Why Chase Sapphire Preferred and Freedom Unlimited are the perfect beginner combo
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If you’re just getting started with earning points and miles, you’ll find that transferable points are incredibly valuable for 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 which routinely rank high in TPG’s monthly valuations. In fact, Ultimate Rewards points are currently tied with Amex Membership Rewards points for the most valuable transferable currency, both valued at 2 cents a point.
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 they can jump-start your award travel.
Why these two cards?
I’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 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, 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 also offers $150 cash back after you spend $500 in the first three months. In addition to the welcome bonus, 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: $150 cash back after spending $500 in the first three months from account opening.
Benefits: 1.5% cash back on all purchases; 0% intro APR on purchases and balance transfers for 15 months (after that 16.49%-25.24% variable APR applies).
Annual fee: $0
Reasons to get it: $150 cash back or 15,000 Ultimate Rewards points when paired with a card like the Chase Sapphire Preferred. If cash back is what you’re after, consider other cash-back cards like the Citi® Double Cash Card that 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. As of September 2019, you can now convert the cash back earned on the Citi card to ThankYou Reward Points via a linked ThankYou account.
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 — such as 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 $150 welcome bonus becomes 15,000 Ultimate Rewards points and the 1.5% cash back you’ll earn on all purchases becomes 1.5x points for a return of 3%.
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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 13 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 13 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.
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Using the cards together
To redeem rewards earned with the Chase Freedom Unlimited — or its sibling, the original no-annual-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. There’s also the premium Chase Sapphire Reserve for those who think the $550 annual fee is worth its 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 of our other best cash back credit 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-annual-fee, cash-back option. The Freedom is particularly valuable because of its rotating quarterly bonus categories. You can earn 5% cash back (or 5x points) on up to $1,500 in combined purchases each quarter in categories you activate. 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 a priority.
Using these two cards puts you in a good position to earn and redeem travel rewards, but 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. Although 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. 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. 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 applications — just make sure to pay attention to the issuer’s 5/24 rule to optimize your chances for getting approved.
Additional reporting by Sarah Silbert
Featured photo by Eric Helgas/The Points Guy.
- Earn up to 100,000 bonus miles and 20,000 Medallion® Qualification Miles (MQMs). Earn 80,000 bonus miles and 20,000 Medallion® Qualification Miles (MQMs) after you spend $5,000 in purchases on your new Card in your first 3 months. Plus, earn an additional 20,000 bonus miles after your first anniversary of Card Membership. Offer Expires 4/1/2020.
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