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If you’re new to this hobby, it may seem incredibly daunting to get up to speed on the various tips and tricks we share here at The Points Guy. One of the best ways to get started is by choosing a solid travel rewards credit card. If you aren’t already a road warrior, your everyday spending habits play a huge role in earning (and then redeeming) points and miles. In this post, I’ll come back to my series from a while ago and look at how easy it is to earn rewards by opening and using a single card for one year.
In previous posts, I’ve looked at a variety of cards like the Chase Sapphire Preferred Card, the SPG American Express, the Southwest Premier Card, the Amex EveryDay Preferred Card and the Alaska Visa Card. Today, I’ll add to this list one of the newer cards on the market to highlight just how lucrative the Chase Sapphire Reserve can be in just your first year.
Sign-Up Bonus and Benefits
The card is currently offering a sign-up bonus of 50,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months from account opening. This bonus is worth $1,050 based on TPG’s most recent valuations thanks to the various ways to redeem Ultimate Rewards points, including valuable transfer partners like United and Hyatt. The card also offers 3 points per dollar spent on travel and dining purchases, and these categories tend to be quite broad.
Even though the card carries a $450 annual fee, there are numerous other benefits that can add significant value:
- $300 annual travel credit
- Priority Pass Select membership
- Special benefits through The Luxury Hotel & Resort Collection
- Up to a $100 application fee credit for Global Entry/TSA Precheck
So, if you open the Sapphire Reserve, earn the sign-up bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns, so for this analysis I used consumer-expenditure data from the Bureau of Labor Statistics for the most recent year available (2015) to estimate what an “average” household would spend (and thus earn) on the Reserve in one year.
In doing so, I made the following assumptions:
- Only the “Other lodging” category under “Shelter” can easily be paid with a credit card (since you’ll pay a fee for paying most mortgage and rent payments with credit cards), and these transactions earn 3x points as travel purchases.
- The “Vehicle purchases” category under “Transportation” can’t be paid with a credit card, but all other transportation expenses can.
- 50% of the “Healthcare” category consists of premiums and thus can’t be paid with a credit card.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
- All other expenses (including “Entertainment” and “Education”) can be paid with a credit card.
Again, your situation may differ substantially, so feel free to adjust these assumptions in order to calculate your own earning potential.
Here’s a quick table that shows how these spending patterns in the first year of cardmembership translate to Ultimate Rewards points:
|Food at home||$4,015||1 point/$||4,015|
|Food away from home||$3,008||3 points/$||9,024|
|Alcoholic beverages||$515||1 point/$||515|
|Housing (other lodging)||$730||3 points/$||2,190|
|Utilities, fuels and public services||$3,885||1 point/$||3,885|
|Household operations||$1,309||1 point/$||1,309|
|Housekeeping supplies||$655||1 point/$||655|
|Household furnishings and equipment||$1,818||1 point/$||1,818|
|Apparel and Services||$1,846||1 point/$||1,846|
|Transportation (gasoline)||$2,090||1 point/$||2,090|
|Other vehicle expenses||$2,756||1 point/$||2,756|
|Public and other transportation||$661||3 points/$||1,983|
|All other expenses||$5,813||1 point/$||5,813|
As you can see, the “average” American consumer would earn 90,070 Ultimate Rewards points in the first year of using the Chase Sapphire Reserve. Not too shabby!
What Does This Get You?
Of course, earning points is one thing, but knowing how to redeem them for maximum value is a completely different story. Fortunately, the Ultimate Rewards program has a variety of valuable redemptions, most of which involve transferring to the program’s partners.
That being said, here’s a sample of what you can get from one year of using the Sapphire Reserve:
1. Up to Three Round-Trip Economy Tickets to Hawaii
Planning a trip using points and miles to the Aloha State isn’t always the easiest goal in this hobby. However, you have a wealth of options at your disposal through the Ultimate Rewards program. My personal favorite is for West Coast residents. By transferring points to British Airways, you can take advantage of the carrier’s distance-based award chart to book tickets from several gateways to Hawaii for just 25,000 Avios per person, including Los Angeles (LAX) and Phoenix (PHX) on American or San Diego (SAN), Oakland (OAK), Portland (PDX) and Seattle (SEA) on Alaska. This would even leave you with 15,000 Ultimate Rewards points leftover!
