Here’s one reason to put your avocado toast and poke bowls on credit — if you can pay them off in full, of course.
There’s a revamped Capital One COF, -0.30% card on the market, aimed at foodies, that will offer 4% back on dining and entertainment charges, the company said Tuesday.
Capital One introduced its Savor card in October 2017. It offered 3% unlimited cash back on dining, 2% on groceries and 1% on all other purchases. It came with a $150 bonus when cardholders spent $500 within three months of opening their account and had no annual fee. (Existing Capital One Savor customers will automatically be upgraded to the new card and won’t have to pay an annual fee, said Lauren Liss, the vice president of U.S. cards at Capital One.)
The new Savor card will offer:• Unlimited 4% cash back on dining and entertainment, such as movies and sporting events
• 2% back at grocery stores
• 1% back on all other purchases
• A $500 bonus after spending $3,000 within the first three months of account opening
• No foreign transaction fee (same as before)
It will have an annual fee of $95, but Capital One will waive it for the first year. It will also have a variable APR of 16.24% to 25.24%, depending on credit score, compared to the average credit-card APR, 17.2%.
The 4%-back offer is competitive with the most generous cards on the market now — especially considering it has an annual fee of just $95, compared to other cards that charge between $400 and $600 per year.
It has some stiff competition. Uber and Visa V, +0.34% debuted the Uber Visa Card in October 2017, which also gives 4% back on restaurants, takeout and bars. But it comes with just a $100 bonus, after cardholders spend $500 purchases in their first 90 days with the card.
Some pluses for the Uber card: It does not have any annual fee, even after the first year. It also gives 3% back on airfare, hotels and vacation home rentals, plus 2% back on e-commerce purchases. (Capital One’s Savor card doesn’t offer any special cash back for travel or e-commerce purchases.)
The 4% back on dining and hefty $500 bonus will likely attract interest, said Matt Schulz, the chief industry analyst at credit-card website CompareCards. But the cashback on entertainment also adds up. Schulz, for instance, buys University of Texas football tickets for the season. “The idea of potentially getting 4% cash back on what I pay for those tickets in a year is significant,” he said.
This seems to be the latest card capitalizing on simplicity. After several flashy cards aimed at big spenders were released in recent years — Chase’s Sapphire Reserve JPM, -1.59% American Express Platinum AXP, +0.23% and Citi Prestige CIT, -0.76% to name three — several card companies have offered cards that come with fewer perks, but headline-grabbing cashback offers.
American Express introduced the Cash Magnet card in June, which comes with no annual fee and offers 1.5% cash back (significantly less than this new offer from Capital One). And along with the revamped Savor card, Capital One is also offering a new card, the SavorOne card. It has no annual fee at all and requires less spending to get a smaller bonus.
The new SavorOne card will offer• 3% back on dining and entertainment
• 2% back at grocery stores
• 1% back on all other purchases
• A $150 bonus after spending $500 within the first three months of account opening
• No foreign transaction fees
It will charge 0% interest on purchases and fee transfers for the first 15 months, then a variable APR of 14.74% to 24.74% after that.
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