Should the Chase Sapphire Preferred be your next card?
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Editor’s note: This is a recurring post, regularly updated with new information.
The Chase Sapphire Preferred Card is the card that made travel rewards accessible to the masses. You didn’t have to be rich or a business traveler to earn some of the most valuable and versatile points out there. All you had to do was build a strategy around the CSP and free flights and hotels would be yours.
But with increasing competition and the introduction of more premium products over the years, we wanted to see how well the Sapphire Preferred has stood the test of time. Here’s what we found.
Related reading: Chase Sapphire Preferred credit card review
The Chase Sapphire Preferred currently comes with a sign-up bonus of 60,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months of account opening. The annual fee is $95 and the card has no foreign transaction fees. The sign-up bonus is worth $750 toward travel when you redeem through Chase Ultimate Rewards — but as you’ll see shortly, you can get a lot more than that from these points if you transfer them to Chase’s hotel and airline partners.
In addition to the sign-up bonus, the Sapphire Preferred earns points at the following rates:
- 2x points on travel purchases
- 2x points on dining purchases
- 1x on everything else
The CSP — like all Chase cards — stands out for how broadly it defines the bonus categories. Travel purchases aren’t limited to flights and hotels but include ride-hailing, public transit and even some parking fees. Similarly, the dining category includes merchants such as meal delivery services, giving you plenty of opportunities to rack up points.
You have two main options on the redemption side. If your goal is simplicity, you can use your points to book travel directly through the Chase travel portal at a fixed rate of 1.25 cents per point, turning your 60,000 points into $750 worth of travel. If you don’t have enough points to cover your entire trip, you can mix points and cash together. Booking directly with Chase can also help you rack up bonus miles and elite qualifying miles with the airline you’re flying because these redemptions code as cash tickets and usually earn miles.
If, on the other hand, your goal is to squeeze maximum value out of your Chase points, you’ll often be better off moving your poins to one of Chase’s 10 airline and three hotel transfer partners:
- Aer Lingus AerClub
- Air France-KLM Flying Blue
- British Airways Avios
- Emirates Skywards
- Iberia Plus
- JetBlue TrueBlue
- Singapore KrisFlyer
- Southwest Rapid Rewards
- United MileagePlus
- Virgin Atlantic Flying Club
- IHG Rewards Club
- Marriott Bonvoy
- World of Hyatt
These partners cover all three major airline alliances (Star Alliance, Oneworld and SkyTeam) and three of the biggest hotel chains. No matter where in the world you’re traveling, points from your CSP should help you get there and stay there.
It’s nice when your travel plans go off without a hitch, but delays and cancellations are inevitable. When things don’t go the way you planned, the Chase Sapphire Preferred can come to the rescue with some generous travel benefits.
Top of the list is trip delay insurance. If your flight (or other common carrier) is delayed 12 hours or more or a delay requires an overnight stay, you can be reimbursed up to $500 to cover food, lodging and local transportation. And if your trip is canceled by illness, weather or other covered situations, you can be reimbursed up to $10,000 per trip for prepaid expenses such as tours, hotels and plane tickets. Finally, if your bag is delayed six hours or more, you can be reimbursed up to $500 ($100 a day for five days) for purchases such as clothing and toiletries.
Related reading: Your guide to Chase’s trip insurance coverage
There are other lesser-known Sapphire benefits, like primary rental car insurance, but the bottom line is that when things go wrong on the road, this card has your back.
Chase also made a nice announcement to kick off 2020, adding at least a year of unlimited free food delivery to the Sapphire Preferred in the form of a DoorDash DashPass membership. Normally valued at $9.99 a month, DashPass customers receive lower service fees and free delivery on all orders of more than $12. Sapphire cardholders can register anytime before Dec. 31, 2021, and even if you register in late 2021, you are guaranteed at least a year of service into 2022.
Chase cards work better together
You might have already started collecting Ultimate Rewards points, one of the most valuable and versatile loyalty currencies. As long as you’re eligible to apply for the CSP (more on that below), it can actually make your existing collection of Chase cards even stronger.
