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Key Link: Chase Sapphire Preferred Card
Chase Sapphire Preferred was the best all-around, most rewarding personal credit card for 5 years. If you’re just getting started in the hobby, it’s the card you should get.
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
The Chase Sapphire Preferred card is towards the top of wallet for the first two of those criteria — one of the very best signup bonuses, 50,000 points after $4000 in spending within 3 months plus 5000 more points for adding a free authorized user to the account and making a purchase within that same timeframe, and that’s an exceptionally good offer because their points are among the two best currencies of any loyalty program. You also get double points earning in that most valuable of programs on all travel and dining spending.
Chase Sapphire Preferred has even upped its game in benefits for carrying the card. I always found it useful for travel protections, I cracked the screen on my phone, it cost me over $300 to fix, and the card’s insurance coverage paid me back. They’ve added primary collision damage when you rent cars. You earn double points on the rental, and get collision coverage — you may not even have to inform your own insurance company if you damage the rental vehicle. And I like that for trip delay coverage you only need to have paid for a portion of your roundtrip ticket with the card.
Transferring Chase Ultimate Rewards Points to Airline and Hotel 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, Southwest Airlines, British Airways, Virgin Atlantic, Singapore Airlines, Korean Air, Air France KLM
- Hotels: Hyatt, Ritz-Carlton, Marriott, IHG Rewards Club
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.
Usually I think of United, Korean and Singapore as the best values for points transfers.
United gets you all of the Star Alliance with no fuel surcharges.
Singapore Airlines Airbus A380 Suites Class
And Korean Air is fantastic because their first class awards are plentiful, too, and generally not accessible through most partner programs so there’s little competition for the seats.
Plus, just as British Airways gets you access to oneworld partner flights, Korean will get you access to Skyteam partner flights. They offer 80,000 point roundtrip business class awards between the US and Europe on Skyteam airlines, albeit with fuel surcharges
Further, points to several of the programs transfer literally instantly, and it’s useful for helping to prevent miles from expiring (by dropping say 1000 miles into a 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 earns extra points for the online purchases you’d make anyway.
Why You get Started With Chase Sapphire Preferred vs. Sapphire Reserve
This year Chase introduced the Sapphire Reserve Card for a short while longer it has a 100,000 point bonus after $4000 spend within 3 months of cardmembership, earns triple points on travel and dining, and comes with a Priority Pass Select card for airport lounge access.
The Sapphire Preferred’s annual fee is $0 the first year then $95. The Sapphire Reserve Card’s annual fee is $450, and it applies from year one.
The Chase Sapphire Preferred Card is best for getting started in the hobby. There’s a pretty big hurdle for getting someone to commit to a $450 annual fee card. Sapphire Preferred lets you try it for a year, and then if you like it keeping it is only $95.
Sapphire Reserve comes with a $300 annual travel credit. That’s calendar year statements, not cardmember year. So most people will be able to get the travel credit twice in their first annual fee (cardmember) year.
Sapphire Reserve authorized users cost $75, but authorized users do receive Priority Pass Select cards on request as well so there’s value there. Sapphire Preferred authorized users do not come with a fee, and if you add one during your first three months with the card and make a purchase you get 5000 bonus points.
There’s a higher hurdle for being approved for a Sapphire Reserve card, another reason Sapphire Preferred can be better for someone starting out. Sapphire Reserve is a Visa Infinite card and that starts with a minimum credit line of $10,000. Sapphire Preferred needs you to be approved for $5000 in credit.
If you’re considering one of these cards, look at whether you’ve had 5 or more new cards in the past 24 months. That doesn’t prevent everyone from getting approved, but it does prevent many people. I’ve heard reports of approvals for people with more new cards than that, usually with high incomes and credit scores, pre-approved in-branch.
For someone who can get approved for a Visa Infinite, and who spends heavily on travel and dining, I think Sapphire Reserve is worth it. For someone starting out, and far from 5 new cards within the past 2 years, I think getting Chase Sapphire Preferred Card first makes sense… and then getting Sapphire Reserve Card later.