How your points strategy changes when you swap your Chase Sapphire Reserve for the Chase Sapphire Preferred
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Until recently, the Chase Sapphire Reserve was one of the top travel rewards cards. My husband signed up soon after the card launched back in 2016, and we have frequently used his card ever since due to its bonus categories and lack of foreign transaction fees. In fact, since we travel full time as digital nomads and most of our purchases are for dining or travel, it became our go-to card while traveling internationally.
But with the Sapphire refresh earlier this year, the Chase Sapphire Preferred Card became more appealing to many Chase Sapphire Reserve cardholders. After all, with the new perks on the Chase Sapphire Preferred, it became increasingly difficult to justify the Chase Sapphire Reserve’s $550 annual fee. Plus, the elevated sign-up bonus on the Chase Sapphire Preferred earlier this year was highly compelling.
Some cardholders, including my husband, downgraded their Chase Sapphire Reserve card to a no-annual-fee card and then applied for the Chase Sapphire Preferred earlier this year. Now, we each have our own Chase Sapphire Preferred and Ink Business Preferred Credit Card accounts, but neither of us has a Chase Sapphire Reserve. So, today I’ll discuss several ways our Chase Ultimate Rewards points strategy has changed now that we don’t have a Chase Sapphire Reserve.
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Pay Yourself Back and Ultimate Rewards travel portal redemptions become less appealing
Chase loyalists know that you can maximize Ultimate Rewards redemptions by transferring points to high-value transfer partners. But if you have a Chase Sapphire Reserve, you can get 1.5 cents per point of value without transferring points when you:
- Redeem for travel through Ultimate Rewards.
- Redeem for statement credits against existing purchases in select, rotating categories through the current Pay Yourself Back offer.
However, TPG’s valuations peg the value of Chase Ultimate Rewards points at 2 cents per point, so even when we had a Chase Sapphire Reserve account, I never loved the idea of redeeming Chase Ultimate Reward points at a rate of 1.5 cents per point.
But I could at least see the value occasionally. For example, we could redeem points for a flight through the Ultimate Rewards travel portal and get elite earnings on the flight. Meanwhile, if we’d booked the same ticket by transferring points to a Chase Ultimate Rewards transfer partner, we wouldn’t earn toward elite status with the airline.
But now that we only have the Chase Sapphire Preferred and Ink Business Preferred Credit Card — both of which give 1.25 cents per point of value through the Ultimate Rewards travel portal and Pay Yourself Back — I can’t stomach redeeming Chase Ultimate Reward points at a rate of 1.25 cents per point. After all, I know we can get more value through transfer partners even if we don’t maximize our redemptions.
Transferring to travel partners for less-valuable redemptions looks better
Some Ultimate Rewards transfer partners are more valuable than others. Our guide to redeeming Chase Ultimate Rewards points for maximum value even has sections for top transfer partners and less-desirable transfer partners. And, as evidenced by our post on the best Chase Ultimate Rewards sweet spots, some redemptions provide more value than others even in the more-desirable programs.
My husband and I enjoy maximizing our rewards, so we’ve rarely transferred points when the redemption value wasn’t well over TPG’s valuation. Within the Chase Ultimate Rewards program, we usually gravitate toward high-value transfer partners such as Virgin Atlantic Flying Club and British Airways Avios.
But now we’re starting to consider transferring Ultimate Rewards points for slightly less valuable redemptions. I suspect a good bit of this shift is due to the fixed-rate redemption value of Ultimate Rewards points changing from 1.5 cents per point to 1.25 cents per point now that we don’t have a Chase Sapphire Reserve. After all, even though I have no desire to redeem Ultimate Rewards points for 1.25 cents per point, price anchoring certainly plays a role in my subconscious valuations.
But, to be fair, part of this shift is likely also due to our ever-growing balance of Ultimate Rewards points and changing priorities. After all, although transferable points are more devaluation-proof than airline or hotel rewards, devaluations are likely coming. And there are a lot of aspirational products and experiences we want to try once borders reopen, schedule changes and cancellations become less common and travel returns to normal.
Plus, I earned World of Hyatt Globalist for the first time in 2021 and plan to requalify in 2022. So, I’ll likely need to transfer some Ultimate Rewards points into the World of Hyatt program for some 2022 award stays. And although I’ll avoid redeeming points if the redemption rate is too low, I likely won’t aim for significantly higher than 2 cents per point when deciding whether to book a paid rate or transfer Chase Ultimate Rewards points.
Utilizing different cards for purchases
I mentioned earlier in this article that the Chase Sapphire Reserve was previously our primary card when traveling internationally. But neither the Chase Sapphire Preferred Card nor the Ink Business Preferred Credit Card has automatically taken its place in our wallets. Instead, we’re currently spending as follows:
- Dining: Earning 4 American Express Membership Rewards points per dollar spent on dining at restaurants with the American Express® Gold Card while working toward earning a retention offer, then we’ll switch to earning 5 Citi ThankYou Rewards points per dollar spent at restaurants with the Citi Prestige® Card (no longer available for new applicants).
- Airfare: Earning 3 Chase Ultimate Rewards points per dollar spent (on the first $150,000 spent in combined purchases each account anniversary year, then 1 point per dollar spent) on shipping purchases; advertising purchases made with social media sites and search engines; internet, cable and phone services; and travel with the Ink Business Preferred Credit Card.
- Car rentals: Earning 2 Chase Ultimate Rewards points per dollar spent on travel (including rental cars) and getting primary car rental protection with the Chase Sapphire Preferred Card.
- Hotels: Earning bonus points with the Ink Business Preferred Credit Card or a cobranded hotel credit card, such as the IHG Rewards Premier Credit Card.
- Walmart purchases in the U.S. while RVing: Earning 5 Chase Ultimate Rewards points per dollar spent with the Chase Freedom Flex during the fourth quarter of 2021, then switching to an everyday spending card.
- Everyday spending: Earning at least 2 Capital One miles per dollar spent on all purchases with the Capital One Venture X Rewards Credit Card while working toward meeting the minimum spending requirements for the card’s sign-up bonus.
The information for the Citi Prestige has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
As you can see, downgrading the Chase Sapphire Reserve encouraged us to reconsider our go-to cards. In doing so, we’ve started actively using more cards and earning more rewards on purchases that we’d previously have put on the Chase Sapphire Reserve for simplicity. For example, while we previously put most of our dining on the Chase Sapphire Reserve, now we earn more rewards by using the American Express Gold Card or the Citi Prestige Card.
Two years ago, I expected we’d keep my husband’s Chase Sapphire Reserve for the long term. But between an increased annual fee on the Chase Sapphire Reserve, new perks on the Chase Sapphire Preferred Card and a compelling sign-up bonus, it became easy to drop the Chase Sapphire Reserve and pick up the Chase Sapphire Preferred Card earlier this year.
Especially as travel and life continue to change amid the ongoing coronavirus pandemic, it’s worth considering whether your card lineup should also change. But realize that how you use and value your rewards may also change as you optimize your credit card portfolio. And ensure that you have a plan to transfer, redeem or otherwise protect your transferable rewards before closing or downgrading a card.
Featured photo by Witthaya Prasongsin/Getty Images.
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