Capital One Savor Review | Up To 4% Cash Back

Credit cards today work hard to stand out. Some do it buying offering 0% APR introductory rates. Some compete by offering rich signup bonuses. While other cards offer significant cash back rewards. The Capital One Savor credit card tries to earn a place in our wallets with both a signup bonus and excellent cash back rewards.

The card’s high rewards, signup bonus and no foreign transaction fee make it one of the best cards for spending on dining, entertainment, and groceries.

• $300 welcome bonus when you spend $3,000 on the card in the first 3 months
• 4% cash back on dining and entertainment, 2% cash back at grocery stores, and 1% cash back on everything else
• 16.74-25.74% variable APR
• No annual fee the first year, then $95
• $0 fraud liability
• Good credit or better required

Earning Rewards

The Capital One Savor card offers three levels of rewards:

• Earn 4% back on dining and entertainment
• Earn 2% back on grocery stores
• Earn 1% back on everything else

The dining category includes purchases at restaurants, cafes, bars, lounges, fast-food chains, and bakeries. The entertainment category includes buying tickets to the movies, plays, concerts, sporting events, tourist attractions, theme parks, aquariums, zoos, and dance clubs. Believe it or not, it also covers pool halls and bowling alleys.

The grocery store category includes “supermarkets, meat locker, freezer, dairy product store and specialty market.” It’s important to note that it excludes superstores like Walmart and Target.

You can also maximize your rewards by spending $3,000 on purchases within the first three months of account opening to earn the card’s $300 welcome bonus.

Redeeming Rewards

Redeeming rewards with Capital One Savor is simple. The card has an option to automatically redeem your cash back at a set time each calendar year or once it reaches a specific threshold ($25, $50, $100 or $200).

There are several ways to redeem your cash back rewards:

• Redeem for a statement credit
• Request a check
• Redeem for gift cards or a charitable donation

Savor rewards do not expire as long as your account stays open. There is no minimum redemption amount, meaning you should cash out your rewards as frequently as possible.

For those who use the card for almost every expense, the cash back rewards can generate hundreds of dollars a year. In some cases, the rewards could exceed $1,000 annually. Let’s look at a specific example.

According to the Economic Policy Institute, a family of four in the New York metro area spends an average of $10,896 a year on food. Assuming half this amount is on groceries and the other half on dining, the family would generate $326.28 in cash back rewards for dining and groceries alone.

If we assume the family charges one-half of its remaining budget (which would total $4,718), they would earn an additional $566.16 over the course of a year. This hypothetical family would generate nearly $900 a year in cash back rewards.

This hypothetical doesn’t factor in the welcome bonus or the annual fee beginning in year two. Of course, your actual cash back rewards will depend on how you use the card.

• No foreign transaction fees: Using the card outside of the United States will not incur any fees
• Extended warranty: Additional warranty protection on eligible items purchased with the card
• Price protection: Be reimbursed for the price difference if you purchase an item and find a lower price within 120 days
• 24-hour travel assistance services: Capital One will issue an emergency replacement card and a cash advance if your credit card is lost or stolen.
• $0 fraud liability
• 24/7 customer service

Interest Rates

• APR on purchases: 16.74%, 22.24%, 25.74%, based on your creditworthiness
• No intro APR
• APR for cash advance: 25.74%
• Penalty APR: late payments will not cause APR to increase
• Grace period: 25 days

Fees

• Annual fee: $95 annual fee, waived for the  first year
• Balance transfer fee: 3% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One offers you. None for balances transferred at the Transfer APR
• Cash Advance: Either $10 or 3% of the amount of each cash advance, whichever is greater
• Foreign purchase transaction: None
• Late penalty: up to $38
• Returned Payment: $0

What we like

• Simple rewards structure with 4% cash back on dining and entertainment and 2% cash back on groceries
• Sign-up bonus
• Capital One Savor card benefits
• No foreign transaction fees

What could be better

• $95 annual fee, although it is waived the first year
• No intro APR and the variable APR can exceed 25%, depending on your creditworthiness
• No increased rewards for travel purchases

The Capital One Savor card offers excellent cash back on dining and entertainment purchases combined. Its 4% cash back reward is the highest we’ve seen for dining. Its 2% cash back on groceries, while good, is not the best available option. The Blue Cash Preferred Card from American Express, for example, offers 6% on grocery store purchases, subject to a spending cap of $6,000 annually.