hotel points like the Starwood American Express, our choice for Best Overall Mile Credit Card.
• 36% want to use miles for a summer trip abroad, with Rome, Italy the most popular destination.

Consider a hotel credit card to increase satisfaction

The findings tell us people like hotel rewards, but don’t seem to be doing them with native hotel point programs. The often overlooked Starwood Preferred Guest program (includes Westin, W, Sheraton, Le Meridien, St. Regis, Aloft hotels worldwide) lets you book hotel rooms for points at over 1,000 hotels worldwide. There are no capacity restrictions — if a standard room is availabe for sale, you can book it for points.

For example, in Rome during the peak summer season 20,000 points will get you a room at the Westin currently being sold for over $450, or the luxuruious St. Regis which currently runs over $700 per night. That’s a return of over 2.5% on your points…and a better value than using the 60,000 miles it requires for a flight to Europe for $1,000 of airfare (less than 2% return). Or, if you travel during less busy periods Starwood’s unique ‘Cash and Points’ rewards can often yield returns of 5% or more on your points.

The Chase Sapphire Preferred also has hotel options — letting you transfer points one for one into Hyatt, Marriott, and Priority Club (Holiday Inn, Crowne Plaza, Intercontinental) points. Hyatt and Priority Club have decent values for your points; Marriott less so as it’s geared for folks who earn points by staying at their properties — its point requirements for free nights are higher. The current 50,000 point bonus on the Chase Sapphire Preferred can earn you 5 nights or more at many Hyatt properties.

However, if you want a staight 2% return on spending and rewards — including free hotel nights, the Capital One Venture Rewards credit card offers you that and nothing more. A fair deal for people who don’t want to do any additional legwork to get a better return.

So in sum, think about these benefits of hotel rewards…

• Few/no capacity restrictions – and no ‘double points required’ rewards.
• No change fees — you can rebook as many times as you’d like with no penalty — most hotels only require 24 hours’ notice of cancellation.
• Mix and match point and paid nights as you like — pay for one night with points…book another at the paid rate. It’s your choice.
• The entire family can benefit with just one room. Think about the hassle of trying to find seats for four on a single flight.
• Lower annual fees. Hotel rewards cards like the Starwood American Express have annual fees of $65 or less in some cases, versus $90 or more for standard airline mile cards.

Once you start learning to use hotel rewards you’ll find yourself wondering why you bothered with the hassle of airline miles or settling for a 1% return on your points in the first place.