Check out this new travel rewards credit card

Meet what could very well be the best new premium travel rewards credit card in Canada.

The Capital One Aspire World MasterCard makes its debut June 8, but details have been made available early to help generate some advance word. If you're looking for a travel rewards credit card, don't make a move until you check out this new player.

A Personal Finance column last month looked at the unprecedented number and appeal of deals that card issuers are using to lure new clients (read it here: http://tgam.ca/OIC). The sign-up bonus of the Capital One Aspire World MasterCard will beat all other offers, and its points-earning power and other features rank well, too.

"It's a really good card," said Patrick Sojka, who recently gave Capital One Aspire World an enthusiastic review on his Rewards Canada website (rewardscanada.ca). "It's going to make all the other guys take a look at what they're offering and see what they can change."

To start with, Capital One Aspire World offers a welcome bonus of 35,000 points and another 10,000 on your first anniversary. Capital One provides two reward points for every dollar you spend, and it says that 15,000 points equals $150 you can use against the cost of booking any type of travel. This tells us that the value of the 45,000 total points available to customers is worth $450.

Close competitors among new cards are BMO World Elite MasterCard, offering 15,000 points to new customers with a value of $285 toward reward travel, and ScotiaGold Passport Visa, offering 30,000 bonus points (20,000 up front and the rest after one year) with a value of $300.

Some new research by the analysis firm MarketSense helps explain the deals being thrown around these days by new and existing travel rewards cards. For the past several years, consumers have been reducing the number of credit cards they carry and thus focusing on fewer reward programs. The average number of cards per person last year was 2.4, down from 2.8 in 2006.

Capital One is one of the largest banks in the United States and operates in Canada strictly as a credit card issuer. It started here back in 1996 offering cards to people with low credit ratings and only got into the competitive rewards card market in 2007. The new Aspire World card suggests the bank wants to lead in the category.

"It's a very busy marketplace in terms of rewards cards, so we wanted to do something that differentiated us," said Laurel Ostfield, communications manager at Capital One Canada. "We weren't going to put out a product that was middle of the pack."

Let's use $15,000 in annual card spending to compare the points-earning power of Capital One Aspire World MasterCard to other cards.

With two reward points for every dollar spent on this card, you'd end up with $300 worth of rewards. BMO World Elite comes very close at $285 in rewards for $15,000 in spending, but it has a significant drawback in the form of a $49.85 fee for booking reward travel by phone and $18.95 for online booking. Other travel reward cards top out at $150 to $225 in travel rewards on spending of $15,000 annually.

Arguably, you can find better values in travel reward cards from the likes of RBC Visa Infinite Avion, which gives you a short-haul flight costing up to $350 with $15,000 in spending, and CIBC Aerogold Visa Infinite, which can theoretically get you a short-haul flight of any cost with spending of less than $15,000. (Note: There's a very limited number of these seats available). However, both these cards give you less flexibility to use points for other types of travel.

Capital One Aspire World MasterCard costs $120 per year (uniquely, supplemental cards are free). It also offers a full complement of insurance coverage, including 22 days of travel medical, loss/damage coverage for rental cars and trip cancellation. Other perks include an extension of the warranty on goods bought with the card.

This card scores reasonably well on ease of use. You can book any kind of travel anywhere and then apply your reward points against the cost. However, you can only use points in blocks of 15,000 ($150), 35,000 ($350) or 60,000 ($600). After 60,000 points, the formula is the cost of travel times 100.

No travel rewards card is perfect for everyone, but Capital One Aspire World comes closer than most. That's why it could very well be the best new premium travel rewards card in Canada.

Comparing Credit Cards

The debut next week of the Capital One Aspire World MasterCard will shake up the market for premium travel reward cards because of its many attractive features. Here's how the points earning power of this card compares with the competition.

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