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Having the right credit cards goes a long way in maximizing award travel, as many cards earn you valuable bonus points on select purchases in addition to sign-up bonuses. Below, TPG Senior Points & Miles Contributor Jason Steele explains why three travel-rewards cards from Chase are especially solid options for earning and redeeming free travel.
As award travel programs continue to change, the one constant remains the value of points that you can transfer to multiple travel partners. Of these flexible reward programs, Chase Ultimate Rewards continues to offer outstanding value. So in today’s post, I want to outline the best credit card strategy for earning as many points as possible this year from Chase Sapphire Preferred, Chase Freedom and the Ink Plus Business Card.
Why Chase Points Are So Valuable
According to TPG’s latest monthly valuations, Chase Ultimate Rewards points are worth 2.1 cents each. This is more than nearly all airline miles, but that only begins to tell the story of why these points are so valuable.
1. Great airline transfer partners — Chase has six airline partners that you can transfer your points to at a rate of 1:1. And while six partners might not seem that great compared to the 30-plus Starwood partners, 16 American Express Membership Rewards partners and 12 ThankYou Rewards airline partners, Chase Ultimate Rewards happens to have a particularly strong selection.
The ability to transfer points to miles with both United and Southwest is exclusive to the Ultimate Rewards program, and I find Southwest to be extremely valuable for domestic and family travel, especially when you have a Companion Pass. United’s program is also extremely strong for award travel to Europe and the Middle East using its numerous Star Alliance partners.
Singapore is also a solid option for Star Alliance travel, and Korean Air SKYPASS is a great partner for SkyTeam awards (once you get past its difficult award-booking process). British Airways still offers tremendous value for short-haul flights on American, Alaska and other partners, while Virgin Atlantic miles can get you decent value in some situations. But most importantly, these airlines cover all three major airline alliances, plus two valuable partners that are not part of any alliance.
2. The ability to transfer points instantly — One of the flaws of both the Starwood Preferred Guest and Citi ThankYou points programs is that it can take several days to transfer your points to travel partners. And while some American Express Membership Rewards transfers happen instantly, some don’t.
With Chase Ultimate Rewards, nearly all airline transfers are instant, with only Singapore transfers taking longer (but still usually the same day). On the hotel side, Hyatt tends to be the most valuable partner, and those transfers are instant as well. While the ability to perform an instant points transfer doesn’t sound like a big deal, it can be essential in booking scarce award space before someone else snatches it up.
3. Great hotel partners — Hyatt is the real standout here when it comes to value, but IHG can be excellent as well, especially if you’re booking a Points Break award. Finally, it’s always nice to have the option of Marriott and Ritz-Carlton when you need to top off one of those accounts.
4. Other travel rewards options — Ultimate Rewards points are worth 1.25 cents each toward any airfare, hotel, car rental, cruise or activity booked through Chase’s portal. In contrast, American Express Membership Rewards points and Citi ThankYou points are worth only 1 cent each toward travel reservations, although Citi points are worth more for airfare when you hold the Citi ThankYou Premier Card or the Citi Prestige.
5. The ability to transfer points between cardholders in your household — Although it’s not as generous as it was years ago when you could transfer points to anyone, it’s still very valuable to pool points among household members. American Express Membership Rewards no longer allows this, though Starwood does. It’s also worth noting that Citi lets you transfer ThankYou points to anyone.
Why These Three Cards?
The Chase Sapphire Preferred, Freedom and Ink Plus cards comprise what some have called the “Chase trifecta.” These three cards really allow you to maximize the Ultimate Rewards points you can earn from sign-up bonuses and everyday spending. It’s also advisable to apply for these cards in this particular order because of Chase’s application restrictions.
The Sapphire Preferred currently offers new applicants 50,000 bonus points after making $4,000 in purchases within the first three months of account opening. You’ll get an additional 5,000 points if you add an authorized user and they make a purchase within the same three-month timeframe. The card also earns you 2x points on all travel and dining purchases, which adds up very quickly for frequent travelers and those who eat out a lot. Plus, Chase Sapphire Preferred comes with some great travel and purchase protection benefits, such as primary car rental insurance.
