Can Capital One really “erase” my debts? And while you’re at it, could you do another rant about loyalty programs?

By | November 21st, 2013

When Capital One offers to “erase” part of her debts with award points, Kate Morrical calls on a loyalty program skeptic to clear things up. Find out what happens next.

Question: You’ve gone on record plenty of times with your feelings about loyalty programs, so I wondered if you’d seen this ad for Capital One’s “Purchase Eraser.” In it, Alec Baldwin implies that he can “erase” a $700 purchase with 30,000 miles.

But the program overview clearly states that any purchase over $600 is 100 miles per dollar to redeem.

If Alec is right, I’d love to know how I could get that deal, too. But I bet the ad is stretching the truth. What’s the best place to take complaints about these kinds of “truth in advertising” errors? — Kate Morrical, Washington

Answer: You’re asking me? Isn’t that a little bit like questioning an atheist about God?

All kidding aside, I actually like Capital One — no, not because of the Baldwin ads, or even its “double miles” cards. I’ve recommended Capital One for years because it has no foreign transaction fee, which is great for international travelers.

But I digress.

Full disclosure: I’m an unwilling participant in a credit card that’s similar to Capital One’s, which allows you to earn points that can be redeemed through your bank. My financial institution converted my otherwise acceptable credit card into a point-earning machine a few years ago, much to my dismay.

These cards offer many more choices than those co-branded affinity cards which tie you down to a particular airline or hotel. In other words, you’re less likely to turn into a blindly brand-loyal mileage nut as the result of using one. Instead, you earn points based on how much you spend with the card, and redemptions are not restricted to an airline or its partners.

Related story:   Are loyalty programs worth "nothing"?

No question, a card like Capital One is the lesser of the two evils.

But it’s still kinda evil.

I’m deeply unhappy that my credit card suddenly started spitting out points. I didn’t sign up for that and didn’t want it. I don’t actively monitor the number of points in my account and they can expire and go to hell for all I care. I use the card a lot less than before, because I view points as a completely toxic byproduct of the credit card industry.

Whatever happened to offering a solid credit card with useful features, instead of a gimmicky payment option that appeals to your worst hoarding instincts? When did that end?

I’ll say it again: Loyalty programs are another bubble that’s about to burst. Airlines this year will earne almost $10 billion from selling miles, a little less than two-thirds of their total ancillary revenue for the typical legacy carrier. A good portion of those miles will probably go unredeemed.

These barely legal point schemes are bad for consumers and ought to be banned by law.

By the way, if you’ve ever wondered why you never see any of those enormous display ads for credit cards under every post on my site, now you know. Point-generating cards have deceived and misled an entire generation of travelers. I’d sooner shill for a discount airline than write an advertorial blog in order to sell those ridiculously lucrative referrals.

Oh wow, where’d that come from? I seem to have forgotten to answer your question.

Sorry about that.

I can see how you’d be confused by the Purchase Eraser offer. The promotional language is light on details and heavy on hyperbole, as are most offers like this. You have to do a deep dive into the fine print and a little homework to get the answer.

Related story:   Why you should never, ever, ever give up

I suggested you send a brief, polite email to Capital One with your question. It responded with a form acknowledgment, but didn’t clear up the matter to your satisfaction. Next, you sent an email to Capital One’s media relations team, but they didn’t answer.

Finally, you emailed Capital One’s CEO. That elicited a response from someone in the company’s executive office, who phoned you to explain the ad.

“It turns out that if you look very closely at the phone in the ads, it shows a starting account balance of 100,000 miles,” you told me. “70,000 miles are then subtracted to redeem the $700 purchase (although the 70,000 figure is never actually shown), leaving 30,000 miles left over.”

Put differently, those ticking numbers in the ad are counting down the remaining balance, not counting up the miles used.

While Capital One wasn’t being dishonest, I’m skeptical of any offer that needs to be explained to consumers. A feature like Purchase Eraser should say what it does and do what it says, not leave you with a false impression.

That said, an offer like this is easier to grasp than some of those offered by airline and hotel loyalty programs, so I can’t be too critical.

