Barclaycard Arrival Plus® World Elite Mastercard® has an unusual rewards scheme. All purchases earn 2 points per dollar. If you redeem those points for cash, all you get is half a cent per point. In that case, this card is nothing but a 1% cash back card. When you redeem points for travel, though, things get interesting. When redeemed for travel, points are worth a penny each, plus you get a 10% rebate on all points used. Because of that rebate, many people (including me) have suggested that this card earns 2.2% back towards travel. Of course, when you redeem the 10% rebated points, those points earn a 10% rebate as well, so some say the card earns 2.22%. Others take it further and will put a bar over the second number in “2.2%” in order to indicate that the 2 repeats forever (the only thing stopping me from doing so is my lack of knowledge of how to do that within my blog authoring tool!). Anyway, for the rest of this post let’s use the simpler 2.2% to represent the conventional wisdom of the value of this card’s travel rebate. Is that number correct? One can logically argue that the real rebate is higher. And, at the same time, one can argue that the real rebate is lower. Let’s look at each argument…

### More that 2.2%

Bill, at MileValue, recently wrote that Barclaycard Arrival World Mastercard points were worth 1.14 cents each. If he’s right, then that would mean that purchases made with the Barclaycard card earn 2.28% towards travel. How could this be?

Bill points out that the way travel redemptions work is as follows: you pay for travel with your Barclaycard and then you apply your points as a statement credit towards those travel purchases. Because the awards work this way,** you earn points for the same travel that you’ve redeemed points for**. Let’s make up an example:

Suppose you have 35,000 points and you want to get a $350 hotel stay for free. You would simply pay for your hotel stay with your Arrival card, and then log into your account to redeem 35,000 points for that purchase. Now, two things happen: 1) You earn your 10% rebate on points used = 3,500 points; and 2) You earn points for the $350 purchase just as you would any other time: $350 x 2 points per dollar = 700 points. So, after your “free” $350 hotel stay, you will have earned back 4,250 points. In other words, your net loss of points is only 30,750 points. And, since you got $350 worth of travel from those points, we can calculate the value per point: $350 / 30,750 = **1.14 cents per point.**

**My take: **I agree with Bill that it is theoretically possible to get 1.14 cents per point in travel value from your Barclaycard points. However, **this same logic can be applied to any card** that offers rewards in the form of statement credits. With all such rewards, you earn points and redeem rewards at the same time and so the effective value of your reward is arguably higher. In fact, one could take the same logic and say that a hundred dollar bill is worth more than $100:

- Buy something with your rewards credit card (let’s say you have a 2% cash back card).
- Deposit your $100 bill into your bank account
- Use your $100 to pay your credit card bill.
- Notice that you get back 2 dollars from your credit card!

So, in the example I just gave, my $100 bill is actually worth $102! But since, by the same logic, $2 is worth more than $2, the total value of my $100 bill is approximately $102.04.

While I agree with Bill’s overall analysis, I think Bill would agree that it would be ludicrous to say that $100 is worth $102.04. So, I’d rather think of the way Barclaycards’ rewards work as a virtue: it’s a good thing that you can earn rewards for travel redemptions. With some other programs such as Citi’s ThankYou points, you use points directly to pay for travel and so you lose out on the opportunity to earn credit card rewards from those purchases. Let’s agree to keep in mind that difference between programs, but not overcomplicate things by overstating or understating the point values.

### Less than 2.2%

Recently, a reader named Max wrote the following comment in one of my posts:

I used Barclaycard’s Arrival redemption process recently, and can share a few annoying features. First, redemptions for any individual travel expense must be in increments of $25. So in most cases, there can be no redemption in full. Second, unredeemed parts (even when over $25) can not be submitted again. And finally, the 10% travel bonus miles are awarded after a redemption.

So the net result of the above, there will always be unredeemed expenses and leftover miles. The promised 110% travel redemption value is not really possible.

Max is right. Because Barclaycard doesn’t allow redemptions of less than $25, and because the 10% rebate occurs after your redemption, **you will always have extra points in your account** (assuming you only redeem points for travel). Let’s take an example. Suppose you start with 40,000 points and you redeem all of those points at once for $400 towards travel. You would then get back 10%, or 4000 points. This will always happen with travel redemptions and it is therefore impossible to use up all of your points. And, as long as some number of points go unused forever and ever, those leftover points are worth nothing to you. So, Max is right: it is impossible to get exactly 1.11…% value from each point (notwithstanding Bill’s opposite argument covered above).

