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Chase Ultimate Rewards offers plenty of value. However, some of the cards in the program don’t let you take advantage of the best redemption options, including transferring to a variety of travel partners. TPG Senior Points & Miles Correspondent Jason Steele shows you how combining a few different cards can help you maximize awards.
Are you getting the most value from your Chase cards? While the Chase Freedom and the standard (and now discontinued) Chase Sapphire card offer you valuable points, your redemption options are limited to cash back, merchandise and gift cards — not point transfers.
In today’s post, I want to show you how you can keep your existing Freedom or Sapphire cards, and transform the reward points you already have from valuable to invaluable.
The Two Tiers of Chase Ultimate Rewards Cards
Chase advertises its Freedom and (standard) Sapphire cards as offering rewards in the form of cash back. This is technically true, since reward points can be redeemed for one cent apiece as cash-back statement credits or even a check. But when you receive these cards and go to redeem your rewards, you’ll find that these cards are actually part of the Chase Ultimate Rewards program, just like Chase’s Sapphire Preferred and Ink Plus — and even the Palladium card offered only to private banking customers.
Dig a little deeper, and you’ll find that that there are actually two tiers to the Ultimate Rewards program. With cards that are in the basic tier (my term), your points are worth only one cent each toward cash back, merchandise, gift cards, travel reservations and other options.
Cards in this basic tier include:
- Chase Freedom
- Chase Ink Cash Business Card
- Ink Classic and standard Chase Sapphire (neither currently offered to new applicants)
The upper tier (also my own term) of the Ultimate Rewards program includes:
- Chase Sapphire Preferred
- Chase Ink Plus Business Card
- J.P. Morgan Palladium Card (for private banking clients)
- Ink Bold, J.P. Morgan Select (neither currently offered to new applicants)
Both lower-tier and upper-tier cards offer the same redemption options, save for two very important differences. First, with the higher-end cards, points can be transferred to travel partners (including British Airways, Southwest, United, Hyatt and Marriott) on a 1:1 basis.
The second difference is that with the higher tier, you can redeem points for 1.25 cents apiece toward travel reservations booked through Chase’s Ultimate Rewards program, as opposed to the 1 cent value for the basic tier.
Clearly, you can get more value out of your points if they’re earned with a higher-end card such as the Chase Sapphire Preferred. Luckily, though, if you have a higher-tier card in addition to a more basic one like the Freedom, you can transfer points between accounts to take advantage of the better redemption options.
Going for the “Chase Trifecta”
My long-term strategy for the Chase Ultimate Rewards programs has been to hold three different cards, the so-called Chase trifecta. So long as just one card is from the upper tier, you’ll always have access to point transfers and can purchase travel at the rate of 1.25 cents per point.
I always try to hold at least one card in the upper tier — either a Chase Sapphire Preferred or Ink Plus — and a card in the lower tier such as the Freedom or standard Sapphire (no longer offered to new applicants).
This way I get all of the unique benefits of three cards including:
- Freedom: 5x points on up to $1,500 of spending each quarter on select categories of purchases. For example, the bonus categories for the 1st quarter of 2016 (January – March) are for all purchases at gas stations and local commuter transportation including Lyft and Uber.
- Sapphire Preferred: Double points for all spending at restaurants and travel purchases.
- Ink Plus: 5x points from all office supply store purchases and telephone, television, and Internet service (up to $50,000 in combined purchases per year); 2x at gas stations and hotels (up to $50,000 in combined purchases per year).
- Ink Cash: 5x points from all office supply store purchases and telephone, television and internet service (up to $25,000 in combined purchases per year); 2x at gas stations and restaurants (up to $25,000 in combined purchases per year).
The beauty of this system is that the basic tier cards have no annual fee, so I really only have to pay the annual fee for a single card in the upper tier. And if I want to separate business expenses with my Ink Plus or Ink Cash cards for accounting purposes, I can still do so while transferring points to upper-tier accounts and redeeming them as I please.
Transferring Ultimate Rewards Points Between Accounts
The points you earn from each of your Chase cards remain in separate accounts, and your redemption options depend on the card linked to that account. Thankfully, Chase allows you to move your points from one account to another, instantly, and at no cost. Follow the steps below to move points from one account to another
1. Log in to your account and go to the Chase Ultimate Rewards page. Click on your points total and choose “Combine Points.”
2. Choose the account you are transferring points from and to.
3. Choose the number of points you are transferring, either the entire amount or some portion of the total.
4. Confirm your choice.
5. And you’re done!
Now your 10,000 points are worth $125 toward travel reservations with your Ink Plus card, rather than just $100 with your Freedom card or standard Sapphire.
Transferring Points to Travel Partners
While it’s nice to receive the additional 25% value from your points when booking travel directly through Chase, the best use of these points comes when you transfer them to travel partners.
For example, points transferred to Southwest Airlines are worth approximately 1.4 cents each toward flights in the carrier’s “Wanna Get Away” fare class, and double that if you use a Companion Pass (although points transferred from Chase Ultimate Rewards don’t count toward earning your Companion Pass). Transfer your points to British Airways Avios, and you can receive several cents in value when you book last minute, short-haul awards on partners such as American and US Airways. Another great option is transferring points to hotel programs like Hyatt, where it’s not uncommon to receive two cents in value per point.
Yet my favorite awards tend to be international business-class tickets from partners such as United, Singapore and even Korean, where I’m often able to get 4-6 cents in value per point redeemed. To see an approximate value of points and miles in each program, check out TPG’s latest monthly valuations.
Other Ways to Maximize Your Ultimate Rewards
1. You can move points to and from the accounts of a spouse or domestic partner, not just among the accounts you hold — Just be aware that you do have to designate a single individual, as you can no longer move points to just anyone. So if your significant other has an upper-tier card, you can transfer points to his or her account at will.
2. Points can be transferred to the airline, hotel or Amtrak accounts of your spouse or significant other — Your spouse or domestic partner doesn’t even need to have a Chase account to receive transferred points or miles in his or her frequent flyer, hotel or Amtrak account. You can transfer points from an upper-tier account to the loyalty program account of your spouse or domestic partner. Again, you do have to specify an individual as your spouse or domestic partner.
3. Be sure to transfer points out of a closed account — After you close an account, you will eventually lose any of the points associated with it. To avoid this, make sure to transfer all the points out of any account you are closing and into another active account, or to the account of your spouse or domestic partner.
4. Use a basic-tier card to “hibernate” your points. There are times when you just can’t justify paying an annual fee. When this happens, you can move all your points to one of your basic tier cards (or one held by your spouse or domestic partner) with no annual fee and keep them there indefinitely. Then, at a later time, you can re-apply for a Sapphire Preferred or Ink Plus card, transfer your points there and use them for point transfers or travel reservations at 1.25 cents per point. And in many cases, offers for the Sapphire Preferred and Ink Plus cards feature no annual fee for the first year.
Note that Chase may not approve your application for Ultimate Rewards-earning cards if you’ve opened more than four credit cards (from any bank) in the last two years — be sure to take this into consideration before closing a Sapphire Preferred or Ink Plus card account, and if you’re considering signing up for cards from other issuers, be sure to apply for Chase Sapphire Preferred, Freedom or Ink Plus first.
What are your favorite tips for getting the most out of your Ultimate Rewards points?
Chase Sapphire Preferred® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||Introductory Annual Fee of $0 the first year, then $95||0%||Excellent Credit|