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Maximizing Spend Bonus Categories With Chase Freedom and Sapphire Preferred Combo

by on March 28, 2012 · 67 comments

in Chase, Credit Cards, Ultimate Rewards

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Update: The Chase Freedom card no longer offers a bonus of 10% on all purchases plus a 10 point per transaction bonus. Instead, both of those benefits have been replaced with a 10% annual bonus at the end of the year on all purchases.

Update:  As of July 20, 2014, the Chase Sapphire Preferred Card no longer offers the 7% annual points dividend. View the current sign up offer here.

I’ve written before about the potential points bonanza from combining spending bonus categories on both the Chase Freedom and Chase Sapphire Preferred® Card, but I thought I’d write a little update since those categories change quarterly.

Like me, many of you might not pay too much attention to cashback cards in favor of focusing on points-earning cards instead because I find more value in earning points and miles that can be used for travel. With travel cards I generally get at least 3 cents per point in value, versus 1-2 cents usually earned with cashback cards.

However, the Chase Freedom card is a special case because rather than just giving you a cashback percentage on your purchases, you earn points which can then be redeemed for cashback checks…OR if you have a Chase Sapphire Preferred® Card or Ink Bold, you can transfer your points to your Ultimate Rewards account and then transfer to partners including United, British Airways, Korean Air, Southwest, Hyatt, Marriott, Ritz-Carlton, Priority Club and Amtrak. For a detailed post on why I love Ultimate Rewards, check here.

DETAILS
Here are the current details on the Freedom card itself:

Annual fee: $0
Sign up bonus: 20,000 points (which can be transferred to Ultimate Rewards partners) or $200 cashback with $500 spend within 3 months. There was a 30,000 points application link floating around, but it has been deactivated. You can always send them a secure message after applying asking for them if a 30,000 point offer is still available. Update: the current sign-up bonus for  the Freedom card is 10,000 points or $100 cashback.
Earning: 1 point per dollar spent, with rotating categories that allow you to earn 5 points per dollar, up to $1,500 in spend per quarter, and up to 10% cashback when shopping at certain merchants through the Ultimate Rewards shopping mall.

Here are the bonus spend categories for 2012. Spend is capped at $1,500 per quarter for the 5x:
Q1, January 1-March 31: Amazon.com and Gas Stations. This ends on Saturday, so if you haven’t maxed out your spend, you can buy gift cards from Amazon or your local gas station to get the bonus.

Q2, April 1-June 30: Grocery Stores and Movie Theaters

Q3 July 1-September 30: Gas Stations and Restaurants

Q4, October 1-December 31: Airlines, Hotels, BestBuy and Kohls

So, it’s a pretty good mix of everyday and specialized categories and merchants. Just remember, you do have to activate your card each quarter to be eligible for the spend bonuses.

SPEND SCENARIO
So let’s say you only use your Freedom card on the spend categories each quarter and you spend $6,000 total. You’d get 30,000 points (5%), which you could then transfer to United, British Airways, Korean Air, Southwest, Hyatt, Marriott, Priority Club, Ritz-Carlton or Amtrak.  Plus factor in the 20,000 sign-up bonus points and you’ve got a total of 50,000 points - all with no annual fee. That’s enough for two roundtrip coach tickets from the West Coast to Hawaii using Avios, or at least two nights in any Hyatt property in the world (even the top properties require just 22,000 points for a free night redemption). Or hey, simply take the cash back and walk away with an extra $500.

DOES IT MAKE SENSE FOR ME?
I don’t have the Freedom card myself yet because there have been other Chase cards higher on my priority list (like the Hyatt Visa which got me two free nights in a suite), but I have definitely been thinking about it for my next credit card application round. In my circumstances, I’d use the Freedom card for everyday spend in those bonus categories, and then the Chase Sapphire Preferred® Card for dining, travel spend (which includes hotels, taxis, parking, subway, etc) not in the Freedom bonus categories and internationally since the Chase Sapphire Preferred® Card doesn’t charge foreign transaction fees.