Was Capital One's offer misleading?

View Results

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  • Carver Clark Farrow

    When I tried to view the ad it stated it was private

  • $16635417

    Clark, it worked for me. I guess you aren’t part of the secret club? ;)

  • TonyA_says

    Ah, who is the good looking gal with the high kick?
    She’s more interesting than Alec or Capital One.

  • True, true. Carver, I replaced the video so it should work for you now.

    Now, where’s my coffee? I think I’m going to watch that video again.

  • backprop

    barely legal point schemes”

    I think you just gave them a new advertising hook.

  • sirwired

    I agree that the ad is misleading. The starting point balance is small, low-contrast, and not visible for very long (I had to watch that part of the ad three times to read it.) And the final balance should have said “miles remaining.”

  • TonyA_says

    Drink tons of coffee since you only have 3 seconds (frames from 15 – 18 secs) to view the computation. :(

  • omgstfualready

    Love the title, at least I knew what I was going to read about (and please ask an atheist @ god, we welcome educated discussions!).

    Need to rewatch the ad but that seems extremely misleading, and I usually give a whole lot ‘o leeway on these things!

    I use my AMEX Blue for everything I can domestically and Cap One overseas but…….I cannot get Cap One to give me a card with a chip, I’m getting concerned about that. Does anyone else have the same issue with them for non u.s. Travel?

  • omgstfualready

    Got the video working, wow, that’s a big mistake. I saw the 30,000 and rewatched it carefully to see the starting 100,000. Who’d watch a commercial with that much focus???

  • Tommy Fallows

    Lots of things at Capital One are misleading. They sent me an invitation for something Travel World MasterCard, but neglected at the time to separate by font or R/TM between the Travel and the World, implying that this was affiliated with or endorsed by the Travel World Radio Show. When I contacted the radio people, they said that Capital One, a multi-billion dollar corporation whose lawyers and ad agency should have known better to begin with, basically told them to pee up a tree and play in the steam, wouldn’t pay them even a token amount (i.e. the amount the CEO spends on limos in a year), and just re-wrote their ad copy which should have been done in the first place

  • SoBeSparky

    Contrary to the rant, “Whatever happened to offering a solid credit card with useful features, instead of a gimmicky payment option that appeals to your worst hoarding instincts? When did that end?,” you can still easily get plain jane credit cards which give you cash back. Plain old cash, if you choose to use the card. What could be simpler?

  • Fishplate

    Note how “100,000” is in tiny type, while it expands 100% to show “30,000”

    Of course it’s deceptive. it’s advertising.

  • Fishplate

    I have a rewards card. It’s from Capital One (I got it because of the lack of foreign transaction fee). Doesn’t cost me a dime to use it, and every time I get $50 in points, they are automagically used to pay down my monthly balance. Nothing to count, nothing to keep track of, and I don’t pay any more than if I was using cash.

    Couldn’t be easier. I love it.

  • We gave up on Capital One many years ago. We always try to pay off the card before the “free” (i.e., no interest) period expires. Capital One consistently sent their bill so that it was impossible to receive it, open it, immediately write a check and mmail it and have it credited on time (this was before on-line payment). They truly sick.

    You on the other hand – did you really go off on the bank card that started awarding you points with no other changes? What, exactly, was the downside?

  • Smart move.

    Look, if I want to be an indentured servant to an airline, I’ll join a frequent flier program. If I want brownie points, I’ll join the Girl Scouts.

    Never asked for credit card points. Never wanted ’em.

    And consider this: Who is paying for those points? Yep, that’s right, you are.

    I refuse to play the game.

  • Did your interest rate go up? Credit limit go down? How exactly are you paying for *those* points (I’m not speaking about loyalty points here).

    My bank just offered to turn my card into a “cash back” card (1, 2 or 3% on certain classes of purchases). No change to my rate or terms. I think those cards are dumb too, but it’s not costing me anything…

  • Credit card companies are very clever. They pay for these point benefits by raising interest rates, eliminating benefits or adding fees. Mine has done all of the above in the last few years. No such thing as “free.”

