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Your Best Options for Travel Rewards Credit Cards

Aug. 15, 2013
3 mins
An older man walks a woman through some paperwork

Two credit card giants are battling for the right to carry Aeroplan rewards miles, but it’s current cardholders who are left waiting in the wings.

Previously this summer, Aeroplan owner Aimia Inc. announced a new deal with TD, pending the expiry of their current credit card partnership with CIBC this December. It’s a move that would knock CIBC out as the leading provider of Aeroplan rewards - which it has been for decades - and the lender is not stepping back without a fight.

An uncertain future for travel rewards customers

CIBC was given until this past Friday, August 9, to match Aimia’s new deal with TD, which includes paying 15% more per mile and an upfront payment of $100 million to retain the partnership. However, CIBC is calling foul, stating on the deadline that these terms are invalid as Aimia had disregarded their right to first refusal under the current contract.

Currently, the two banks and rewards provider are trying to hash it out - according to a statement released by CIBC, the lender is looking to sell 50% of their Aerogold portfolio, made up mainly of stand-alone credit card consumers, to TD. This would allow the bank to retain customers of multiple CIBC accounts and products, while giving TD the lead as top Aeroplan provider in Canada. A deal must be reached by August 26, though there’s no guarantee that the banks will play nice. Says CIBC, “ In the event an agreement is not reached, CIBC retains its rights to exercise its legal options under the provisions of its existing contract with Aimia.”

Where does this leave current cardholders?

Fortunately, current CIBC Aeroplan consumers don’t risk losing their points should the TD switch occur - but they may be forced to go with a new product to continue earning them. While a suite of travel rewards cards would be rolled out under the new agreement, consumers are left wondering if their current rewards earning potential and fee structure will be honoured by their new lender. It’s a bait and switch that is sure to leave many consumers frustrated, as the big banks hash out the legalities. Fortunately, with so many fantastic travel rewards credit cards options available on today’s market, there’s no need for consumers to wait around for the verdict.

Penelope’s Pick: the Capital One Aspire Travel World MasterCard provides flexibility and fast earnings

The best travel rewards credit cards offer a quick earning structure with rewards that go the distance on redemption. One of the favourites is the Capital One Aspire Travel™ World MasterCard®.

This card packs luxe travel features and perks, as well as reward points on every dollar you spend. This card’s popularity is partly due to the instant perks it provides; Capital One sweetens the deal right away with 35,000 bonus signup miles with the first purchase made on the card, and follows that up with an additional 10,000 anniversary points.

Daily earning is a snap with two miles earned on the dollar for all purchases, which never expire, and the card’s interest rate is competitive with other market options, at Prime + 16.8 per cent. There’s also no airline restrictions or pesky blackouts to deal with; flyers simply use their points to book anywhere they want, at any time, and apply their points directly to purchases made with the card. Consumers earn $150 worth of flight time for every 15,000 points cashed. Not looking to fly anytime soon? Another great card feature is its redemption flexibility. Not only can you convert miles to cash back at a rate of $75 per 10,000 miles, but miles can also be used to decrease an overall credit card balance, in addition to merchandise and gift cards.

Explore your no-fee options

While the above card does come saddled with a $120 annual fee, Capital One also provides a fantastic no-fee counterpart in the Capital One Aspire Travel™ Platinum MasterCard®. This card offers 5,000 bonus points on sign up, and will earn an additional 25% of points on your card’s anniversary.  You’ll earn one point on the dollar on all of your everyday purchases, and the card comes with the same competitive interest rates.

Note: The interest rates, fees, rewards details, benefits and other details of the Capital One product(s) described in the article may have changed since the time of publication. Please consult the product information pages on the Capital One website for accurate product details. In the event of any conflict between the product details in this article and the Capital One website, the details on the Capital One website shall prevail.

Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

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