If you are just starting out with credit cards, getting a Freedom card can make a ton of sense because it helps establish a good relationship with Chase (the king of credit card rewards) and the points you accrue now can be converted into even more valuable points later when you build up your credit score to get a Chase Sapphire Preferred® Card or Ink Bold.

If you recently got the Chase Sapphire Preferred® Card, the general rule is to wait one month between Chase applications, but I know people have gotten approved for both at the same time when they called the reconsideration line. Not bad, since two applications from the same issuer will only be 1 hard inquiry on your credit. I don’t think this will work for everyone, but if you have strong credit and a good relationship with Chase, I suspect it’s more than possible.

There’s one final piece of the Chase Trifecta (the Chase Exclusives program which gives bonuses for having a checking account as well) that I’ll cover in a future post. In the meantime, feel free to share your experiences maximizing Ultimate Rewards points!

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • AKold

    I use my Freedom more than my Sapphire. If I get a quick bite to eat that’s under $10 ($9.62), I actually earn more points with the Freedom (1.1x + 10 with checking acct) than I do with the Sapphire (2.14x). It’s great for small purchases.

    My favorite transaction is paying 25¢ for parking in L.A. when I need to run quick errands … the meters here take Visa. Parking 4 times comes out to 41 pts/$. Things like these are why I earn between 5-6 UR/$ each month with this card.

  • Bryce Reynolds

    The Chase Exclusives program is what really makes the Freedom card shine. I use it every time I get a $0.95 cup of coffee at McDonald’s and receive 11.5 points for it, which is incredible. AKold’s suggestion about paying for parking is brilliant as well, since you still get the 10 pts/transaction with the Chase Exclusives program.

  • OFS

    Nearly all of my spending is on my Chase Freedom card. The only time it’s worth it to put it on the Sapphire card is if the transaction is at a restaurant/travel and it costs over $10. These two cards(w/ checking) have DRASTICALLY increased my point earning. Thanks, Chase!

  • Michael Stevens

    I came across another post about this yesterday and he said it might be possible to downgrade to the Freedom when your Sapphire Preferred annual fee comes due.

    http://www.frequentflyeruniversity.com/archives/1570

    Do you know if you can do that? I tried to downgrade to the Freedom from my Continental Card and Chase said no since the Continental card is branded.

  • Jason

    What are the chances on getting the 7% annual bonus on the 30k in bonus categories when transferred? Also, please explain the exlucisves program more, sounds great!

  • MikeJawn

    I do this now — it’s a brilliant strategy.

  • Guestivius

    I’ve been a Freedom holder for about 7 years now, and I love the card. As a college student, it was all I needed (and the occasional cash back was fantastic). It’s a card that I plan on having forever, because it gives me a bedrock account that’s been open for awhile, and helps to offset the (minimal) damage from churning through credit cards.

  • Guestivius

    This is true. The Chase Exclusives makes this card a real warrior. The $1500 cap on the rotating categories is kind of a bummer, but they do some unique stuff to make up for it.

  • Ericlipkind

    Additionally, if you spend on the Chase Freedom card and get the appropriate bonuses (per transaction, etc), you can then transfer those Ultimate Rewards to the Chase Sapphire Ultimate Rewards account and get the 20% discount on travel using UR, making them worth even more.

  • JD D

    is the spend scenario correct? if you spent $6000 on chase freedom, wouldn’t you get $1500 (max) * 5 points + $4500 * 1 point = 12,000 points? That is one thing that always bummed me out about the Chase Freedom is the $1500 max per quarter, am I misunderstanding the bonus criteria?

  • JD D

    I retract my comment :) i understand what your post is saying: $1500 * each quarter is $6k.. got it!

  • Eric

    Wouldn’t it make sense to use the Sapphire for all purchases as you get the 7% annual bonus on points earned?