  • You didn’t mention that in the article, though. Had you shown that correlation then I wouldn’t have jumped on you…

  • Blake Fleetwood

    I like Alec,,,, he gives away the $15 million he gets from capital one to charity and the arits…
    He has done wonders for the East Hampton Library and Guild Hall Theatre, and various art exhits in Long Island… Wish that other celebreties were so generous.

    Blake Fleetwood

  • I pay the card off each month, so no interest. Never have a card with an annual fee. And never use benefits (except the cash back and no foreign transaction fees). So really, no “direct” costs that I can see.

    Indirect costs..I’m sure we all pay. They are going to make their money somehow….

  • Zod

    That is a very misleading ad. And I suspect it is purposely so!

  • I wonder if the “app” actually shows it just like in the commercial?

  • DReinig

    I have had a Capital One Rewards card for year and love it. I always use the purchase eraser to redeem my points for flights. It allows me to book my own flights (no need to worry about what dates are blacked out) and once the purchase is posted on my account online, I immediately apply for the purchase eraser, which posts the credit within a day or two. I have used other reward credit cards for flights and find Capital One’s card by far the best and easiest to use

  • Nicely done! I’m on cup #4. I’m cutting myself off. It’s the busy Thanksgiving travel season, and my inbox overfloweth. You wouldn’t believe some of these requests …

  • emanon256

    Oh wow is that ad misleading!!! It really looks like they are using 30,000 miles to erase $700. That is really deceptive!!! I am glad I don’t watch commercials anymore. Or much TV at all for that matter.

    All of the credit card reviews I read, always list Capital One as one of the worst cards. I’ve never really dug into why.

    I try to use only credit cards that benefit me. I have my Marriott card with a $60 a year fee, it comes with one night stay a year (CE, I am so tempted to say free stay). I go a a certain event every year that’s always by the same Marriott, no other hotels within a few miles, I always go for one night, and its normally $200 a night. So every year I equate it to staying there for $60, a 70% discount. If the hotel ever reflags, I will cancel the card. As a benefit, the card has no foreign transaction fees. I use a certain point card for everything else, and can apply points to my credit card or receive a check at 1 point per cent. It earns one point per dollar on most purchases, and 5 points per dollar on others. It also offers free primary rental car insurance. Best of all no fees. I spend the way I would spend anyway, and everyone in a while get a check. If something better comes along, I have no problem canceling and/or switching.

  • emanon256

    I never knew that, that is awesome!

  • Yep, that’s true. I like Alec, too. Here’s the story.

  • bodega3

    I have the same card. It also doesn’t have foreign transaction fees with mine. No complaints on my end with using it!

  • bodega3

    Yes, if you are a smart consumer, pay your bill on time and stay within your limit, these cards can work for you, not you for them.

  • bodega3

    We have used our Capital One card in Europe with no problem. We have not used it at gas stations where I have heard not having a chip is a problem at the pump.

  • emanon256

    I once signed up for a Sears Master Card to get $300 off an appliance. The postmark on my first bill was 5 days before the payment was due, and I received it two days before. I mailed my check the same day at the post office and it was received 1 day late. This was also before on-line payments. I called and they refused to waive the late fee and interest stating it was my responsibility to pay regardless of whether or not I received the bill on time. This was my first ever bill from them, I had no idea where to send the payment or what the due date was before receiving it, and this was before I even received the card in the mail so I couldn’t even call them. I still hold a grudge against Sears.

  • TonyA_says

    You have three kids to train :)
    Nah, give them some normalcy.

  • Used my non-chip AMEX card at gas pumps in Holland & Germany just last month with no problems. Paring garages, on the other hand, were a no-go!

  • bodega3

    Good to hear!

  • bodega3

    BTW, Capital One has several card types and this commercial is for their Venture One card. We have several credit cards that accrue mileage but we went with cash back on our Capital One card. As of this month, they are raising the amount of cash back we can earn. And we don’t pay any fees for the card, so for us, so far, this has been a great card to have!

