Chase’s Pay Yourself Back feature gets even better with a new option for Freedom cardholders

5d ago

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Editor’s note: This guide has been updated with the latest information. Starting July 2, 2021, the Chase Freedom lineup of cards will offer a new Pay Yourself Back redemption option at a rate of 1.1 cents: Dining purchases (up to $250) through Sept. 30, 2021 


Here at TPG, we value Chase Ultimate Rewards points at 2 cents apiece when maximized with transfer partners thanks to the program’s fantastic travel partners.

For instance, in the past, I’ve transferred 30,000 Ultimate Rewards points instantly to Hyatt for an award stay at the Park Hyatt Paris Vendome, when the cash rate exceeded $1,000 per night. As a result, my redemption value far exceeded TPG’s 2-cent valuation of Ultimate Rewards points.

More recently, however, I’ve booked travel directly through Chase Ultimate Rewards, including flights and experiences — both at a lower redemption rate of 1.5 cents per point (with the Chase Sapphire Reserve). With healthy frequent flyer and hotel program balances, I found those redemptions to be a good use of my Ultimate Rewards points at times.

During the pandemic, Chase introduced another option to redeem points at up to 1.5 cents per point in value even when you aren’t traveling via the Chase Pay Yourself Back feature. It was introduced as a potentially limited-time pandemic feature with an end date, but that’s been extended until Sept. 30, 2021.

Starting on July 2, 2021, the Chase Freedom lineup of cards — including the Chase Freedom Flex and Chase Freedom Unlimited — will have a new Pay Yourself Back option. You can use Pay Yourself Back at a redemption rate of 1.1 cents on dining purchases (up to $250) through Sept. 30, 2021.

That’s a 10% bonus compared to the typical cash-back redemptions at a fixed 1 cent per point.

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Statement credit options

Chase has long offered the option to redeem points for a statement credit — simply log into your Ultimate Rewards account, hit the drop-down menu and select “Cash Back.”

You’ll be presented with an option to enter the amount you’d like to redeem and where you’d like your rewards deposited. All cash-back redemptions are fixed at 1 cent per point, only half of TPG’s valuation for Ultimate Rewards.

You can redeem Ultimate Rewards points for cash back at 1 cent apiece (Screenshot courtesy of Chase)

Even so, Chase’s traditional cash-back option is more generous than what you can expect from some other issuers. Here’s how it breaks down for some of the most popular programs and cards:

Program Redemption value Cards
Amex Membership Rewards 0.6 cents per point American Express® Gold CardThe Platinum Card® from American Express
Chase Ultimate Rewards 1 cent per point Chase Sapphire ReserveChase Sapphire Preferred Card
Citi ThankYou Rewards 0.5 cents per point (1 cent with Citi Prestige® Card) Citi Premier® Card Citi Rewards+® Card
Capital One 0.5 cents per mile Capital One Venture Rewards Credit Card

The information for the Citi Prestige card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

What is Pay Yourself Back?

In 2020, Chase added a far better option for customers looking to redeem points for expenses outside the realm of travel.

Cardholders with the Chase Sapphire Preferred Card, Chase Sapphire Reserve, Chase Freedom (no longer available), Chase Freedom Unlimited, Chase Freedom Flex, Chase Ink Plus Business Credit Card (no longer available) and the Ink Business Preferred Credit Card can use points at a higher ratio to cover the cost of some types of expenses. Branded as “Pay Yourself Back,” Chase’s new program lets you use your Ultimate Rewards points to offset certain purchases at a much more favorable rate.

The program currently has different timelines and eligible purchases for each card type. Here are some current Chase Pay Yourself Back options:

Card Redemption value Categories  Current end date
Chase Freedom Flex and Chase Freedom Unlimited 1.25 cents per point Select charities Sept. 30, 2021 (Dec. 31, 2021, for charity option)
Chase Freedom Flex and Chase Freedom Unlimited 1.1 cents per point Dining Starting July 2, 2021 through Sept. 30, 2021 (up to $250 in dining purchases)
Chase Sapphire Preferred 1.25 cent per point Dining, grocery stores, home improvement stores, select charities, fund a vaccine ride with Lyft Sept. 30, 2021 (Dec. 31, 2021, for charity option)
Chase Sapphire Reserve 1.5 cents per point Dining, grocery stores, home improvement stores, annual fee, select charities and fund a vaccine ride with Lyft Sept. 30, 2021 (Dec. 31, 2021, for annual fee and charity options)
Ink Business Preferred 1.25 cents per point Shipping, home improvement stores, select charities and fund vaccine ride with Lyft June 30, 2021 (Dec. 31, 2021, for charity option)

 

The way this would work is rather than receiving a statement credit of $100 when redeeming 10,000 points, if redeeming against an eligible Pay Yourself Back charge, a Chase Sapphire Reserve customer would receive a credit of $150 for the same redemption amount. This is the same redemption rate offered on Ultimate Rewards Travel redemptions for that card.

Related: Sweet spots: The best ways to use Chase Ultimate Rewards points

As for customers with other cards, Chase Freedom (this card is no longer open for applications), Chase Freedom Unlimited and Chase Freedom Flex cardholders can redeem points at 1.25 cents apiece toward donations made to eligible charitable organizations through Dec. 31, 2021.

Requesting a credit

Simply log into your relevant Ultimate Rewards account via mobile app or desktop and select the “Pay Yourself Back” option in the sidebar.

(Screenshot courtesy of Chase)

Next, you’ll see a list of eligible purchases you can redeem points for. Points can be redeemed for purchases as far back as 90 days, at a rate of 1.5 cents each for Sapphire Reserve cardholders and 1.25 cents if you have the Sapphire Preferred. The example below is based on redemption rates for a Sapphire Reserve Card.

Simply check off the purchases you want to redeem and proceed to the next page.

(Screenshot courtesy of Chase)

You can choose to offset the full purchase amount, assuming you have enough points to cover it, or you can redeem a smaller amount if you prefer.

(Screenshot courtesy of Chase)

From there, you can confirm the redemption value and amount and choose to complete the transaction. And that’s it! Your statement credit should post within three business days.

Bottom line

Does it make sense to redeem Chase Ultimate Rewards points at up to 1.5 cents apiece towards non-travel charges, which is at least 25% shy of TPG’s 2-cent valuation?

It absolutely can make sense. Even TPG staffers who love to maximize their points for travel have done this in the last year with travel larger on the back-burner. For example, TPG Editorial Director Scott Mayerowitz cashed in over 300,000 Chase points in 2020 … for over almost $5,000 worth of meals and groceries. It’s hard to criticize keeping thousands of dollars in cash safely in your wallet, even if you could redeem them for a higher value towards travel later on.

But ultimately, that decision comes down to how you plan to use your points, how many you currently have with airline and hotel programs, and whether or not you’d benefit significantly from the statement credits.

If you’re hoping to use your points for a premium-cabin trip in the not-too-distant future, it could certainly make sense to hold onto your points and transfer them to partners down the line. On the other hand, if you don’t plan to travel soon, or you’re worried about your financial situation, redeeming points at up to 1.5 cents each is surely preferable to carrying a balance or cutting back on essential spending.

Additional reporting by Summer Hull and Chris Dong. 

Featured photo by John Gribben/The Points Guy.

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