Does the Chase Sapphire Preferred need a revamp?
Update: Some offers mentioned below are no longer available. View the current offers here.
When I applied for the Chase Sapphire Preferred Card back in 2011, it was arguably the best rewards card out there. Aside from the sign-up bonus, the card offered valuable perks like a (discontinued) 7% annual point dividend, access to the Chase Ultimate Rewards program, 2x points on dining and travel and a reasonable $95 annual fee. It was the go-to card for most points and miles enthusiasts and became so ubiquitous, it even earned a cameo in an episode of "No Reservations."
It was by far the best in its class, but that has changed over the years. The credit card landscape has become more competitive, with banks such as Citi and American Express offering similar (and, some might argue, better) cards. To put it in simple terms -- the Sapphire Preferred is due for a revamp. Here are three ways Chase can improve on this card.
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Offer more transfer bonuses
The Ultimate Rewards program is straightforward and easy to use, regardless of how you redeem your points. You can cash them out at 1-1.5 cents per point, redeem them for travel at a rate of 1.25-1.5 cents each or you can transfer them to one of Chase’s partners for higher-value redemptions. United is a popular airline transfer partner, thanks to its massive Star Alliance network and easy online redemption process. On the hotel side, Hyatt offers tons of value thanks to a reasonable award chart.
However, one major downside to the program is the lack of transfer bonuses. Points transfer 1:1, but there are no regular promotional bonuses like the ones Membership Rewards runs from time to time. In fact, in all the years the Ultimate Rewards program has been operational, it has only offered three transfer bonuses – two of them last year.
Meanwhile, Citi and Amex regularly run transfer promotions offering bonuses of 20% or higher. This is a great way to get more value out of your flexible rewards points. I would love to see Chase introduce similar transfer incentives to stay competitive with Amex and Citi.
Add new category bonuses
Ten years ago, earning 2x points on dining and travel seemed like a big deal. Premium credit cards were offering upwards of 5x in these categories, but between the sign-up bonus and top-notch rewards program, this was a solid return on spending. TPG currently values Ultimate Rewards at 2 cents each, so these returns aren’t terrible; however they don’t quite stack up against competing cards such as the Citi Premier® Card.
The Citi Premier earns 3x points per dollar at restaurants, supermarkets, gas stations, air travel and hotels. With ThankYou points valued at 1.7 cents each, that equates to a 5.1% return on arguably the biggest spending categories.
Grocery stores and gas stations are major spending categories for most people. And while Chase introduced temporary grocery bonuses, they expired last summer. For many travel rewards enthusiasts, the Chase Sapphire Preferred is their first reward card and many of these folks don't want a wallet full of cards for long-term use. Chase can capitalize on this by expanding category bonuses to include grocery stores and gas stations.
Offer card perks
I’ll hand it to Chase – the DoorDash DashPass benefit is pretty awesome. It has saved me a lot of time and money on delivery fees on days when cooking is just not possible. However, this benefit expires on Dec. 31, 2021. The 5x Lyft benefit expires in March 2022 and the $60 Peleton credit is only useful for a small subset of cardholders who have a Peleton machine.
Chase can get more competitive here by adding a statement credit such as the Citi Premier's $100 hotel booking credit (on a single hotel stay of $500 or more; excluding taxes and fees booked through thankyou.com each calendar year) or by offering a couple of Priority Pass lounge passes annually. This might be a bit of a stretch for a card with a $95 annual fee, but people are looking for value from their rewards credit cards and 2x points along with travel protection doesn't cut it for the average cardholder.
A more impactful change would be to revamp Chase Offers so that it provides more substantial discounts. Many Amex cardholders (myself included) can justify paying high annual fees by taking advantage of Amex Offers throughout the year. Better deals could add up to hundreds of dollars in savings, adding tremendous value to the Chase Sapphire Preferred.
The Chase Sapphire Preferred has a lot going for it. It still remains my go-to recommendation to most newbies because of its reward program. It still offers valuable purchase and travel protections that Citi has done away with.
However, with competing cards offering superior category bonuses and perks, it might be time for Chase to give this card a boost. Adding useful category bonuses and occasional transfer promotions will make the Sapphire Preferred much more practical for everyday use.