[ANALYSIS] CIBC Aventura Visa Infinite Card

Even though CIBC is not completely losing Aeroplan, it will only be a matter of time probably before they are fully separated from Aeroplan. So CIBC is preparing for life without Aeroplan by ramping up its own program called Aventura. CIBC currently has a 30,000 sign up bonus points promotion that ends on December 31, 2013. The regular sign up bonus is 15,000.

The earning ratio on this credit card is as follows:

• Earn 3 Aventura points at select CIBC Bonus Rewards establishments
• Earn 2 Aventura points on purchases made with the CIBC Aventura Rewards Centre
• Earn 1.5 Aventura point for every $1 spent on gas, groceries and drug stores
• Earn 1 Aventura point for every $1 on all other purchases

The 30,000 points conditions are as follows.

• Open the credit card between October 1st and December 31, 2013.
• Receive 15,000 Aventura points after your first purchase
• Receive an extra 10,000 Aventura points if the first purchase made is posted to your account by January 31, 2014
• Receive an extra 5,000 Aventura points after two or more purchases posted to your account by January 31, 2014.

So that’s easy enough, basically you just need to make two purchases to get the full 30,000 points. However, I’m not liking this promotion because the first year annual fee is not waived, so it does not give me any incentive to keep the card beyond the first year. Usually if the credit card waives its first year annual fee, we are more likely to keep the card the second year, because we would, at worse, we pay one annual fee for two years worth. By the third year of having the credit card, I would hope the credit card company would give us some incentive (like waiving the annual fee or give us additional bonus points) to retain the card, or else we are better off just cancelling the credit card and looking for a better deal elsewhere.

Starting in 2014, short haul flights can go as low as 10,000 Aventura points and long-haul flights start as low as 25,000 (Anywhere in North American excluding Hawaii and Alaska). It is unclear what they mean by starting “as low as” because there is no clear award chart. But let us say that you can redeem a long haul ticket from the East Coast to the West Coast for 25,000. To me, a plane ticket can be bought for that distance for as low as $550 (for a return flight) if you shop around for fairs. So worse case, 550 / 25,000 = 2.2. Worse case meaning, the rate of return will be higher if the value of the plane ticket is higher.

That means 1 Aventura point equals 2.2 cents, which is fairly decent value to me. That means you just received a 2.2% return per $1 spent on all other purchases and 3.3% return for every $1 spent on gas, groceries and drug stores. Once you spend the 25,000 points though, you drop to 5,000 points and depending on your spending habits, it could take time to earn those points back. Keeping in mind that you are continually paying the steep $120 annual fee.

The other valuable way of redeeming the points is for, hopefully 3 short haul flights worth 10,000 points each. That can be amazing value because you are basically paying $120 for 3 return flight tickets if you fly in the first year of having this credit card. If you two take years to redeem your points, it’s $240 for 3 return flights, which is still pretty good value.

Get this credit card for:

This credit card can potentially have a lot of value if you redeem the points effectively. If you already know that you have a few trips coming up within the next 52-weeks, then you can seriously consider getting this credit card. Keep in mind that it will take some time for the points to post on your account. So make sure you have the points in time to cash out on the flight tickets.

If you can manage to pull off 3 short haul return flights for 10,000 each, then you definitely hit a mini jackpot.

After you cash in the 30,000 points, you are basically paying $120 to accumulate points with them from one year to the next. The value can still be good if for example you spend $10,000 to get the next 10,000 points for a short haul flight. If you spend $10,000 in year two of having this credit card, you are basically paying $120 for your flight ticket, which is still not a bad deal. Or if you manage to spend $25,000 in year two, you get a long haul flight for $120, even better. Basically the more you spend, the better it is.

Do not get this credit card because:

If you are worried about your credit score or you are not a big spender, this is not the card for you. You should be focusing on credit cards with no annual fee and lower interest payments (the interest rate on this card is 19.99%).

It seems like it is going to be a lot of hassle to figure out their redemption policies, so if you want hassle free, you better stay as far away as possible from this card. I’m still curious to see what is considered a 10,000 short haul flight. I would prefer to see the full details before getting this credit card.

I would not want to keep this credit card beyond the first year because there are just too many other good deals out there. For those who have good credit scores and big spenders, you are better off just signing up other credit cards that waive their annual fees and also have a big sign up bonus. The fact that I do not even want to keep this credit card beyond the first year deters me from signing up for this credit card in the first place.

Recommendations to CIBC:

Earning 30,000 for two purchases is such an easy way to get the points, but we do get hit with the $120. An alternative would be to waive the annual fee on the first year and require us to spend $500 in the first three months or $1000 in the first six months of having this credit card to qualify for the sign up bonus. That way, at least when we are using this credit card, we start accumulating points and we are more likely to want to keep this card beyond the first year.