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Cap One promotion sells out

By Janna Herron · Bankrate.com
Wednesday, April 4, 2012
Posted: 3 pm ET

It took about a month for Capital One to give away 1 billion free miles to new credit card holders as part of a promotion to lure consumers away from other travel rewards cards.

The credit card issuer announced Wednesday the ending of its "Double Miles Challenge" only 31 days after it started. The program gave new Venture cardholders double miles (up to 100,000 miles) for every dollar they spent last year on another travel rewards card.

Capital One said the promotion, which started March 7, would run through May 1 or whenever the 1 billion reward miles had been claimed.

That day has come.

The issuer declined to say how many new cardholders they signed up due to the promotion, but company spokeswoman Sukhi Sahni called it "very successful."

Credit card issuers continue to advertise a lot more and a lot sexier sign-up bonuses to attract new cardholders. Last year, 2 out of every 3 credit card offers came with a sign-on perk, according to market research firm Synovate. That was up from half in 2009 and 2010.

The extra prizes are more lucrative, too. Roy Persson, the director of competitive tracking services at Synovate, told me in an earlier interview that he's seeing as much as $500 cash back as a bonus, up to six nights free at a hotel or mileage bonuses that surpass the typical 20,000 to 30,000 miles.

(In fact, my household just got a mailing this week from Citi offering a 50,000 rewards bonus for adding its ThankYou Premier card to my wallet. That's worth $665 in airfare, according to the highlights.)

Of course, many of these bonuses come with a few bars that must be hurdled, usually a spending threshold during a certain amount of time. And most consumers should consider if the card fits their financial lifestyle instead of just being dazzled by the bonus, says Bill McCracken, CEO of Synergistics Research Corp., an Atlanta-based marketing research firm for the financial services industry.

That means thinking about the annual fee, interest rate and rewards program.

Still, even McCracken believes there are some offers that are too good to pass up.

"I think this Capital One promotion falls under that umbrella as significant or material enough that consumers perceive it as over and above the typical sign-up bonus," he says. "You don't have to do anything. You just get the miles."

Capital One tried a similar, but not quite as sweet, promotion last year where it matched the miles a new cardholder had earned with a rival airlines rewards card. That one was also a success, matching 1 billion miles in 25 days, according to the company.

"If a card company can up with card promotion that is unique and substantial, consumers are going to run and not walk to their product," McCracken says. "And that is what Cap One has done."

What credit card promotions do you like? Have you gotten a card just for the bonus?

Follow me on Twitter: @JannaHerron.

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