For those readers on the East Coast, you also have options to redeem this haul of points for three tickets to Hawaii. Both Korean Air SkyPass and Air France/KLM Flying Blue are transfer partners of Ultimate Rewards, and since both carriers belong to SkyTeam, you can redeem miles on Delta flights to Hawaii from anywhere in the US. Korean is a bit cheaper at 25,000 miles round-trip, though keep in mind that the program has a somewhat difficult and arcane booking process. As a result, you may be happier transferring to Flying Blue for 30,000 miles round-trip. In either program, this is still a great deal, especially since you can route from anywhere in the US.
Finally, you could always transfer to Singapore (35,000 miles) for flights on United, though this would only get you two round-trip economy tickets with the aforementioned haul of Ultimate Rewards points.
2. Three Nights in a Top-Tier Hyatt Property
Another incredibly valuable transfer partner through Ultimate Rewards is World of Hyatt, and after a year of spending on the Sapphire Reserve, you’ll have enough points for three free nights at the program’s top-tier Category 7 properties. I had a fantastic award stay at the Park Hyatt Zurich back in 2015, but other locations include the Park Hyatt Paris-Vendôme, Park Hyatt Tokyo and Park Hyatt Sydney. I regularly see these rooms sell for up to $1,000 per night or even more, depending on the time of year, so this is a great way to get a ton of value from the program.
3. Two or Three Nights in New York City Plus Airfare From Multiple US Cities
If you’re looking to redeem your points for a trip that includes both flights and hotel, consider a weekend trip to the Big Apple. Once again, you have some options when it comes to this itinerary. For flights, one of the most economical options would be for those readers east of the Mississippi and would again utilize British Airways. Flights of 1,151 miles or less in distance require just 7,500 Avios each way, so if you can find availability on American, you and your spouse/significant other/friend could fly there and back from cities like Charlotte (CLT), Miami (MIA) and Chicago-O’Hare (ORD) for a total of 30,000 points.
You also could consider transferring to Southwest Rapid Rewards, as the carrier serves both New York-LaGuardia (LGA) and Newark (EWR). Even though Southwest follows a revenue-based redemption scheme, you can still get some great value on Wanna Get Away fares. At a very quick glance, I was able to find round-trip tickets from Orlando (MCO) to Newark (EWR) for a random weekend in November for just 13,099 points apiece.
For hotels, you could always look at spending a couple of nights at the Andaz Fifth Avenue or Andaz Wall Street, two of my favorite Hyatt properties that require just 25,000 points for a free night (a couple of other Hyatt hotels in Manhattan are just 20,000 points per night). However, you also have the option of transferring points to Marriott, which can unlock additional redemptions through either Marriott Rewards or Starwood Preferred Guest (thanks to the impending merger and the ability to transfer points freely between the two programs). While I’d recommend going the Hyatt route, it’s always nice to have alternatives, depending on where you’d like to stay.
The Ultimate Rewards program is one of my favorites and regularly clocks in as one of the most valuable currencies on TPG’s monthly valuations. The Chase Sapphire Reserve, meanwhile, is generally regarded as one of the best travel rewards credit cards out there, giving you a potent combination and unlocking a variety of redemptions. Keep in mind too that the above calculation may even be a bit too conservative:
- The calculation assumes that you’re the average consumer. If you typically spend more in a year, then your earnings will be even higher.
- The calculation assumes that you don’t make any purchases through an online shopping portal. The Ultimate Rewards shopping portal allows you to earn bonus points at close to 300 online retailers, a nice way to boost your earnings even more.
- The calculation assumes that you only open one card. Other travel rewards credit cards (like the Chase Freedom Unlimited and the Ink Business Preferred Credit Card) can be opened and used right alongside the Sapphire Reserve for even more earning potential.
Regardless of these last few items, I hope this post has illustrated just how rewarding a single card (especially in the first year) can be when it comes to free travel.
How would you redeem one year of Ultimate Rewards points from the Chase Sapphire Reserve?
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This is one of the top premium cards out there since you earn 3x on all travel (excluding $300 travel credit) and dining and have access to great perks like a $300 travel credit each cardmember year, 50% more value when you redeem points for travel through Chase Ultimate Rewards and you get elite travel benefits like Global Entry application fee rebate, Priority Pass Select and special rental car privileges.
- Earn 50,000 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®
- Named "Best Premium Travel Credit Card" for 2018 by MONEY® Magazine
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
- 1:1 point transfer to leading airline and hotel loyalty programs
- Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
- Up to $100 application fee credit for Global Entry or TSA Pre✓®