Key Link: Chase Sapphire Preferred
There are three key value propositions for a credit card.
- Signup bonus (how much will they give you upfront for getting the card)
- How value is the earning for your ongoing spend (do you actually want to put spending on the card once you’ve earned the bonus)
- Benefits of having the card
And the Chase Sapphire Preferred card is top of wallet for the first two of those criteria — one of the very best signup bonuses, 40,000 points after $3000 in spending within 3 months, and that’s an exceptionally good offer because their points are among the two best currencies of any loyalty program, and double points earning in that most valuable of programs on all travel and dining spending, Visa acceptance, and no foreign currency transaction fees.
The only area where it’s not at the very top is in extra benefits for carrying the card. Oh, it’s a good card for its benefits. I cracked the screen on my new phone, it cost me over $300 to fix, and the card’s insurance coverage paid me back. But the very best cards for benefits are the American Express Platinum card for lounge access benefits with Delta, US Airways, American, and more (and several other benefits like an annual $200 airline fee credit and reimbursement of the fees for Global Entry expedited immigration) and the Hilton Reserve Visa for Hilton Gold status as long as you have the card (free breakfast, internet, upgrades, bonus points).
But hitting the top end of two of three categories of value from a credit card, the Chase Sapphire Preferred card has been probably the all-around most lucrative credit cards in the market for the past 18 months. Back in November I called it the king of credit cards.
Requirements for the 40,000 Point Signup Bonus
When I first got into the credit card game there was no requirement to actually spend money on the cards to get a bonus, the points either came with card approval or after first purchase. But then the bonuses were only about 15,000 points…
Gradually banks started adding requirements to put spending on the card to qualify for bonuses, $250 and then $750 and then much larger amounts, the American Express Business Gold Rewards card generally requires $10,000 in spend when there’s a bonus offer available for instance. The British Airways card came back with a 100,000 point signup bonus this year that required $25,000 in spend for the full bonus.
The idea is first that they want to get new cardmembers into the habit of using cards, they don’t just want folks to get the cards. They’re offering the bonus with the intention of making it ‘top of wallet’ for the new cardholder. And second that they want higher spend customers, those are more profitable for the banks overall.
Among the better cards $3000 is on the lower side for required spending to get the bonus. For a few days the spending requirement was even lower at $2000. And plenty of folks who had applied for the card at the regular spending threshold e-mailed Chase through their website and got the card issuer to match the lower offer. Chase has long been good about matching better offers that come along within 90 days of getting the card. As a result, I’m never worried getting a Chase card that a better offer will come along shortly after I apply.
Transferring Chase Ultimate Rewards Points to Airline, Hotel, and Train Programs
While you can redeem these points at 1.25 cents apiece towards paid travel, that’s not their best use. You want to hold onto them and transfer them to frequent flyer programs most of the time.
I value ‘flexible’ points the most, points where you can choose where to point them at the time you’re ready to redeem for an award.
If you accumulate miles in an airline program, then you need that program to have the award you want at the time you want to fly.
But with points that transfer to your choice of programs, you increase the odds substantially of getting the award you want — if one program doesn’t have the award, another one likely will.
The transfer options with this card are:
- Airlines: United, Korean Airlines, Southwest Airlines, British Airways
- Hotels: Hyatt, Ritz-Carlton, Marriott, Priority Club
- Train: Amtrak
The best hotel transfer value is Hyatt in most cases, but it’s really valuable to be able to top off an account towards an award no matter which account of yours that winds up being. (And I love that the Hyatt program makes redeeming for club level rooms or suites relatively inexpensive, for instance suites are 50% more than a regular award room whereas Starwood charges double.)
Usually I think of United as the best value for points transfers, since the award chart is reasonable and available on Star Alliance partners is really pretty good in business class to Europe and Asia.
But transferring to British Airways Avios can be a good use of points, especially for short-distance non-stop flights (think as low as 9000 points roundtrip for a coach award). And while many awards on BA involve fuel surcharges, if you use those points to fly American Airlines domestic or to South America, LAN to South America, or Alaska Airlines for instance there are no fuel surcharges. (Also quite reasonable intra-Asia on Cathay Pacific and Aer Lingus Boston or New York to Ireland.)
Meanwhile, not only do you get Star Alliance awards via United and oneworld awards via British Airways, you have coverage of the third alliance — Skyteam — as well. You get access to the same Skyteam saver award space as if you had Delta miles since you can transfer to Korean Airlines. And with Korean you get access to international first class awards, something Delta doesn’t offer. I have an upcoming redemption in Korean Airlines first class, availability was really good. Korean also offers one-way awards, also not offered (except at the same price as roundtrip!) by Delta.
Further, points to several of the programs transfer literally instantly, and to anyone’s account you wish. That’s great for topping off the accounts of friends and family, and also helping to prevent their miles from expiring (by dropping say 1000 miles into their United account).
A Very Strong Card for Earning Points
Chase Sapphire Preferred is one of the very best cards for earning points based on spending. Now, the most leveraged thing you can do with your spending is get a new card with a big signup bonus (like this one), but when you’re deciding what card to put spending on that’s not going towards a signup bonus, this one is really strong.
In addition to the standard points-earning (you get a point per dollar on your spend, and as-described it’s a valuable point – plus it’s a Visa so I can use it even at my dry cleaner’s that doesn’t take American Express), you also get:
- Double points on travel and restaurant spending
- No foreign currency conversion fee
- Additional points for your online shopping through access to the Chase Ultimate Rewards mall, a mileage-earning shopping portal that often has the most lucrative opportunities to earn extra points for the online purchases you’d make anyway. I love the 2 extra points per dollar on Travelocity purchases, extra point per dollar at Expedia, and I love it when Drugstore.com gets up to 10 points per dollar spent.
There’s no annual fee the first year, my first year will be coming up shortly and I’ll be keeping the card even with the $95 annual fee.
The Chase Sapphire Preferred card is part of my one-two punch for most spending with the Starwood American Express card. If you use my link for the card, which offers the best bonus out there, then I will receive credit for the referral which I very much appreciate as well.