  • Thomas

    My wife and I each have a Chase Sapphire – are we allowed to transfer reward points to another? Or, Are you allowed to transfer sapphire points from person A to person B’s hotel/air/etc account?

  • thepointsguy

    Both. You don’t even need to be related to transfer points between accounts. I have a friend who transferred points from her Freedom to my Sapphire and then I can transfer those point to anyone’s account

  • Dave

    No, because the 7% isn’t 7% per dollar, it’s per point.

    So if you spent $100 on the Freedom card @ 5% category, you’d get 500 points.
    If you spent 100 on the Sapphire @ 1%, you’d get 100 points. The dividend would give you 107 points at the end of the year.

    What will be interesting is – do you get the 7% dividend on points you transfer over from the Freedom to the Sapphire? THAT would be awesome.

  • Churnity

    The Chase Exclusives program easily beats that since it has a 10% bonus per dollar spent PLUS 10 pts per transaction. In fact, I use the freedom for ALL expenses under $10 even in dining categories. I’ve done the math, but the difference is miniscule and nothing to stress about.

  • Gary

    If you have all 3 of the components of the “Trifecta” does it still make sense to keep the purchases on the Freedom card to only those items that are under $10 or at that point is it wiser to put most of your purchases on the Freedom card (other than travel/dining). I’m just not sure why people want to keep their purchases to less than $10 on the Freedom card (other than the quarterly bonuses).

  • HikerT

    Sapphire Preferred earns 7% on UR mall earnings. If you generate a lot of UR points from the mall it becomes quite valuable and can pay for the annual fee. I’ve already earned over 100K at the mall since getting Sapphire Preferred last year. I only use my Freedom for ~6K of annual spend (to max out the 5%). The hassle of maintaining a Chase checking account isn’t worth it to me for a 10% bonus on ~6K of spend (only 600 points) but I suppose 10 points per transaction id worth it if you would use it for enough transactions (once a day would be 3650 points per year).

  • arcticbull

    More importantly, Freedom points can only be used for cash-back, but if you have the Sapphire Preferred you can transfer to travel partners like Hyatt and United. Then you get way more than 1 cent per point in value. You can stay at Hyatt’s top properties for just 22,000 points if you convert to Hyatt, but it would take easily 90,000 Freedom-only points to stay.

  • arcticbull

    Looks like there’s a link out there somewhere for $250 that’s still valid too…

  • Blase73

    Yep, I try to remember to use my Freedom card when I buy my daily $1.08 diet cokes at McD’s!

  • Joe

    Michael – don’t offer to downgrade. read TPG or View from the Wing’s posts on asking for statement credits or spending plans for future months before offering to downgrade!

  • Samuel
  • arcticbull

    And there it is!

  • James7811james

    I’m able to rack up a lot of transactions at youaregreat.us, since they bill the CC in 8¢ increments

  • Bender

    I agree the annual Sapphire dividend including points transferred from Freedom would be sweet but Flyertalk reports seem to be pretty consistent that they are NOT included. still a good play for me though.

  • Sean Buchanan

    HikerT can you please explain what the “hassle” is with a Chase checking account? I opened one up about 6 months ago, transferred in $1500 to avoid fees and have simply forgotten about it. It’s never caused me a problem and only increased my UR earning potential exponentially because of the Chase Exclusives program.

    Actually when I get a statement in the mail I’m confused sometimes b/c I’ve completely forgotten about it.

  • Sean Buchanan

    I further augmented my Chase plan and picked up the Ink Bold. 5X on Phone, Satellite, Cable, Cell, Internet as well as 5X on every $100 Visa Gift Card I bought at Staples, that I then used for groceries, is a points bonanza.

    With the Ink, Freedom and Sapphire combined I got almost 10K points last month. Should easily rack up 100K points a year without even trying.