There’s a $95 annual fee for this card (the first year is waived), and no foreign transaction fees. If you don’t already have it, this should be the first card you apply for in 2016.
Chase is currently offering a $150 bonus to new cardholders who spend $500 within three months of account opening, but this bonus comes in the form of 15,000 Ultimate Rewards points that can be transferred to your Sapphire Preferred or Ink Plus account, and then be transferred to travel partners. You also get a $25 bonus (2,500 Ultimate Rewards points) when you add an authorized user who makes a single purchase within the same three-month period.
This card offers 5x points per dollar spent at merchants in featured bonus categories on up to $1,500 spent each quarter. The bonus categories for 2016 include gas stations, grocery stores, restaurants and holiday shopping. There’s no annual fee for this card, but it does have a 3% foreign transaction fee, so you’ll want to leave it at home during foreign trips.
Ink Plus Business Card
This is Chase’s top-of-the-line business card that earns Ultimate Rewards points, and it currently offers 60,000 bonus points after new applicants spend $5,000 within three months of account opening. But its most amazing feature is the ability to earn 5x points at office supply stores and on cellular phone, landline, internet and cable TV services on up to $50,000 in combined purchases each account anniversary year. Furthermore, you’ll earn 2x points at gas stations and on hotel accommodations.
Other benefits include purchase protection, return protection and an extended warranty. There’s a $95 annual fee for this card, and no foreign transaction fees.
As for why you should add these three cards sooner than later, Chase has recently tightened its card application restrictions for Ultimates Rewards-earning products. If you’ve opened more than five new credit cards in the past 24 months, your chances of getting approved are very low. So if you have other cards on your wish list, it’s worth bumping these three to the top of your application pile.
Adding It All Up
Everyone uses credit cards differently, but it can help to come up with a conservative estimate of how many points a typical cardholder might earn in 2016 using these three cards. Here’s a look at how many points you could earn during the first year with each of these cards — for more information, see our posts on a year of earning and burning with the Chase Sapphire Preferred and the Chase Ink Plus.
Sign-up bonus: 50,000 points plus 5,000 for adding an authorized user.
Regular spending: $500 a month on travel and dining (2x points), $1,000 per month on other charges (1x): 24,000 points
Total for the first year: 79,000 points
Sign-up bonus: 15,000 points or $150 plus 2,500 points or $25 for adding an authorized user.
Maxing out bonus categories each quarter: 30,000 points per year
Total for the first year: 45,250 points
Sign-up bonus: 60,000 points.
Spending $300 per month on cellular phone, landline, internet and cable TV services: 18,000 points per year
Spending $100 per month at office supply stores: 6,000 points per year
Spending $100 per month on gas: 2,400 points per year
Total for the first year: 86,400 points
Total points in the first year: 210,650 points!
As you can see, it’s pretty easy to use these three cards to earn more than 200,000 Ultimate Rewards points in your first year, and the possibilities for spending those points is nearly limitless. With points valued at 2.1 cents apiece, you’re looking at well over $4,200 in value — but that’s a conservative estimate. This haul of points is more than enough for a round-trip business-class ticket to just about anywhere in the world, which can easily be worth more than $5,000.
The annual fees for these three cards total just $95 for the first year and $190 each year after. And even with the figures I used for my example, you’d still be looking at earning more than 80,000 points per year for a total cost of less than 0.25 cents a point when the annual fees are figured in.
With this strategy, you’d also end up holding three cards, two of which feature outstanding travel insurance and purchase protection policies and no foreign transaction fees. Award travel programs are constantly changing, but the Chase trifecta remains key to a good points and miles strategy. Just make sure you apply soon — before other cards — so you can get approved based on Chase’s restrictions.
Which card is your favorite for earning and redeeming Ultimate Rewards points?
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards