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Fact Checked: Amy Tokic

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Updated: January 10, 2024

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware this post may contain links to products from our partners. We may receive a commission for products or services you sign up for through partner links.

Quick overview

The Capital One Smart Rewards Mastercard is a distinctive credit card. The unorthodox approach to earning points promotes healthy credit habits, especially for those tempted to spend. Rather than earning rewards when spending, you receive them when paying your balance. As such, this card further pushes you to keep a low balance.

Further research reveals some loopholes in the card – namely, a sub-par rewards program. While the card promotes five points per dollar on balance payments, the actual value of these points is menial. The Capital One Smart Rewards Mastercard will earn you 0.67% on balance payments. Redemption options are primarily gift cards and account credits. To compensate, the card offers a strong insurance suite, protecting travellers.

Ultimately, this card has a unique offering. While lacking on the rewards frontier, insurance coverage is surprisingly strong for a no-fee card. Its unorthodox approach to earning points promotes consistent payments.

Who's the Capital One Smart Rewards Mastercard for?

The Capital One Smart Rewards Mastercard is right if you need an added push to make payments. This no-fee card promotes healthy financial habits, rewarding you for payments rather than spending. The mindset of keeping a low balance also helps you build a great credit score. Further insurance coverage sweetens the deal for travellers.

While this card isn’t for rewards maximalists, it does cater to a niche audience. It’s a solid entry-level option for those who value travel insurance coverage more than rewards. It’s especially useful for young adults learning responsible financial behaviour.

Pros and cons

Pros

Pros

  • No annual fee

  • Earns five points per dollar paid towards the balance

  • Points don’t expire

  • Pre-approval without impacting credit score

  • Travel assistance and Mastercard Global Service

  • Strong insurance coverage (common carrier, baggage delay, rental car, purchase assurance, and extended warranty)

  • Price protection service

  • Zero liability for unauthorized purchases

Cons

Cons

  • Low rewards earn rate (0.67%)

  • Slightly higher interest rate (21.9%)

  • Price protection is capped at $500 per year

  • Limited to Capital One's redemption options

Capital One Smart Rewards Mastercard welcome bonus

The Capital One Smart Rewards Mastercard doesn't provide a welcome bonus. Further research reveals this card historically doesn't offer one, which is typical for no-fee cards.

How to earn points on the Capital One Smart Rewards Mastercard

Though including the word in its name, rewards aren’t the strong suit of the Capital One Smart Rewards Mastercard. Cardholders only have one option to earn points: paying off their balance. Its rewards structure isn't designed for those willing to squeeze extra points by managing spending categories, welcome bonuses and merchant partners. Instead, it caters to no-frills spenders who want to keep a low balance.

You'll earn five points for every dollar paid towards your balance. For example, you'll earn 1,250 points for a $250 payment. While Capital One gatekeeps the value of the points, it's estimated to cost around 0.133 cents per point. This translates to an earn rate of 0.67%, far from market-leading but not terrible for a no-fee card when considering the enhanced insurance coverage. Points are earned on net payments, meaning any reversed or refunded payments are deducted.

How to redeem points on Capital One Smart Rewards Mastercard

The primary ways to redeem rewards from this card include gift cards and account credits. Account credits are slightly better, as they value your points more. Simply log in to the rewards portal to make redemptions. 

Gift cards can be redeemed in varying denominations. You’ll need around 20,000 points for a $25 gift card, valuing the redemption at 0.125 cents per point. However, the selection and amount of points required can change without notice. Furthermore, the gift cards are physically sent to your address within two weeks of processing the request. 

Alternatively, you can redeem points as account credits. These lower your account balance but don’t count towards your minimum monthly payment. It costs 750 points for a $1 credit, valuing your points slightly higher at 0.133 cents per point. Unlike gift card redemptions, you have more flexibility since there is no minimum redemption amount. 

Regardless of your redemption, points won't expire if your account remains in good standing. However, closing your account will forfeit your accumulated points.

Capital One Smart Rewards Mastercard key benefits

  • Reward points for payments: Earns five points for every dollar paid towards the card balance, promoting timely payments and financial responsibility.
  • No annual fee: Ideal for those seeking a cost-effective credit card option without additional yearly charges.
  • Strong insurance coverage: Offers purchase assurance, extended warranty, and car rental collision/loss damage waiver, providing added security on purchases and rentals.

Capital One Smart Rewards Mastercard insurance coverage

  • Car rental collision/loss damage waiver insurance: Covers eligible rental vehicles for collision or theft up to the vehicle's actual cash value, up to $65,000. The coverage is valid for rentals up to 31 days.
  • Common carrier travel accident insurance: Provides coverage against accidental loss of life or dismemberment while travelling on a common carrier (like buses, trains, planes). The coverage is up to $250,000 for you, your spouse and dependent children. 
  • Baggage delay insurance: Offers compensation for purchasing essential items if the carrier delays your checked baggage for more than four hours. Coverage is up to $300 per insured person for each insured trip. You’ll need to charge the full cost of your tickets to the Capital One card. 
  • Purchase assurance insurance: Protects new items purchased with the card against loss, theft, or damage for 120 days from the purchase date.
  • Extended warranty insurance: Doubles the manufacturer's warranty, adding up to an additional two years.

Extra benefits

  • Price protection service: If an item bought with the card goes on sale within 60 days, the price difference is reimbursed up to $100 per item, capped at $500 per year.
  • Travel assistance: Offers 24/7 support for emergencies during travel, including medical referrals and lost luggage assistance.
  • Mastercard global service: Provides emergency card replacement and cash advance, along with 24/7 telephone access and ATM referrals in case of lost or stolen cards.
  • Zero liability: Protection against unauthorized card charges.

What people have to say about this card

The RedFlagDeals community's reaction to the Capital One Smart Rewards Mastercard is mixed. Mostly, there is skepticism about the actual value of the points earned, with speculation about their low worth. The following statement sums it up:

Mentioning the 5x points as a highlight is meaningless unless we know what a point is worth.

coolintheshade

How the Capital One Smart Rewards Mastercard compares

Capital One Smart Rewards Mastercard vs. RBC ION Visa

The RBC Ion Visa Card earns more rewards in exchange for reduced insurance coverage. While both cards are free, ION cardholders earn up to 1.5x points, or 1.07%. The Ion Card also offers a welcome bonus upon approval, while the Capital One Smart Rewards Mastercard doesn't.

However, the Capital One Smart Rewards Mastercard shines with its insurance coverage. Both cards offer standard purchase security and extended warranty, but the Capital One card offers more travel coverage. This includes rental cars, baggage delays and common carrier accidents. Neither card offers travel health insurance, generally reserved for premium travel credit cards.

Capital One Smart Rewards Mastercard vs. RBC ION+ Visa

Those willing to pony up some cash can upgrade to the RBC ION+ Visa. You can earn over triple the points compared to the Capital One Smart Rewards Card. RBC ION+ cardholders earn up to 3x Avion points per dollar spent, translating to a 2.14% earn rate.

However, the insurance coverage pales compared to the Capital One Smart Rewards. The ION+ only offers moderately better insurance than its free ION counterpart, including mobile device, purchase security and extended warranty. It caters to homebodies, while the Smart Rewards card coverage aligns better with travel junkies.

Capital One Smart Rewards Mastercard vs. Capital One Aspire Travel Platinum Mastercard

Frequent travellers will find more value in the Capital One Aspire Travel Platinum Mastercard. Not only will you earn more points with this free card, but you can also redeem points on travel-related expenses. In contrast, the Smart Rewards card focuses on gift cards and statement credits.

As for points, the Aspire Travel Platinum Mastercard touts a 1% earn rate, outshining the 0.67% offered by the Smart Rewards Mastercard. Both cards provide identical insurance coverage, cementing the Aspire Travel Platinum Mastercard as the better option.

Features RBC ION RBC ION+ Capital One Aspire Travel Platinum
Annual fee $0 $48 ($4 monthly) $0
Welcome offer 3,500 Avion points on approval ($25 value) 7,000 in Avion points after spending $500 ($50 value) None
Insurance Purchase security, extended warranty Mobile device, purchase security, extended warranty Rental car, common carrier accident, baggage delay, price protection, purchase security, extended warranty
Benefits 1.07% earn rate, savings at Petro-Canada and DoorDash, Rexall Be Well points partnership 2.14% earn rate, potential fee rebate, savings at Petro-Canada and DoorDash, Rexall Be Well points partnership 1% earn rate, $0 additional cardholder
Review Read review Read review Read review
Apply Apply now Apply now Apply now

Is the Capital One Smart Rewards Mastercard worth it?

The Capital One Smart Rewards Mastercard is worth it for those looking for a no-fee card with solid insurance perks. While the rewards potential is lacklustre, the extensive coverage can offset costly travel incidents. The unorthodox method of earning points with balance payments also helps promote healthy financial habits.

FAQs

  • What is Capital One Smart Rewards Mastercard?

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    Capital One Smart Rewards Mastercard is a no-annual-fee credit card that earns five points per dollar paid toward your balance. You can primarily redeem points for gift cards and statement credits.

  • How do you redeem your Capital One Rewards?

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    You can redeem Capital One Smart Rewards points online for gift cards, statement credits to your account, or unspecified "other options" that are not detailed.

  • How much is 1,000 Capital One points worth?

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    Your 1,000 Capital One Smart Rewards points are worth approximately $13.33 when redeemed for statement credits to your account or around $12.50 when used for gift cards.

  • Do Capital One Rewards points expire?

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    No, Capital One Smart Rewards points do not expire as long as your account remains in good standing. If you close the card, you will lose any unused points.

About our author

Daniel Schoester
Daniel Schoester, Freelance contributor

Daniel is an expert on travel, finance, and SEO. He received an Honours BBA (Finance) from Wilfrid Laurier University, then started his career with WOWA. Here, he learned various SEO tactics that were instrumental in quadrupling monthly traffic to one million views. Now the founder of Croton Content, Daniel helps financial companies scale through evergreen content. Aside from Money Wise, notable clients include Forbes Advisor, WealthRocket, and Hardbacon. Daniel loves to travel when not working. Although based out of Lisbon, Portugal, some of his most adventurous destinations include Rio, Cairo, and Istanbul.

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