  • PJ

    If you are in the points hunting it seems there is no excuse not to have Chase Freedom and Sapphire Preferred along with a Chase checking account with $1500 to dodge the monthly fees and to enjoy the 10/10 ( 10 % more points. 10 points each swipe)= that is Banking with Chase 101

    Also think about the interest rebate on your loans ; $200 signon bonus on a no fees ( nada) freedom card, 50K for a new Sapphire. My friends also got the new checking account sign on bonus ( $150 and $200..sry taxable) . To fully leverage the quarterly 5% rebate, you can even stock up Amazon gift cards or gas gift cards in 1st quarter, grocery cards or gas cards at grocery stores 2nd quarter , gas again 3rd quarter and prepay timeshare maintenance fees 4th quarter etc Isnt it a good idea to have MULTIPLE freedom cards in your family? I would not miss other goodies from Chase such as United Exploer , Hyatt , Southwest cards, and INK BOLD ( if i have own busniess) = that is Banking with Chase 201.

    I would also urge you all to talk your siblings friends grownup children to join the points hunting . My last booking with United was a nonstop r/t flights west coast-east coast over Memorial weekend which would cost ~$600 if not with the 25K UA miles which could be trasnferred from CHase UR with 1 to 1 ratio..

  • PJ

    Mcdee has $59 CENTS coffee for seniors 55+ that is wonderful

  • PJ

    answer is get multiple cards ; i do have VISA AND MASTER in my own name
    I just busted my $1500 cap on one card also they give you $200 along with new card after LOW spend

  • HikerT

    Yep, that’s the kind of hassle I’m talking about. Jumping thru hoops to avoid fees. My last Chase checking account was cancelled after 6 months for not maintaining activity. For me, that extra 600 points is just not worth it. I can buy UR from friends at 1 cent, so that’s $6, but even if you value UR at 2 cents, that’s worth $12, lol. If you do a lot of small transactions, the extra 10 points per transaction might be worth it but the 10% is definitely not worth it unless you put a lot of spend on the card – but why would you do that for 1.1%? I would rather put big spend on my DL reserve or another card that earns a higher bonus for big spend. I think a lot of people miss the forest through the trees here. Sign up bonuses, shopping mall bonuses, and large spend bonuses generally dwarf this stuff.

  • HikerT

    Yep, that’s the kind of hassle I’m talking about. Jumping thru hoops to avoid fees. My last Chase checking account was cancelled after 6 months for not maintaining activity. For me, that extra 600 points is just not worth it. I can buy UR from friends at 1 cent, so that’s $6, but even if you value UR at 2 cents, that’s worth $12, lol. If you do a lot of small transactions, the extra 10 points per transaction might be worth it but the 10% is definitely not worth it unless you put a lot of spend on the card – but why would you do that for 1.1%? I would rather put big spend on my DL reserve or another card that earns a higher bonus for big spend. I think a lot of people miss the forest through the trees here. Sign up bonuses, shopping mall bonuses, and large spend bonuses generally dwarf this stuff.

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  • PJ

    are you getting away from fees on VIsa Gift cards ?

  • PJ

    catch this: sooner or later Chase will ask you to set up DIRECT DEPOSIT for $150 ( taxable) ; an ACH deposit from your account away is all it takes

    remember ; with some banks paying .005% on your savings account you dont lose much on $1500 idle money to rake in more United Mileage Plus miles

    refer to my previous posting :)

  • PJ

    I would not let friends cash in a point for a penny; I explain to friends how valuable when those points can be used for travel and talk them into applying Sapphire Preferred . If they insist I stand ready to buy each points at 1.25 cents or treat them for next dine out . Mathwise: 25K UR costs me 312.5 how often can you pull off a nonstop r/t EWR-SNA ( LAX or SFO) for that price after the mileage award adjustment ? A United $1100+ r/t to China and Taiwan is doable with 65K UA miles.. Let’s all face it : award ticket DOES have more flexibility than non refundable ticket