That being said, the more points you earn and redeem, the closer you will get to earning the ideal value from your points. Eventually, having an unusable balance of less than 2,500 points will be no more than a rounding error. Let’s assume for example, that you use all 40,000 points from your signup bonus for travel redemptions. You would get back 4000 points (10%). Now, let’s say that you use 2500 of those points for a travel redemption. You would get back 250 points which would increase your remaining balance to 1750. Those points can’t be redeemed until you reach $25 worth of points, so we’ll say that you have 1750 orphaned points. In total, you would have received $425 value from 40,000 points. That’s a per point value of 1.06 cents each.

Now, let’s scale up the example to 400,000 points. At that level, if you redeem all at once for travel, you will get back 40,000 points, and the rest of the math will work the same as above. In other words, you would end up with 1750 orphaned points. In this case, you will have received $4,425 value for 400,000 points. That’s a per point value of 1.1 cents per point.

### Final Answer: 2.2%

Yes, you can logically and convincingly argue that Arrival points are worth more or less than their apparent value of 1.1 cents each towards travel. In the end, though, the difference from 1.1 cents per point is small. Bill, at MileValue, argued for 1.14 cents per point. And, when you orphan 1750 points from a starting balance of 40,000 points (as in my example above) you may end up with 1.06 cents value per point. In each case, the difference from the conventional wisdom is extremely small. So, I’m happy to stick with the conventional wisdom: in my mind, Arrival points are worth 1.1 cents each, and because the Arrival card earns 2 points per dollar on all purchases, it earns 2.2% towards travel. Good enough.

*For reference, Barclaycard defines travel purchases as: “Airlines, Travel Agencies & Tour Operators, Hotels, Motels & Resorts, Cruise Lines, Passenger Railways and Car Rental Agencies.”*

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[…] For example, the Barclaycard Arrival Plus card earns 2 points per dollar on all purchases, and points are worth 1.1 cents each towards travel. So, you’ll earn 2.2% in rewards, which more than compensates for the 1.87% […]

This is a great analysis, but its missing one last thing that will put an end to all discussions because this is what we really need to know:

I’m about to close my barclay arrival+ account,and I want to leave closest to the minimum points on the table (minimum possible when closing the account). In order to do so, the last transaction needs to be at least and closest to $25 and I need to have exactly 2500 points for the last transaction.

Can you develop the formulae to calculate the last redemptions before closing the card? The variables include the number of travel transactions (I think you must have at least three), the amount of the those transactions (all must be over $25), and the constraints that barclay only allows redemption in increments of $25, up to the maximum amount of the transaction if you have that many points (E.g. a travel expense of $67 can be redeemed for $25, $50, and $67).

For example, if you have 30,000 points and three travel transactions of $210, $155, and $60 what do you do to make sure your last redemption leaves closest to the least amount on the table?

One scenario is redeem the full $210, which leaves you with $90+$21 = $111. Then redeem $75 out of the $155 transaction, which leaves you with (111-75) = $36+7.50. Finally, attempt to redeem that $43.50 worth of points on the final $60 transaction. That might still leave you with 435 points, which is not bad, but still leaves points on the table. Does anyone know if you can redeem for that last transaction if you have less credits than the transaction amount (and if so, is it only in increments of $25, meaning in this scenario, I can only redeem $25 out of the $43.50)?

I tried forming some multivariate formulae in excel but I couldn’t get them all to mesh together and I don’t know enough VBA to get them to jive. I think one of the pieces of the puzzle include something like 25=y+(0.1x) for how to solve for the second to the last redemption. I know one way to get almost perfect is to be left with 12000 points and make a travel purchase for $105. That will get you ($15+$10.50) ~ $25 for that final redemption, but that also assumes that you can find a travel purchase of $25 exact for that final redemption…

Thought you’d enjoy the challenge to complete your post. =)

That’s a clever idea, but I’m not sure its worth it. Why not just downgrade to the no fee Arrival and keep the points alive?

The chances of auto-approval are higher when a current related product doesn’t already exist, but I guess the real answer is that it hasn’t been worth anyone’s time or interest to develop the formulae. A little disappointing since this looked like a fun problem solving exercise, but we have other fish to fry. =)

[…] You do need to redeem points for travel to get the most out of them. If you redeem for cash or other prizes your points will be worth only about half a cent each. At that rate, you’d be much better off with a no fee 1.5% cash back card. When points are redeemed for travel, though, points are worth 1.1 cents each, thanks to the 10% rebate. That means that this card earns approximately 2.2% back, towards travel, for all spend (see “What is the Barclay Arrival card’s rebate really worth?”). […]

The Arrival card sure gets a lot of ink. But the priceline regular card with no annual fee pays 2% toward any charges on your monthly statement. No (1% bonus back) but no annual fee either. Also a Barclays card. Not to mention William Shatner on the card.

