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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, Marriott and Capital One all offer transferable point programs. But today, we’ll focus on Chase Ultimate Rewards since Ultimate Rewards points routinely rank highly in TPG’s monthly valuations. In fact, Ultimate Rewards points are currently tied with Amex Membership Rewards points for the most valuable transferable currency, as both are valued at 2 cents apiece.
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. Read on for details on why the Chase Freedom Unlimited and the Chase Sapphire Preferred Card 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 personal cards across all banks in the past 24 months, it’s very unlikely you’ll be approved for most cards in Chase’s portfolio, including the 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, the Sapphire Preferred should probably be your first application, since it earns you 2 Chase Ultimate Rewards points per dollar on dining purchases and a wide variety of travel spending — equal to a 4% return based on TPG’s valuations — for just a $95 annual fee. 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 3% cash back on the first $20,000 you spend in your first year; after that, you’ll earn an uncapped 1.5% cash back on all purchases. But, as I’ll discuss later in this guide, that can equate to 3x and 1.5x Ultimate Rewards points per dollar — a great earning rate for a card with no annual fee.
Current Bonus: None
Benefits: 3% cash back on all purchases your first year up to $20,000 spent. After that, unlimited 1.5% cash back on every purchase. 0% intro APR on purchases and balance transfers for 15 months (after that 17.24 – 25.99% variable APR applies).
Annual fee: $0
Reasons to get it: 3% cash back on the first $20,000 you spend your first year is impressive. But, after that 1.5 cents back for every dollar spent isn’t the best you can do — other cash-back cards like the Citi® Double Cash Card can get you a better return. With the Citi® Double Cash 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 if you have a full-fledged Chase Ultimate Rewards earning card like the Chase Sapphire Preferred, Chase Sapphire Reserve or Ink Business Preferred Credit Card, 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 3% cash back you’ll earn on the first $20,000 you spend in your first year becomes 3x points for a 6% return. Likewise, the 1.5% cash back you’ll earn on subsequent purchases becomes 1.5x points for a return of 3%.
- Credit Card Review: Chase Freedom Unlimited
- Is the Chase Freedom Unlimited 3x Everywhere Offer Worth a 5/24 Slot?
- Tips for Maximizing the Chase Freedom Unlimited 3% Welcome Bonus
- Why the Chase Freedom Unlimited Should Be the First Card in Every Student’s Wallet
- When Should You Use the Chase Freedom Unlimited Card?
- The Best Credit Cards to Pair With the Chase Freedom Unlimited
Current bonus: Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. These points are worth $750 in travel when you redeem directly through the Chase Ultimate Rewards portal.
Benefits: 2 points per dollar spent on travel and dining, no foreign transaction fees, 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 12 travel partners, including British Airways, Hyatt, Iberia, JetBlue and various Star Alliance airlines.
Annual fee: $95
Reasons to get it: Earn 2x points on travel and dining — equal to a return of 4%. 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 pretty quickly. As for using those points, you have 12 travel partners to choose from and you can also redeem Ultimate Rewards points directly for plane tickets, hotel stays, rental cars or experiences through the Chase Ultimate Rewards portal at a rate of 1.25 cents apiece.
- Credit Card Review: Chase Sapphire Preferred
- Should the Chase Sapphire Preferred Be Your Next Card?
- 24 Fun Facts About the Chase Sapphire Preferred
- 10 Years Later, Why the Chase Sapphire Preferred Is Still My Top Rec for Family Travel
- 5 Reasons to Consider the Chase Sapphire Preferred Over the Sapphire Reserve
- What Credit Score Do You Need to Get the Chase Sapphire Preferred Card?
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 in exchange for better earning, additional benefits and a $300 annual travel credit).
Essentially, you can’t translate your cash back into Ultimate Rewards points unless you have one of these full-fledged Ultimate Rewards-earning cards. So unless you simply want cash back — in which case you should check out some other cards with higher returns instead — you should really be pairing the Chase Freedom Unlimited with a card that unlocks Ultimate Rewards redemptions.
Speaking of the Chase Freedom, you may be wondering how it fits into the picture — especially since it’s another no-fee cash-back option. The Freedom 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 travel or dining. Since the Freedom Unlimited doesn’t offer any bonus categories, it’s a good choice 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 and this guide for finding sweet spots in the Ultimate Rewards program.
The Chase Freedom Unlimited and the Chase Sapphire Preferred Card make a great Ultimate Rewards 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 starting to earn travel rewards with credit cards, 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.
Featured photo by Eric Helgas/The Points Guy.
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NEW INCREASED OFFER: 60,000 Points
TPG'S BONUS VALUATION: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- 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, 60,000 points are worth $750 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