    T0 me it does not take much to have the best of each world : signon bonus plus the pleasure for getting 10/10 from Chase Exclusive program plus shopping at UR Mall . In a normal month those 60 -70 times usages a month can add up t0 8000 points . In the meanwhile I can not get enough credit cards with signon bonus other than getting a new card about every 2-3 months each from Chase, Citi or Amex – about 3 cards max in 3 months

  • PJ

    none transferred points DO NOT cout
    i know for sure since i had 100K+ sitting on Freedom Visa and Master card on the day Sapphire Preferred came out. not usre if anybody got the 7 % on 50K original bonus AND the 50K courtesy adjustment when the original signon bonos was 50K and the next 50K was the goodwill adjustment after we called in for the bump

    I got 7 % on 50K only

  • RobM

    How come no one is booking hotels through UR and getting points for the stay as well ?
    Is there something I am missing here ?

  • AC

    That’s my question as well. There is a fee to buy/activate the Visa Gift card so I don’t know if the fee is justifiable.

  • Andy

    could i get sign-up bonus for both cards?

  • PJ

    are you saying you are paying 8 cents many many many times with your Chase Freedom cards without getting yellow flags? ie blacklisted

    I would not dare to mess around with Chase that way

  • PJ

    yes why not YOU is YOU your spouse is your spouse. In my case , I myself have had Chase Visa and Master card for a long long time. Back then I needed two cards to buy grocery and gas( only two categories and all year around) since each card was capped with $300 rebate annually. I talked a few families into 2 Sapphires 2 freedoms ( was $300 a few months ago) plus 2 checking accounts (taxable bonus $200 and $150) . Each family raked in about 150K+ United miles enough for 2 free r/t tickets to Far East with stopover plus a few free Hyatt nights thanks to Chase

  • PJ

    Dont waste your MR points over those you are better with paying cash for them
    stick with trasnfers to United or Hyatt or Southwest I assume Amtrak is fine tho i have no experience on it.
    I do think Chase UR point is worth > 1.50 cent each

  • http://twitter.com/layshasha Sasha Li

    hi guys, i used to have a chase buy.com credit card which then phased into a chase freedom card automatically so i didnt get any sign up bonuses for chase freedom. will i qualify to get any sign up bonuses if i were to cancel this current freedom card to swap for this freedom card offer? (i already have the max of 3 chase credit cards at the moment). any help will be appreciated. thanks!!

  • HikerT

    60-70 transactions in a normal month? I just checked my yodlee account (which tracks all my spending) to see how many sub $20 credit card transactions I did last year. It turned out I did roughly 1 per day. The average transaction was roughly $10. That translates to a spend of $3650 on those transactions. What did I give up by not getting lost in the minutia of 10/10? Well, I would have earned 365 x 10 + $3650 x 1.1 = 7665 points. Even if I valued UR at 1.3 cents that’s a whopping $100. Instead I used a 2% cash back card which earned roughly $75 on that spend. So short story, I gave up a whopping $25 but YMMV if you actually do twice as many transactions in a month.

  • Sean Buchanan

    No, I just pay the fees. And actually I buy the $200 gift card at Staples which has a $6.95 service fee. I justify it this way:

    Normal $200 spend at Walmart = 200 points

    Staples $200 Gift Card + $6.95 fee = 1,034.75 points (206.95 x 5)

    So for $6.95 I get an extra 834.75 points meaning I’m buying those UR points for .008 per point. That’s just a no-brainer in my book.

    Also, I checked my spending categories on Chase and Walmart counts as a grocery store so for Q2 I’ll just use my Freedom there since that’s where we do all our grocery shopping

  • http://www.clarkecomputer.com/ Charles Clarke

    You can transfer the Freedom points from anyone’s account to anyone else’s, but when you do, they say that you are only supposed to do it to a spouse or domestic partner.