The no-annual-fee Chase Freedom (No longer open to new applicants) and Chase Freedom Unlimited are valuable cash-back cards, but if you also hold an Ultimate Rewards-earning card such as the CSP, the Chase Sapphire Reserve or the Ink Business Preferred Credit Card, the Freedom cards get even more rewarding. The Freedom earns 5% cash back (5x points) on your first $1,500 spent in rotating quarterly bonus categories (activation required), while the Freedom Unlimited earns 1.5% cash back (1.5x points) on purchases, making it a great card for those new to the world of credit cards and award travel.
Related reading: Maximize your wallet with the perfect quartet of Chase credit cards
The catch is that the cash back from these cards is issued in the form of points worth one cent each. You can receive the cash back but you can also move those points over to your Chase Sapphire Preferred and turn them into full-fledged transferable Ultimate Rewards points, doubling their value.
The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
You’ll find that the CSP also pairs well with the no-annual-fee Chase Ink Business Cash Credit Card, which earns 5% back on the first $25,000 spent in combined purchases at office supply stores and on cellphone, landline, internet and cable TV services each account anniversary year. Once you move those points over to your CSP and turn them into Ultimate Rewards points, that brings your return to 10%, based on TPG’s valuations.
Is the Chase Sapphire Preferred worth the annual fee?
The answer to this question is a resounding and emphatic yes. I can’t think of another card for which I’d be so happy to pay an annual fee. The Chase Sapphire Preferred charges a modest $95 (compared to the $450+ charged by many premium cards these days) and doesn’t carry any foreign transaction fees. As long as you pay your bill each month and don’t carry a balance, that $95 will be your only cost for carrying the card.
The CSP is a no-brainer the first year, as the sign-up bonus is worth a minimum of $750 and likely more than $1,000 if you leverage Chase’s airline transfer partners (based on TPG’s valuations). The second year is always the true test for a travel rewards card, but the CSP shines here as well.
In order to recoup your $95 annual fee you’d need to earn 4,750 points a year beyond what you could get from a no-annual-fee card like the Citi® Double Cash Card. That card earns 2% cash back (1% when you buy and 1% as you pay your bill) and is generally used as a good comparison to help you decide if you’re getting a good return on your annual fee. Based on TPG’s valuations of Ultimate Rewards points at 2 cents each, the Double Cash and CSP have the same earning rate on nonbonus purchases.
The CSP pulls ahead when it comes to the double points it earns on travel and dining. So if you spend $4,750 a year on travel and dining, or just $395 a month, you’ll break even on your annual fee. Add in the all the perks described above, including trip delay and cancellation insurance, luggage loss and delay insurance, and primary rental car insurance, and the Sapphire Preferred should have a permanent spot in your wallet.
Who should wait to get the CSP?
TPG Senior Editor Nick Ewen has made a compelling case for why the Chase Sapphire Preferred should be your first card. But not everyone is able to get this card, so let’s examine who should hold off on getting a Sapphire Preferred.
The infamous 5/24 rule
In an effort to combat credit card churning and attract long-term customers, Chase introduced the 5/24 rule a few years ago. Simply put, this means that you’ll be automatically rejected for many Chase cards — including the CSP — if you’ve opened five or more cards in the last 24 months. If this applies to you, don’t waste your time and a hard inquiry on your credit report applying for the Sapphire Preferred. You won’t get it.
Current Chase Sapphire cardholders
For a while after the introduction of the Chase Sapphire Reserve, it was possible to get welcome bonuses on both Sapphire cards. Then Chase decided to stop this practice and changed the terms on the Sapphire Preferred application to read as follows:
“This product is not available to either (i) current cardmembers of any Sapphire credit card or (ii) previous cardmembers of any Sapphire credit card who received a new card member bonus in the last 48 months”
So if you currently hold either a Chase Sapphire Reserve or a plain Chase Sapphire or if you’ve received a Sapphire welcome bonus in the last 48 months, you won’t be eligible for the bonus on the CSP and shouldn’t apply right now.
Is Ultimate Rewards the best program for you?
As mentioned before, the Ultimate Rewards program provides access to a broad range of airline and hotel loyalty programs. However, there are certain circumstances where one of those programs might not be right for you.
