Should the Chase Sapphire Preferred Be Your Next Card?

Aug 22, 2019

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In many ways, 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 anymore to earn some of the most valuable and versatile points out there. All you had to do was build a strategy centered 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, it’s important to see how well the Sapphire Preferred has stood the test of time. If you don’t already have it, we answer whether it should be the next addition to your wallet.

The Basics

The Chase Sapphire Preferred currently comes with a sign-up bonus of 60,000 Ultimate Rewards points after you spend $4,000 in the first three months. 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 in a bit, you can get a lot more than that from these points if you maximize them.

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 — and really Chase as a whole — stands out for how broadly it defines the bonus categories. Travel purchases aren’t just limited to flights and hotels, but include transactions like ride-sharing, public transit and even some parking fees. Similarly, the dining category includes merchants like meal delivery services, giving you plenty of opportunities to rack up points.

Uber
Uber and Lyft rides code as “travel” on the Chase Sapphire Preferred. (Photo by Leon Neal/Getty Images)

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 even mix points and cash together as you see fit. Booking directly with Chase can also sometimes be a great trick for American Airlines flyers, as these reservations have been known to code as “special fares” and earn miles on a distance-based (instead of revenue-based) chart.

If, on the other hand, your goal is to squeeze maximum value out of your Chase points, you’ll often be better off transferring to one of Chase’s 12 airline and hotel transfer partners:

  • Aer Lingus AerClub
  • Air France-KLM Flying Blue
  • British Airways Avios
  • 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 alliances along with three of the biggest hotel chains, meaning that no matter where in the world you’re traveling, points from your CSP should be able to help you get there.

Other Benefits

It’s nice when your travel plans go off without a hitch, but as I’m sitting here writing this story, I’m in the process of waiting out a six-hour American Airlines delay. Obviously, things don’t always go the way you planned, but when they don’t, the Chase Sapphire Preferred can come to the rescue with some incredibly generous travel benefits.

Top of the list here is trip delay insurance. If your flight (or other common carrier) is delayed 12 hours or more or requires an overnight stay, you can be reimbursed up to $500 for 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 like clothing and toiletries.

Suitcase on baggage claim carousel in airport (Photo by Spaces Images / Getty Images)
Made it to your destination but your bag is running late? You can get reimbursed for some necessities with the Chase Sapphire Preferred. (Photo by Spaces Images/Getty Images)

There are a few other lesser-known Sapphire benefits, including primary rental car insurance, but the bottom line is that when things go wrong on the road, this card has your back.

Chase Cards Work Better Together

You might have already started collecting Ultimate Rewards points, which routinely rank as one of the most valuable and versatile loyalty currencies out there. The good news is that 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 and Chase Freedom Unlimited are incredibly valuable cash-back cards, but if you also hold a paid Ultimate Rewards earning card like the CSP, the Chase Sapphire Reserve or the Ink Business Preferred Credit Card, they 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. The catch is that the cash back from these cards is issued in the form of “points” worth one cent each, but you can move those points over to your Chase Sapphire Preferred and turn them into full-fledged transferable Ultimate Rewards points, doubling their value.

You’ll find that the CSP also pairs very 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 cellular phone, 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 up 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. In all the time that I’ve been involved in travel rewards, I can’t think of a single card that I’d be this happy to pay an annual fee on. The Chase Sapphire Preferred charges a modest $95 annual fee (compared to the $450+ charged by many premium cards these days) and doesn’t carry any foreign transactions 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 great 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 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 non bonus purchases. The CSP pulls ahead when it comes to the double points it earns on travel and dining purchases. 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 great 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 Editor-at-Large Nick Ewen has previously made a compelling case for why the Chase Sapphire Preferred should be your first card. Unfortunately, not everyone who wants this card will be able to get it, 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 valuable long-term customers, a few years ago Chase introduced the 5/24 rule. 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, as you won’t be able to get it.

Current Chase Sapphire Cardholders

For a while after the introduction of the Chase Sapphire Reserve, it was possible to get the 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 24 months”

So if you currently hold either a Chase Sapphire Reserve or a plain Chase Sapphire, or you’ve received a Sapphire welcome bonus in the last 24 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, Ultimate Rewards provides access to a broad range of airline and hotel loyalty programs. That being said, 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.

That being said, I’m a loyal American Airlines flyer who’s never redeemed Ultimate Rewards for hotels, and I still find immense value in the program. So I’d encourage everyone to analyze their own 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 plan — 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.

Comparison Overview

Card Chase Sapphire Preferred Chase Sapphire Reserve
Annual fee $95 $450
Earning rates 2x points on travel and dining, 1x on everything else 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, 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. While they offer some identical benefits, 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 4 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 6 or more hours (or requiring an overnight stay)
Baggage delay insurance Up to $100 per day for up to 5 days Up to $100 per day for up to 5 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 common carrier loss of life benefit; $100,000 for 24-hour loss of life benefit $1,000,000 for common carrier loss of life benefit; $100,000 for 24-hour loss of life benefit
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 $450 annual fee (vs. $95 on the Preferred). But the Sapphire Reserve also offers many benefits to make up for that cost. First off is a $300 annual travel credit, which brings your out of pocket cost down to $150. 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 $300 travel credit) and dining for this calculation.

After accounting for the $300 travel credit (which I take at face value), the difference in cost between the Preferred and Reserve is $55 a year ($150 vs. $95). $55 is equal to roughly 2,619 Ultimate Rewards points ($55 divided by 2.1 cents per point). That means if you spend more than $2,619 a year on travel and dining, you’ll come out ahead earning 3x with the Reserve instead of 2x with the Preferred, though 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.

Bottom Line

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’s likely to quickly become a “go to” card in your purse or wallet.

Additional reporting by Nick Ewen

2018 TPG Award Winner: Mid-Tier Card of the Year
Chase Sapphire Preferred® Card

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

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • 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®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
Intro APR on Purchases
N/A
Regular APR
17.99% - 24.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.