Why the Capital One Savor desperately needs an upgrade

On paper, the Capital One Savor Cash Rewards Credit Card looks like an incredible option for people looking to earn rewards on everyday spending (like me). After all, it boasts top-notch cash back rates in popular spending categories like groceries and dining as well as in harder-to-find categories like entertainment.

But, based on my years of experience reviewing credit cards and dishing out advice on how to maximize rewards, I’m reluctant to recommend the card to most people. In fact, I almost always recommend the no-annual-fee Capital One SavorOne Cash Rewards Credit Card over its premium counterpart.

Don’t get me wrong — I’m a big fan of Capital One’s Savor card family. But the extra cash back on dining, entertainment and streaming likely won’t offer enough value to make the $95 annual fee worth it for an average spender.

Until Capital One upgrades the Savor card, it’ll have a hard time competing with the SavorOne and other premium cards in its class.

How the Capital One Savor stacks up

Despite the Savor card’s $95 annual fee, its features aren’t that much better than the Capital One SavorOne card’s rewards and perks. And while the Savor card stands above many no-annual-fee cards based on its cash back rates and intro offers, its meager perks and rewards rates fall short compared to those of other rewards cards in the $95-annual-fee range.

Here’s my breakdown of how the Savor card’s rewards, perks and intro offers fare against those of the SavorOne as well as other rewards cards with a $95 annual fee:

• Rewards rate and total value

  Savor vs. SavorOne: While the Savor earns more cash back on eligible dining, entertainment and streaming service purchases than the SavorOne, the SavorOne could be a better value overall. Based on Bankrate’s methodology for calculating annual card rewards value (average rewards earned minus annual fee), I estimate the average spender will earn nearly $40 more per year with the SavorOne.  My verdict: Capital One Savor.
  
  Savor vs. other rewards cards: The Savor offers some of the best rewards rates you can get on dining, groceries and streaming for a $95 annual fee, but a few cards earn 5X or more in those categories. Some other cards also earn more valuable rewards or perks, especially for travel, which can make it much easier to offset annual fees. My verdict: Rival cards.

• Perks

  Savor vs. SavorOne: Despite their different costs, the two Savor cards carry mostly the same Capital One features, perks and protections. This makes the SavorOne the clear winner in this category due to its lower cost. My verdict: Capital One SavorOne.
  
  Savor vs. other rewards cards: Compared to some other mid-tier rewards cards, the Savor carries few noteworthy perks. A number of competing cards offer benefits like annual travel or hotel credits and credits for expedited airport security services, as well as better travel protections. If you’re on the hunt for perks (especially travel perks), a $95-annual-fee travel rewards card will likely be a better fit. My verdict: Rival cards.
  

• Welcome offers

  Savor vs. SavorOne: As you might expect given its annual fee, the Savor card carries a more valuable welcome offer than the SavorOne (a $300 cash bonus after you spend $3,000 in your first three months with the Savor, versus just a $200 cash bonus with a $500 spend in the first three months with the SavorOne). That said, the spending requirement is also six times higher, so the SavorOne offers a much better return on spend. In the end, the best fit for you will depend on your spending habits. My verdict: It depends.
  
  Savor vs. other rewards cards: The Savor card gives you a chance at one of the most valuable welcome offers available on a consumer cash back card at this price level. But if you’re open to other types of rewards cards (like travel cards), you can easily find $95-annual-fee cards that carry welcome offers valued at $600 or more. The catch is in most cases you’ll only get that value if you redeem rewards for travel. So the best fit and value depends on your goals. My verdict: It depends.
  

• Intro APR offers

  Savor vs. SavorOne: The Savor card doesn’t carry an intro APR offer, so if you’re looking for a card that will help you minimize interest charges as you finance new purchases or chip away at debt, the SavorOne is the clear winner. My verdict: Capital One SavorOne.
  
  Savor vs. other rewards cards: Most premium rewards cards lack intro APR offers, but there are a few that carry competitive offers, including the Blue Cash Preferred® Card from American Express. My verdict: Rival cards
  

In-depth breakdown: Savor vs. SavorOne annual value

The biggest reason I hesitate to recommend the Capital One Savor is simply because the SavorOne offers almost the same rewards rates and perks for no annual fee. An extra 1 percent cash back on dining, entertainment and select streaming services is hardly worth the Savor card’s $95 annual fee for most people.

Based on Bureau of Labor Statistics data and a CNET streaming cost study, the average household spender is unlikely to spend enough in the Savor card’s bonus categories to make it a more lucrative option than the SavorOne. In fact, you’d need to spend $9,500 more than the average household spender in the Savor card’s top cash back categories just to make up for the annual fee and earn the same rewards value as the SavorOne.

Here’s a quick look at how much you’re likely to earn with both cards, estimated based on the Bureau of Labor Statistics consumer spending data.

How the Capital One Savor card can improve

Although I don’t think the Capital One Savor card is the best option for most spenders, I believe it has the potential to become one of the best cash back cards on the market with an update to its already-solid features.

For example, the annual fee could become worthwhile if Capital one adds new features along the lines of:

• Higher cash back rates. A 5 percent to 6 percent cash back rate on dining and entertainment, and hopefully a higher rate on grocery store and streaming services, could elevate the Savor over the SavorOne and put it in better standing with the Blue Cash Preferred® Card from American Express.
• Monthly credits for dining or entertainment. Although the American Express® Gold Card carries rewards rates similar to the Savor card, you can almost offset its $325 annual fee with just its monthly credits for eligible dining and food delivery purchases. Adding ongoing credits for dining, entertainment or food delivery service purchases could help justify the Capital One Savor card’s price tag since its rewards rates struggle to efficiently make up for the cost.
• Improved sign-up bonus. The Savor card’s sign-up bonus is already one of the highest cash back card offers, and $300 after spending $3,000 within the first three months isn’t bad compared to some premium cash back card offers. However, the $100 bump over the SavorOne’s offer is a bit weak for six times the spend in the same timeframe. A lower spending requirement or higher bonus value would also put it in line with some other $95-annual-fee rewards card offers.
• Intro APR offers. One of the notable edges the SavorOne has over the Savor is its competitive intro APR on purchases and balance transfers. Adding an intro APR on purchases and balance transfers could sway applicants on the fence toward the Savor — especially since it would compete with the Blue Cash Preferred card’s intro APR.

If nothing else, an annual fee would be easier to stomach if Capital One lowered the annual fee and left the features as is. Similarly, the Savor card would be easier to recommend if it was given the Capital One Venture X Rewards Credit Card treatment: amping up the features in exchange for a new annual fee tier. A “Capital One Savor X Cash Rewards” card would easily be one of the best cash back cards out there if it came with higher rewards rates (and maybe even boosted flat-rate rewards) plus enough yearly dining or entertainment credits to justify a $125 to $150 fee.

The bottom line

Although the Capital One Savor credit card delivers top-tier sign-up bonus value, food-related rewards rates and category diversity among cash back cards, it isn’t a big enough of a step above it’s no-annual-fee counterpart to recommend in most cases. Unless Capital One improves the Savor card’s rewards rates or adds monthly credits for food or entertainment-related purchases, the SavorOne or a competing premium rewards card will be a more worthwhile choice for the average cardholder.

Personally, I think it’s a shame considering the rewards card market could really use more premium cash back cards that focus on the everyday value instead of high-maintenance travel redemption. But until then, I’ll keep my fingers crossed that Capital One will realize the Savor card and its family’s full potential and upgrade the Savor or expand with a “Savor X”-style card.