  • Barfeld

    Okay. Here’s the fact. My CapitalOne card gives me “double miles” on everything I buy, and then it gives me a statement credit against travel purchases on a one-cent-per-point basis. This amounts to a 2% rebate on everything I buy using the card–which is just about everything.

    You all can quibble about the ad, but that’s a fact.


  • Barfeld

    May I add this: Ignoring the points and letting them “expire and go to hell” (as Chris says) is like tossing $100 bills out the car window at 70 mph.

    Maybe it’s just me, but throwing away something that has real cash value doesn’t seem smart.

  • Joe_D_Messina

    We used to have a card like that, too. You literally had to make out the check the day you got their bill and get it shoved in the mail the next morning to assure the payment wouldn’t be late. And it wasn’t just the bill being late one time, that was the schedule they were on. Dumped them as quickly as we could.

  • bodega3

    I am not paying for those points. Those who are lousy consumers and don’t pay their credit card off each month probably are.

  • bodega3

    If you are a smart consumer, these cards can be used to benefit your needs. But, you need to pay attention to the details BEFORE getting the card. It is all available on line to read.

  • I would agree, but that’s not the point of my critique.

    In a sane world we wouldn’t need to study the fine print to avoid paying more fees, penalties and higher interest rates. The card would be easy to use and there’d be no surprises.

    In other words, we shouldn’t have to be smart.

  • Carver Clark Farrow

    I’ve dealt with Capitol One on behalf of an identity theft client. That piddly $1500 took a solid year to fix. By contrast, other banks with losses of far greater were much easier to deal with. They called my client a liar and they were a pain in the *** to deal with. No thanks.

  • Joe_D_Messina

    Kudos on his charitable acts. Too bad his family must wish his charity started at home. He seems like a guy who is wonderful just as long as you’re on his good side, but watch out if that ever changes.

  • bodega3

    What I don’t understand Chris, is where is the responsibility of the applicant for a credit card? Having applied for several cards recently and being accepted to get them, I read everything I could online that applied to the credit card and printed it out for future reference. I had the choice to go for those cards or not go for those cards. But if I applied, I was the one who needed to be sure I knew what I was getting myself into. I have researched the Venture Card and it didn’t meet our needs, but I read the ‘fine print’ to figure it out.
    If you can’t do the homework, then you shouldn’t get a card. Is being a good consumer anything new?

  • bodega3

    Try dealing with Macy’s AX side of things. You are not dealing with AX as this is just a branded card. Having had fraud issues with past cards that got taken care of swiftly, I had better expectations and shouldn’t have. We won’t use the AX side of this card again!

  • Mark Carrara

    I understand your dislike (hate?) of loyalty cards. I even agree with most of what you say. I just don’t understand what is wrong with bank cards that give points? We have both a bank and a capital one card. before we signed up I checked interest rates, fees and terms. Both cards were better than other cards so how is this costing me?

  • mszabo

    I’d disagree it’s the poor sucker who is paying in cash who is paying for those points. I’m just getting some of that credit card fee back in my pocket. Very rarely do I see a place where prices are cheaper for cash payment, and if I do I will pay in cash. Most merchants have already raised their price to account for the 2-3% transaction fee. So if you pay in cash your still paying that fee. My using a cashback card gives me 1.5% of that cost. I’d prefer no fees at all but that seems unlikely to happen.

  • I’d love to be a fly on the wall when bank execs decide to start offering one of these points-spewing cards. (By the way, I don’t hate loyalty programs — I do hate the way they work.)

    Someone will pay for the points. But who? The guy who gets stuck with a late fee, whose interest rate is now 20 percent? The person who feels compelled to spend more in order to earn more points? Or maybe the uncritical consumers who pay the annual fee without question.

    The answer is: all of the above, probably. But definitely not the bank.

    Why are we so reluctant to acknowledge that we are paying for this nonsense? Is it because we really want to believe there’s such a thing as a free lunch, or a free credit card?

    It’s like Vegas, baby. The house always wins.

