Why Chase Sapphire Preferred and Freedom Unlimited is the perfect beginner card combo
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Editor’s note: This is a recurring post, regularly updated with new information and card details.
Getting started with credit card rewards can be incredibly overwhelming. Should you start with cash back or points and miles? Which card family should you choose first? Or should you try cards from different families? Will the annual fee on cards be worth it?
It’s easy to fall down a rabbit hole of research and questioning which is truly the right card for you.
When beginners ask for help building a card portfolio, we always recommend looking at card programs that can scale — meaning cards that can be paired with others later to build a comprehensive card strategy without sacrificing the old card to the sock drawer.
You’ll find that transferable points are incredibly valuable for avid and aspiring travelers because rewards can be redeemed across a wide variety of airline and hotel partners. But those travel credit cards generally have stricter approval requirements so they aren’t always an option as a first rewards credit card. The good news is that some issuers offer certain families of credit cards that allow you to start with a no-annual-fee credit card that can pair with a higher-tier card later on for maximum value.
The straightforwardness of Chase Ultimate Rewards — and Chase’s 5/24 rule — make this program a good place to start for points and miles newbies. When it comes to choosing credit cards to earn Ultimate Rewards, the Chase Freedom Unlimited and the Chase Sapphire Preferred Card make a powerful duo.
Read on to learn how these two cards can jump-start your award travel.
Why these two cards?
We’ll break down the full benefits of each card below, but here’s a quick explanation of why you’ll want to start with these two 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 personal cards across all banks in the past 24 months, it’s unlikely you’ll be approved for most cards in Chase’s portfolio, including the Freedom Unlimited and Sapphire Preferred.
If you’re starting out, it’s best to cover the most important bases first. If you already have a solid credit score, you’ll likely want to apply for the Chase Sapphire Preferred first because it earns those valuable transferable points. But if you are newer to the rewards credit card game, the Chase Freedom Unlimited is also a great place to start to earn cash back (in the form of points that can be later transferred to the Chase Sapphire Preferred when you apply for it down the line).
Overview: Chase Sapphire Preferred
Current bonus for Chase Sapphire Preferred: Earn 80,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. These points are worth $1,000 in travel when you redeem directly through the Chase Ultimate Rewards portal. Or, you can leverage them with transfer partners for more potential value. Plus, you can earn a $50 statement credit on groceries in the first year.
Benefits: Earn 2x travel and dining; no foreign transaction fees; perks such as primary auto rental insurance, baggage delay reimbursement, trip delay reimbursement, lost luggage insurance, trip cancellation and trip interruption insurance, extended warranty protection, purchase protection, and the ability to transfer to 10 airline and three hotel partners, including British Airways, Hyatt, Iberia, JetBlue and various Star Alliance airlines.
Annual fee: $95
Reasons to get it: Earning 2x points on all travel and dining is equal to a return of 4% based on TPG valuations. 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 Ultimate Rewards points quickly. You’ll also get excellent travel protections on these purchases.
As for using those points, you have multiple travel partners to choose from and you can also redeem Ultimate Rewards points directly for a number of eligible purchases through the Chase Ultimate Rewards portal at a rate of 1.25 cents apiece. Additionally, Chase recently expanded its Pay Yourself Back redemption option through Sept.30, 2021, so you can maintain that same value when redeeming toward purchases made at grocery stores, home improvement stores and dining establishments.
Overview: Chase Freedom Unlimited
Current bonus for Chase Freedom Unlimited: Earn $200 cash back after spending $500 in the first three months from account opening.
Benefits: Earn 5% cash back on travel purchased through Chase Ultimate Rewards, 3% on dining, 3% at drugstores and 1.5% on all other purchases; 0% intro APR on purchases for the first 15 months (after that 14.99%-23.74% variable APR applies).
Annual fee: $0
Reasons to get it: This card been refreshed and now offers arguably better everyday earning categories than the Sapphire Preferred. What really makes the Freedom Unlimited worthy of a slot in your wallet is that, if you have a full-fledged Chase Ultimate Rewards-earning card (such as the Chase Sapphire Preferred, Chase Sapphire Reserve or Ink Business Preferred Credit Card) — or plan to get one in the future — you can redeem your cash back as Ultimate Rewards points.
TPG’s latest valuations peg the value of Chase Ultimate Rewards points at 2 cents each. So, the $200 sign-up bonus becomes 20,000 Ultimate Rewards points and the 1.5% cash back you’ll earn on non-bonus purchases becomes 1.5x points for a return of 3%.
If cash back is ultimately what you’re after, consider some other of the best cash-back credit cards such as the Citi® Double Cash Card that gives you a better return on everyday purchases. With the Citi Double Cash Card, you’ll get 2% cash back (1% cash back and then another 1% cash back as you pay down your balance). You can also convert the cash back earned on the Citi card to ThankYou Rewards points via a linked ThankYou account.
Using the cards together
As mentioned above, the rewards earned by the Freedom Unlimited (and its sibling, the no-annual-fee Chase Freedom Flex) become a lot more valuable when you also hold a full-fledged Chase Ultimate Rewards-earning card. This is because you can only convert your cash back into transferrable points with a card that earns Ultimate Rewards points outright.
So, to redeem rewards earned with the Freedom cards as points that can be transferred to partners, you need to hold a higher-tier card like the Chase Sapphire Preferred. Another option is the premium Chase Sapphire Reserve for those who think the $550 annual fee is worth the card’s better earning, additional benefits and $300 annual travel credit.
Even if you don’t plan on transferring points to travel partners such as United, Hyatt, Southwest, British Airways and more, these cards guarantee 25% to 50% in extra value when redeeming points through the Chase Ultimate Rewards portal for travel at a fixed value. In other words, rather than redeem each point for 1 cent each with just a Freedom card, you’ll be able to redeem them at a rate of 1.25 or 1.5 cents apiece by also having the Sapphire Preferred or Reserve cards.
Additionally, these cards offer broader categories for the Pay Yourself Back redemption option.
If you simply want cash back and never plan on pairing your cards, you should check out some of our other best cash-back credit cards with higher returns. But those looking to build a card strategy long term can utilize the pairing capabilities of the Chase Freedom Unlimited with a card that unlocks Ultimate Rewards redemptions.
Using these two cards strategically puts you in a good position to earn and redeem travel rewards.
For starters, all travel purchases not made through the Ultimate Rewards travel portal (i.e. Uber rides and Airbnb stays) should go on the Chase Sapphire Preferred to earn bonus points and get excellent travel protections. Then, use the Freedom Unlimited for dining, drugstores and everyday purchases. Although there are more rewarding cards for dining, it’s a good choice for drugstore and everyday spending that wouldn’t otherwise earn you more rewards with another card.
When it’s time to redeem your hard-earned points, see this guide to getting the maximum value out of your awards and this guide for finding sweet spots in the Ultimate Rewards program.
While the latter isn’t always the best option for your spending, it opens up some great transfer-partner options on the redemption side. If you’re just starting to earn travel rewards with credit cards, these two cards should be your top priority when it comes to applications — but make sure you pay attention to the issuer’s 5/24 rule to optimize your chances for approval.
Additional reporting by Madison Blancaflor.
Featured photo by Eric Helgas/The Points Guy.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
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