Should the Chase Sapphire Preferred be your next card?
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Editor’s note: This post has been updated with new information.
The Chase Sapphire Preferred Card is the card that made travel rewards accessible to the masses. You don’t have to be rich or a business traveler to earn some of the most valuable and versatile points out there. With the Sapphire Preferred, all you have to do was build a solid rewards strategy, and free flights and hotels would be yours.
But with increasing competition and more premium card options, we wanted to see how well the Chase Sapphire Preferred has stood the test of time. Here’s what we found.
The Chase Sapphire Preferred is a mid-tier travel rewards card with a $95 annual fee. However, it 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. TPG values Ultimate Rewards points at 2 cents each, making this offer worth $1,200.
In addition to the sign-up bonus, you’ll earn rewards at the following rates:
5x on travel when booked through the Chase Ultimate Rewards portal
3x on dining purchases
- 3x points on select streaming services
- 3x points on online grocery purchases (excluding Target, Walmart and wholesale clubs)
2x points on all other travel
- 1x on everything else
Chase is known for how broadly it defines these bonus categories. For example, travel purchases aren’t limited to flights and hotels — they also include ride-hailing, public transit and some parking fees. Similarly, the dining category includes meal delivery services, giving you plenty of opportunities to rack up points.
You have two main options when redeeming your points for travel. If your goal is simplicity, you can use your points to book any travel directly through the Chase travel portal at a fixed rate of 1.25 cents per point, turning your 60,000 points into $1,200 worth of travel purchases. If you don’t have enough points to cover your entire trip, you can mix points and cash.
Another benefit of booking directly with Chase is that you can also rack up bonus miles and elite qualifying miles with the airline you’re flying, as 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 points 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. So no matter where in the world you’re traveling, your points will help you get there and stay there.
Beyond Chase’s travel booking options, this card offers a large variety of benefits. First and foremost, there are no foreign transaction fees on this card.
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, your Preferred card can come to the rescue with some generous travel benefits.
At the top of the list is trip delay insurance. If your flight is delayed by 12 hours or more or 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 nonrefundable, 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 essential purchases such as clothing and toiletries.
Chase also offers some limited-time partnerships on the Sapphire Preferred, such as a complimentary DoorDash DashPass membership where you’ll enjoy at least a year of unlimited free food delivery. 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.
Chase cards work better together
You may have already started collecting Ultimate Rewards points, one of the most valuable and versatile loyalty currencies available. As long as you’re eligible to apply for the Preferred (more on that below), owning this card can actually make your existing collection of Chase cards even stronger.
The no-annual-fee Chase Freedom Flex and Chase Freedom Unlimited are valuable cash-back cards. But if you also hold an Ultimate Rewards-earning card such as the Chase Sapphire Preferred, the Chase Sapphire Reserve or the Ink Business Preferred Credit Card, your Freedom cards get even more rewarding.
The Freedom Flex earns 5% cash back (5 points per dollar) on your first $1,500 spent in rotating quarterly bonus categories (activation required). Meanwhile, the Freedom Unlimited earns 1.5% cash back (1.5 points per dollar) on purchases, making it a great card for those new to the world of credit cards and award travel.
The cash back earned from these cards is issued in the form of points worth one cent each. You can redeem your points for cash back, or 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 Preferred 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. Earn 1% on all other purchases. Once you move those points over to your Preferred, 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 Sapphire Preferred is a no-brainer the first year, as the sign-up bonus is worth a minimum of $1,200 (based on TPG’s valuations). Of course, the second year is always the true test for a travel rewards card, but the Preferred shines here as well.
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 such as 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 Citi Double Cash and Chase Sapphire Preferred have the same earning rate on non-bonus purchases.
The Chase Sapphire Preferred 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 $395 a month, you’ll break even on your annual fee. Add in 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 Chase Sapphire Preferred?
TPG Senior Editor Nick Ewen has made a compelling case for why the Chase Sapphire Preferred should be your first card. Unfortunately, not everyone can get this card, so let’s examine who should hold off on getting the Chase Sapphire Preferred.
The infamous 5/24 rule
Chase introduced the 5/24 rule a few years ago to combat credit card churning and attract long-term customers. Simply put, this means that you’ll be automatically rejected for any Chase cards — including the Sapphire Preferred — if you’ve opened five or more cards in the last 24 months. If this applies to you, don’t waste your time applying for the Sapphire Preferred. You won’t qualify and will receive a hard inquiry on your credit report.
Current Chase Sapphire cardholders
If you’ve received a sign-up bonus from another Chase Sapphire card in the last 48 months, you won’t be eligible for the current bonus on the Preferred:
“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 cardmember bonus in the last 48 months.”
If this applies to you, you shouldn’t apply until you’re outside of this 48-month window.
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 such as 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. Remember, you can always book any travel through the Ultimate Rewards portal and snag the 25% points redemption bonus. So, analyze your travel habits and see if branching out could add value to your points and miles strategy.
Chase Sapphire Preferred vs. Chase Sapphire Reserve
If you’ve made it this far — and you’ve confirmed that you’re eligible to earn the bonus on the Chase Sapphire Preferred and decided that Ultimate Rewards points fit well with your award travel strategy — the last question to ask yourself is whether the Sapphire Preferred is the best card for you, or if you should opt for the premium Chase Sapphire Reserve instead.
|Card||Chase Sapphire Preferred||Chase Sapphire Reserve|
|Earning rates||5x on Lyft (through March 2022),
5x total points on all travel purchased through Chase Ultimate Rewards
3x on dining
3x points on select streaming services
3x points on online grocery purchases (excluding Target, Walmart and wholesale clubs)
2x points on all other travel
1x on everything else
|10x on Lyft rides (through March 2022), 3x on travel and dining, 1x on everything else|
|Sign-up bonus||60,000 points after you spend $4,000 in the first three months of account opening.||50,000 points after you spend $4,000 on purchases in the first three months of account opening|
|Point value for UR portal redemptions||1.25 cents||1.5 cents|
|Credits||Up to $60 back on an eligible Peloton digital or all-access membership for 2021||$300 annual travel credit, up to $60 annual DoorDash credit for 2021, up to $100 Global Entry/TSA PreCheck application fee credit, up to $120 back on an eligible Peloton digital or all-access membership for 2021|
|Lounge access||N/A||Priority Pass Select membership|
|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; provides reimbursement up to the actual cash value of the rental car||Primary; provides reimbursement up to $75,000 for theft and collision|
|Roadside assistance||Service fees provided when you call and will be billed to your card||Coverage up to $50 per incident four times a year|
|Trip cancellation insurance||Up to $10,000 per covered person for up to $20,000 per covered trip||Up to $10,000 per covered person for up to $20,000 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 applying for the Chase Sapphire Reserve because it comes with a $550 annual fee (vs. $95 on the Sapphire Preferred). But the 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 Sapphire Reserve also has a long list of premium travel benefits, but let’s focus on the travel credit and the elevated 3x 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 (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 Reserve’s benefits. If not, then the Sapphire Preferred 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.
Application link: Chase Sapphire Preferred Card available with 60,000 bonus points.
Additional reporting by Stella Shon.
Featured photo by Wyatt Smith for The Points Guy.
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