  • SoBeSparky

    Yes, if you pay when you get your bill, and have a “no annual fee” card, then what is the cost for the convenience of not having to carry cash, or worse yet, a debit card which offers none of the consumer protections against lemon merchandise and unscrupulous merchants?

    There are two sides to this coin. Without a credit card, try getting your money back on a purchase of a defective merchandise or service away from home. Fat chance.

    Better yet, buy some merchandise locally and make a deposit. Then the custom product arrives and the merchant simply didn’t listen to the specifications. The product is unsatisfactory in more ways than one, and the merchant plays the “golden rule.” He got the gold and you got nothing. Debit card (pin activated), check and cash payments usually require you to go to court to get the money back when the merchant balks at any refund. Only when it has been charged on a credit card do the federal consumer protections kick in.

    So which would you rather do, visit the local small claims court, or call your credit card company and ask for a charge-back?

  • Charles

    I’m currently juggling several cards that offer rewards. One gives me 5% off my phone bill, one is 5% on gas and groceries, one is 2% on, and two are 1% most of the time and 5% in some categories every three months. Depending on what deal is active, we usually get about $50 a month in rewards, either in cash, gift cards, or applied to a purchase. I don’t care what the interest rate is, we’ve never paid any interest. None of these cards have any fee at all. I have another card from our local credit union that is a basic card; no fees, low interest we never pay, and no rewards Why should I use it? Don’t tell me those other cards are costing me, because the purchases are the same cost with those cards or the one with no reward. So, how are those rewards costing me anything other than a bit of time to keep track of them?

  • bodega3

    The house wins if you pay their fees. 25 percent interest on a credit card? There are those who run a monthly tab and pay the minimum, so yes, they pay for many of us to enjoy these cards at no extra cost. If more people paid off their card in full each month, I have no doubt some of the benefits many of us enjoy would be gone. But if you know how to handle your financials properly, affinity cards are a good deal.

  • omgstfualready

    In Ireland it was getting harder to not have a chip, I find myself bringing more and more cash. It’s so odd that Cap One won’t issue it when they are the best international card out there and they know it. Ah, there it is……nevermind….

  • Grant Ritchie

    I’m not sure about your “No such thing as free” statement. I’ve had an “American Express Platinum Cash Rebate” card from Costco since 2000, and I funnel virtually all of my payments (Kaiser, Amazon, auto registration, taxes, grocery store, department store, restaurant, gasoline, gas, water, sewer, and electric bills, and undoubtedly a few I’ve forgotten) through that card. I get hundreds of dollars cash back every year — several thousand since I started using it. Granted, I pay an annual Costco membership fee of $100, but I’d pay that anyway because I love Costco. I’m sure somebody is paying the freight on my card, but to me… it’s better than free.

  • emanon256

    The house always wins. Play long enough, you never change the stakes. The house takes you. Unless, when that perfect hand comes along, you bet and you bet big, then you take the house.

    -Danny Ocean

  • Travelnut

    USAA offers a card with a chip. I used it last summer in Scandinavia.

  • omgstfualready

    I have a USAA card I keep in a safe place for emergencies (I’m paranoid, I figure if my house burns down I’ll run out and not have a purse and so I keep a card safely stored outside my home that I can get to quickly for ER purchases). I never thought to see if they had the non U.S. usage benefits that Cap One does. I’ll be looking into it this weekend, thanks so much!

  • LFH0

    That’s probably true with many card issuers, but maybe not all. I have a USAA credit card with cash back (they also offer point options). The APR is 7 percent. No minimum payment. Outstanding customer service. The only “cost” I’ve found is a foreign transaction fee (all foreign transactions, even those in U.S. dollars), but the 1 percent rate is very low. But I’d rather pay that fee than deal with Capital One customer service.

  • bpepy

    Get an AMEX Costco card. There’s no annual fee and you get cash money back at the end of the year. One year we took a big trip and replaced the windows in our house, I charged both to my AMEX card and got over $1300 back! That’s worth it. Usually it’s more like $300-$400, but it’s still worth it!