I don’t think the Priceline 2X card is available to new applicants anymore.

[…] card. Perhaps the only post about the Arrival worth mentioning comes from The Frequent Miler. He breaks down exactly what he thinks each point is […]

Since most of the spending on my Arrival card is MS, I prefer to think of it as a discount rather than calculating the value of a point. 98.75 fees for 25 VRs nets 25,200 points. These are redeemed for $250 worth of travel leaving me with 2700 points and another $25 off of another charge. 64.090909% discount, and I can stack cashback discounts or portal miles on top of this, as well as the points earned on the travel itself.

This works out far better for me than any other (non-ultra-luxury) hotel points such as 10K UR > Hyatt points for 132.05 and be stuck with one chain of hotels and their basic rooms. Maybe it helps that I do not subscribe to the theory that a room with breakfast is ever worth more than $250.

[…] have been posting on it this week. My favorite post (and the one that sums up my thoughts) is from Frequent Miler Citi Forward ($8.5K), AmEx Blue Cash Everyday ($10K), Chase Freedom ($12.4K), Discover it […]

To me the real value here is that we are having this discussion……I think the cold headaches this community passes on to each other is just invigorating……..so is $2640 for hotels in penny points from a year of manufactured spend more valuable than a First Class ticket? Would be nice to have free stays at Relais and Chateau………..

[…] the Frequent Miler asked What is the Barclay Arrival card’s rebate really worth?, noting Bill’s post and a reader email as the catalysts. The Frequent Miler’s […]

i don’t think Bill’s analysis is convincing. When you use Barclay Arrival to pay for a stay in order to redeem points for 2.22..% cash back, although you would also earn cash back for that stay, it does not make sense to add that cash back to the original cash back you used to pay at the first place and then calculate the final total cash back rate. From the moment you pay with your points, you forgo the opportunity to use other credit cards to earn cash back. Therefore, the transaction should be deemed as a new transaction and the newly earned cash back should be considered rewards earned from a new transaction and needs to be separated from the original cash back you use to redeem for the stay.

If you spend $100 on this card, you don’t actually get $2 of cash back. You get $2 of credit the next time you spend $2 on qualified travel purchases. So total purchases are $102, which cost you $100 of actual cash. This is a discount of 1-100/102 or 1.96%, not 2%.

If it were actually $2 of cash back then you wouldn’t have to come up with $2 of travel purchases to realize the credits. In that case, you would have cash outflows of $98 to get $100 of value. Only in that case would it be a true 2% rebate (1-98/100).

You can then apply the 10% rebates starting from the figures above, but I think technically a lot of the rebate calculations start with the wrong math.

Sorry, but you are just wrong. When you spend that $2 on travel, you also get $0.04 in rebates for that. Or think of it this way: Spend $98 on non-travel, $2 on travel, and you get $2 in credit that would cover your travel.

The math in this article is 100% correct.

“While I agree with Bill’s overall analysis, I think Bill would agree that it would be ludicrous to say that $100 is worth $102.04. ”

Yeah, the way to deal with this is the way I’ve usually seen it in valuations: you decrease the value for the points you are giving up by redeeming. If I book a NY->LA flight on an airline for 25K it’s really costing me 31K because I’d earn 6K if I had to buy it. Ditto for hotel rooms, using points to purchase through your card’s agent, etc.

and I strongly think other bloggers now will copy this article just because they want to talk about the arrival card. Of course, FM is not in the same boat so this is the blog I usually read.

man, this seems like splitting hair to me.. 2.2% is a good enough number for me, it may not be exact but it will do. Adding that 0.08% even on annual spend like 50k, is only $40.

The most succinct way I can state our position is that the points you redeem are worth 1.14 cents. It is important to consider the points you don’t redeem and subtract value accordingly.

I’d say the minimum value anyone will get for their $1,000 minimum spending is $450. (You get 42k Arrival miles for bonus plus $1k spending, you redeem for $400, you get 4k back, you now have 6k, and you do a $50 partial redemption.)

$450 value on 42k miles is 1.07 cent per mile. That’s the minimum, 1.14 is the maximum.

I hope to get closer to the max than the min because this is a card I will put a lot of spending on (because 2.14% to 2.28% back is huge.)