For instance, if you live in an American Airlines hub like Miami (MIA) or Charlotte (CLT) and primarily fly long-haul international flights to Europe, you might not get great value out of British Airways Avios, which is the only Oneworld transfer partner in Ultimate Rewards. Similarly, if you’re a die-hard Hilton loyalist, the ability to transfer points to Hyatt might not excite you that much.
On the other hand, I’m a loyal American Airlines flyer who’s never redeemed Ultimate Rewards for hotels, but I still find immense value in the program. So analyze your travel habits and see if branching out to a new Chase transfer partner could add value.
Sapphire Preferred vs. Sapphire Reserve
If you’ve made it this far — confirming that you’re eligible to earn the bonus on the Chase Sapphire Preferred and deciding that Ultimate Rewards points fit well with your travel plans — the last question to ask yourself is whether the CSP is the best card to get you there or if you should opt for the premium Chase Sapphire Reserve instead.
Further Reading: Significant changes confirmed for Chase’s Sapphire Reserve card
|Card||Chase Sapphire Preferred||Chase Sapphire Reserve|
|Earning rates||2x points on travel and dining, 1x on everything else||10x points on Lyft rides, 3x points on travel and dining, 1x on everything else|
|Sign-up bonus||60,000 points after you spend $4,000 in the first three months||50,000 points after you spend $4,000 in the first three months|
|Point value for UR portal redemptions||1.25 cents||1.5 cents|
|Credits||N/A||$300 annual travel credit, $60 annual DoorDash credit for 2020 and 2021, up to $100 Global Entry/TSA PreCheck application fee credit|
|Lounge access||N/A||Priority Pass Select|
|Authorized user fee||$0||$75|
Travel coverage and purchase protections
It’s also worth comparing the two cards’ coverage for things like travel delays, trip cancellation and purchase protection. They offer some identical benefits, but there are a few differences in coverage:
|Card||Chase Sapphire Preferred||Chase Sapphire Reserve|
|Rental car insurance||Primary; “expensive and exotic cars” are excluded||Primary; provides reimbursement up to $75,000 for theft and collision|
|Roadside assistance||$59.95 per service call||Coverage up to $50 per incident four times a year|
|Trip cancellation insurance||Up to $10,000 per covered trip||Up to $10,000 per covered trip|
|Trip delay insurance||Up to $500 per ticket for delays of 12 or more hours (or requiring an overnight stay)||Up to $500 per ticket for delays of six or more hours (or requiring an overnight stay)|
|Baggage delay insurance||Up to $100 per day for up to five days||Up to $100 per day for up to five days|
|Lost luggage reimbursement||Up to $3,000 per person (up to $500 per person for jewelry, watches, cameras, video recorders and other electronic equipment)||Up to $3,000 per person (up to $500 per person for jewelry, watches, cameras, video recorders and other electronic equipment)|
|Travel accident insurance||$500,000 for loss of life on a common carrier; $100,000 for loss of life elsewhere during a ticketed trip||$1,000,000 for loss of life on a common carrier; $100,000 for loss of life benefit elsewhere during a ticketed trip|
|Purchase protection||Up to $500 per claim and up to $50,000 per account||Up to $10,000 per claim and up to $50,000 per year|
Many people are wary of the CSR because it comes with a $550 annual fee (vs. $95 on the Preferred). But the Sapphire Reserve offers many benefits to make up for that cost. First, its $300 annual travel credit brings your out-of-pocket cost down to $250. The Reserve also has a long list of premium travel benefits, but let’s focus just on the travel credit and the elevated 3x points on travel (excluding the $300 travel credit) and dining for this calculation.
After subtracting the $300 travel credit, the difference in cost between the Preferred and Reserve is $155 a year ($250 vs. $95), which is equal to roughly 7,750 Ultimate Rewards points ($155 divided by 2 cents per point). That means if you spend more than $7,750 a year on travel and dining (or $645 a month), you’ll come out ahead earning 3x with the Reserve instead of 2x with the Preferred. Ultimately, you’ll have to decide whether you travel enough to take full advantage of the CSR’s benefits. If not, then the CSP would likely be a better choice.
The Chase Sapphire Preferred continues to be one of the most well-rounded rewards credit cards and a great option for most travelers. If you’re eligible to apply for this card and don’t already have it, you should strongly consider getting it next. It will probably become a go-to card in your purse or wallet.
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