  • thepointsguy

    I did it all online and it never said that about spouse/domestic partner
    ultimaterewards.com -> Manage points -> Combine points

  • anon

    I just hope with all the chase UR points frenzy and UA being the preferred transfer partner for most people, that the UR points don’t get devalued like some of the other airline points. It will beat the entire purpose.

  • Jon

    Bad idea. Chase will eventually notice and you’ll be blacklisted.

  • Jon

    Not bad. But I like my scheme better. Use Ink Bold to buy OfficeMax gift cards via UltimateRewards.com shopping portal to officemax.com. That will currently net 10 points/dollar. Next, take the OfficeMax gift cards to your local OfficeMax store and use them to buy any non-OfficeMax gift cards you want.

  • Jon

    Gary – you earn 10 points per transaction on the Freedom card if you have a Chase checking account. That means you maximize your points if you put all transactions $10 (you earn 2x points on dining/travel). And the other main reason you want to keep the Sapphire Preferred is because that’s what will allow you to transfer Ultimate Rewards points into airline miles or hotel points.

  • Simek

    That is what I’m afraid will happen. I think Chase may be biting off more than they can chew, and eventually–after building up a large installed customer base, of course–they’ll have to bring their award programs into line with reality. See item #3 in another (rival) blog:

    http://millionmilesecrets.com/2012/03/21/chase-sapphire-preferred/

  • James7811james

    I called chase and asked them (sapphire executive line) and asked them if it was okay. they rep was clear and emphatic that the freedom card allowed unlimited 10-point transactions. It would seem unrealistic that Chase would revert to bullying tactics if everything is being done upfront and transaparent. Furthermore would it not be a prime-time consumer rights lawsuit if Chase pushed a a promotion (in this case unlimited transaction bonus points) only to penalise the customers who actually follow through?

  • BryantNE

    Sorry to be the noob here…but why is this a good deal? Because you’re earning 11 points everytime you charge .08$? so you’re paying less than a penny per point?

  • http://www.tukwilatalk.com Chuck Parrish

    I have Chase Sapphire Preferred, Priority Club and Southwest Air.Yesterday, I called Chase and cancelled my Brtisih Airways card after 11 months. Chase offered to credit my account the full $95 to keep the card. I appreciated the offer but I gave it a good 11 months; not the right card for me. Cancelling now minimizes the hit on my overall credit card history as it was only 11 months. I immediately applied on line for the 50k-60K Chase United Explorer and the Chase Freedon 25k Ultimate Rewards card. The Freedom card will dovetail nicely with the Chase Sapphire Preferred and, because it has no annual fee, it will be a keeper. I waited a couple of hours and then called the reconsideration line. Within 2-4 minutes, I had approval for both cards and am having the cards expedited to me as I headed off for a long trip. I keep all cards well below 9% of CL, both individually and cumulatively and have all cards paid automatically so that there is no chance of a late payment. I appreciate how Chase handles my transactions. I also appreciate the heads up comments of TPG and D. Dubash with Million Mile Secrets which cued me to look into these cards. I have surprised myself by pulling in almost 400k air miles, hotel points and credit card points in the past 12 months. Attending Chicago Seminars in Oct.

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  • JudithB

    I’m Canadian, but I have a US address and bank account. Is it worth it for me to try for this or would the categories not apply to me because I’m in Canada?

  • wonderct

    With the 10/10 – if you’re a restaurant and say the bill is $100. Can you charge $9 on the Freedom and the remaining $91 on the CSP? Is this something Chase would catch on to (with consequences) or would they not care?

  • Ddawk1504

    any thoughts on how to best maximize the bonus categories via buying gift cards @ grocery stores? I shop primarily at kroger, randals and central market. Is it best to buy the visa gift cards and then just utilize those for gas, groceries etc? Also since one of the upcoming Freedom categories is Travel it seems more adventitious to utilize the freedom @ 5x for travel then 2x on sapphire preferred, am i missing something here as to why i should use sapphire instead?

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