  • Travelnut

    You’re welcome! Full disclosure, I’m a USAA employee. The USAA card charges foreign transaction fees, while I believe Capital One does not. Every now and then it’s suggested that we drop the foreign transaction fee but it never happens.
    FYI, love your screen name and wish I’d thought of it first!

  • Cybrsk8r

    Ask yourself. Would you buy a used car from Alec Baldwin?

  • omgstfualready

    I cannot tell you as a customer how fantastic USAA employees are to work with. They have my checking, savings, home insurance, car insurance, a credit card; you get the point. Every call is met with someone knowledgeable and interested in helping. I hope it is a pleasant working environment for you.

    Yea, I was reading the site for a long time before I was compelled to write and that’s what was on my mind at that moment…..

  • MarkKelling

    Actually, it is the merchant you make your purchases at that pays a huge amount of the cost of your points. miles, or other rewards.

    Cards that give rewards have a higher interchange rate than plain old credit or debit cards. This is the ongoing battle between the merchants and the card issuers. It costs the same to process any card transaction no matter who issued it, who’s picture is on the face of the card, or what benefits you the cardholder receives. Why should the merchant pay the bank more just because you decide to use the gold plated platinum diamond studded card instead of the plain basic card?

  • Linda

    Yes it was misleading – which is a shame because the purchase eraser is a good deal, the $30,000 actually does erase $300 – so it’s the same as a 1% cash back on travel purchases. AND, as Chris says, no foreign transaction fee. I’ve had the card for less than 3 years and I’ve gotten over $1300 in credits. For a $59 annual fee. (No I am not an employee, just a satisfied customer).

  • $31488987

    I can understand why you’d object to miles programs that deflate their worth, pile on fees, sock you with blackouts, and expire your points without notice. But Capital One does none of these things. 1 mile = 1 cent on travel expenses and many gift cards. It doesn’t matter what kind of travel you redeem them for – you can even buy passes on your city transit system. The Venture Card is worth the $59 annual fee if you charge $1000 a month and pay in full monthly, as it will give you 2% back in legitimate rewards. Otherwise the Quicksilver card gives 1.5% back in cash, with no annual fee. What can possibly be wrong with this offer?

  • $31488987

    I pay my bill as soon as I get it. There are no fees. No interest rates. No foreign transaction charges. Benefits are straightforward and not changed. I understand that merchants (and consumers indirectly) pay a credit card processing fee, but we’re going to be charged for that whether we pay with cash, debit cards, credit cards, or bitcoin. Why not reap the generous rewards and get most of it back?

  • $31488987

    Sure, if you spend money and don’t pay the bill on time, you will pay. But if you pay as you go, you win. I haven’t paid credit card interest fees in decades and have received thousands of dollars in rewards.

  • Marilyn

    I have never watched the ad so don’t know if it is deceitful; however, if the person questioning if Capital One really will erase your charge, the answer is “yes.” This past summer, I was able to erase the charge for two airline tickets that were priced at over $800 combined. It was as easy as a phone call. I don’t recall how many points were required, but I still had points left in my account. I like their system far better than trying to accrue miles with a particular airline because those airlines keep raising the number of miles necessary to get a ticket. The Capital One points can be used on any airline but also for hotels, car rentals, and other things. I, too, like Capital One because they do not charge foreign exchange fees. I use my card for many purchases, but I don’t buy anything just to get more points–only for purchases that I need to make and I typically pay off my balances each month. So I really do not understand the animosity toward this credit card. In case you think I am employed by the company and simply putting in a good word for them, I am not now nor have I ever been employed by any credit card company.

  • Marilyn

    My Capital One card charges no annual fee. I pay off my balance each month so pay no interest charges. I fail to see how I am losing anything because they give me points that allow me to erase charges for airline tickets from my account.

  • Marilyn

    I feel the same way about my Am Exp card through Costco. Each year when my rebate comes in, I reward myself with something nice–one year a new laptop, one year a new tablet. I use it and my Capital One card for virtually all of my purchases so I either get cash back or points toward travel.

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