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Update: Some offers mentioned below are no longer available. View the current offers here: Citi Double Cash Card
If you’re just getting started with earning points and miles, you’ll quickly find that transferable points are incredibly valuable for earning and redeeming with a wide variety of travel partners. American Express, Chase, Citi and Starwood Preferred Guest all offer transferable point programs, but today let’s focus on Chase Ultimate Rewards.
Ultimate Rewards points routinely rank highly in TPG’s monthly valuations, currently holding steady at 2.1 cents apiece. The only transferable currency to top that is SPG’s Starpoint (with a valuation of 2.7 cents), but the straightforwardness of Chase’s Ultimate Rewards could make this program a better place to start for points and miles newbies. Plus, with the Chase Freedom Unlimited Card offering a solid return on everyday spending, learning to maximize your UR points earnings can definitely come in handy. Read on for details on why this card and the Chase Sapphire Preferred make a powerful duo that can jump-start your award travel.
Why These Two Cards?
I’ll break down the full benefits of each product below, but here’s a quick explanation of why you’ll want to start with these two cards in particular. The number one reason is that Chase limits the number of credit cards you can successfully apply for with its “5/24 rule” — basically, if you’ve opened five or more accounts in the past 24 months, it’s very unlikely you’ll be approved for several of the most popular cards in Chase’s portfolio, including Freedom Unlimited and Sapphire Preferred.
If you’re just starting out, though, this likely won’t be a problem. Still, it’s best to cover the most important bases first. When it comes to Chase cards, Sapphire Preferred should probably be your first application, since it earns you a very valuable 2 points per dollar on dining purchases and a wide variety of travel spending — equal to a 4.2% return based on TPG’s valuations. It also allows you to transfer points to a variety of travel partners.
As for the Chase Freedom Unlimited card, it makes a good second application because of the high return you’ll get on everyday, non-bonus-category spending. The card offers an uncapped 1.5% cash back on all purchases, but as I’ll discuss that can equate to 1.5x Ultimate Rewards points per dollar — a great earning rate for a card with no annual fee.
Chase announced this no-fee cash-back card back in early 2016, and it’s gained plenty of attention for good reason: It earns a flat, uncapped 1.5% back on all purchases. Here’s a full rundown of the product details.
Current Bonus: $150 back after you spend $500 in the first three months of account opening.
Benefits: Unlimited 1.5% cash back on every purchase. 0% intro APR on purchases and balance transfers for 15 months (after that 16.99% – 25.74% Variable APR applies).
Annual fee: $0
Reasons to get it: The ability to get 1.5 cents back for every dollar spent is nothing to sneeze at, but other cash-back cards like the Citi Double Cash Card get you a better return. With this Citi card, you’ll get 1% cash back per dollar spent, and then another 1% cash back as you pay down your balance. What really makes the Freedom Unlimited worthy of a slot in your wallet is the fact that you can redeem your cash back as Ultimate Rewards points, which get you a better return than 1.5 cents per dollar spent since TPG rates them at 2.1 cents apiece. That means 1.5% cash back becomes 1.5x points on all purchases — a return of 3.15%!
Current bonus: Earn 50,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. That’s $625 in travel when you redeem through Chase Ultimate Rewards.
Benefits: 2 points per dollar on travel and dining, no foreign transaction fees, primary auto rental insurance, trip cancellation coverage and the ability to transfer to 13 travel partners, including British Airways, Hyatt, Marriott, Southwest and United.
Annual fee: $0 for the first year, then $95
Reasons to get it: Earn 2x points on travel and dining at restaurants — equal to a return of 4.2%. As TPG explained, the great thing is that a wide variety of items fall within the travel category — from airline purchases, taxis and tolls to parking lots and travel agencies. So even if your day-to-day travel is limited to transportation, you can rack up bonus Ultimate Rewards points pretty quickly. As for using those points, you have 13 travel partners to choose from, and you can also redeem UR points directly for airfare at a rate of 1.25 cents apiece.
Using the Cards Together
How does this work, you ask? To redeem rewards earned with the Chase Freedom Unlimited — or its sibling, the original no-fee Chase Freedom Card — as points that can be transferred to partners, you need to hold a higher-tier card like the Chase Sapphire Preferred that earns Ultimate Rewards points outright. (Another option is the Ink Business Preferred Credit Card, which can be a great alternative — or addition — for small business owners, and of course there’s the premium Chase Sapphire Reserve for those who are alright with paying a $450 annual fee).
Essentially, you can’t translate your cash back into Ultimate Rewards points unless you have one of these UR-earning cards. So unless you simply want cash back — in which case you should check out some other cards with higher returns — you should really be pairing the Chase Freedom Unlimited with a card that unlocks Ultimate Rewards redemptions. For more information on how this setup works, see Jason Steele’s post on why the Chase Freedom isn’t just another cash-back card.
Speaking of the Chase Freedom, you may be wondering how it fits into the picture — especially given that it’s the Freedom Unlimited Card’s predecessor and another no-fee cash-back option. This card is particularly valuable due to its rotating quarterly bonus categories, since you can earn 5% cash back (or 5x points) on up to $1,500 in combined purchases every three months. It’s definitely worth applying for the card and maximizing these bonus categories if you can, but considering Chase’s restrictions on applications and the Freedom Unlimited’s higher earning rate for everyday spending, it’s not necessarily as high of a priority.
Simply holding and using these two cards puts you in a good position for earning and redeeming valuable travel rewards, but using some strategy will up your game even more. For starters, all travel and dining purchases should go on the Chase Sapphire Preferred or another card that offers bonus points for this category. Since the Freedom Unlimited doesn’t offer any bonus categories, it’s your best bet for everyday spending that wouldn’t otherwise earn you more rewards with another card. And when it comes time to redeem your hard-earned points, see this guide to getting the maximum value out of your awards.
The Chase Freedom Unlimited Card and the Chase Sapphire Preferred Card make a great UR points-earning team, since the former offers a great return on everyday spending and the latter gets you 2x rewards on dining/travel and opens up some great transfer partner options. If you’re just getting started in this hobby, these two cards should be your top priority when it comes to card applications — just make sure to pay attention to the issuer’s 5/24 rule to optimize your chances for getting approved.
What are your favorite cards for getting started with points and miles?
With some great bonus categories, the American Express Gold Card has a lot going for it. The card offers 4x points at US restaurants, at US supermarkets (up to $25,000; then 1x), and 3x points on flights booked directly with airlines or through amextravel.com. It is currently offering a welcome bonus of 35,000 bonus points after you spend $2,000 in the first three months.
- Earn 35,000 Membership Rewards® Points after you spend $2,000 on eligible purchases with your new Card within the first 3 months.
- Earn 4X Membership Rewards® points at U.S. restaurants. Earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X).
- Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
- Earn up to $10 in statement credits monthly when you pay with The Gold Card at Grubhub, Seamless, The Cheesecake Factory, Shake Shack, and Ruth's Chris Steak House. This is an annual savings of up to $120. Enrollment required.
- $100 Airline Fee Credit: up to $100 in statement credits per calendar year for incidental fees at one selected qualifying airline.
- Choose to carry a balance with interest on eligible charges of $100 or more.
- No Foreign Transaction Fees.
- Annual Fee is $250.
- Terms apply.
- See Rates & Fees