Why you’ll want to pay the $95 annual fee on the Chase Sapphire Preferred
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While the card’s annual fee is $95, there are plenty of reasons you might not mind paying it. Not only does the card earn valuable Ultimate Rewards points, which can be transferred to over a dozen airline and hotel partners, but it also has some other value-added perks and of the best travel and purchase protections around. That’s why you might want to consider it instead of one of the many other starter travel cards that do not charge annual fees.
Here’s how you can potentially get much more value from the Chase Sapphire Preferred than it costs to carry each year.
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Generally, cards that come with annual fees tend come with higher sign-up bonuses, too. While you shouldn’t make a habit of applying for cards purely for the sign-up bonus when you don’t plan to keep it long-term, it can be a great perk that helps offset the first-year cost of a card.
The Chase Sapphire Preferred currently offers 60,000 bonus Ultimate Rewards points after you spend $4,000 on purchases in the first three months from account opening.
TPG values 60,000 Ultimate Rewards points at $1,200 because of the program’s array of transfer partners. But even if you’re not maximizing your redemptions and only getting only 1.25 cents per point in value by redeeming directly for travel purchases made through Chase, that’s still $1,000.
25% redemption bonus through Chase Travel
Speaking of which, Chase Sapphire Preferred cardholders get what amounts to a 25% bonus on their points when redeeming them specifically for travel bookings made through the Chase Ultimate Rewards portal, meaning points redeemed this way are worth 1.25 cents apiece rather than just 1 cent.
Let’s say you book a flight for $500. If you’re using a cash-back card or one that offers points redemptions at 1 cent apiece, that flight will cost you 50,000 points. However, if you have the Chase Sapphire Preferred and book the same $500 flight booked through the Chase Ultimate Rewards portal, it will only cost 40,000 points because of the 25% redemption bonus the card offers. The 10,000 points you save by having the Chase Sapphire Preferred are worth more than the card’s annual fee by themselves.
Each account anniversary you’ll also earn bonus points equal to 10% of your base earning on total purchases made in the previous year. That means if you spend $25,000 on purchases, you’ll get 2,500 bonus points.
Annual $50 hotel credit
One relatively new perk added to the card is the ability to earn up to $50 in statement credits each account anniversary year for hotel stays purchased through the Chase Ultimate Rewards portal. To utilize this perk, just log into the Chase Ultimate Rewards portal, and if you have multiple Chase cards, make sure your Sapphire Preferred is the account selected.
Then click on the “Travel” redemption option, search for hotels and make your booking. It’s as simple as that. In our experience, the statement credit usually shows up within one to two business days.
Just remember that if you book your hotel stay through the Ultimate Rewards portal, you probably won’t earn any hotel points or elite night credits, nor enjoy any benefits of elite status you might expect when booking directly through a hotel.
Earning and redeeming points
Aside from those perks, the Chase Sapphire Preferred accrues points at the following rates:
- 5 points per dollar on travel booked through the Chase travel portal.
- 3 points per dollar on dining, select streaming services and online grocery store purchases (excludes Target, Walmart and wholesale clubs).
- 2 points per dollar on all travel not booked through the Chase travel portal.
- 1 point per dollar on everything else.
Points can be transferred to 11 airline partners — including British Airways, Singapore Airlines, Southwest Airlines and United — and three hotel partners, including IHG, Hyatt and Marriott. They can also be used to purchase airfare, reserve hotel rooms and even rent a car — all at a fixed rate of 1.25 cents per point through the Chase travel portal. And you don’t have to worry about blackout dates or finding award space when booking through the portal because as long as there’s a seat for sale on the flight you want, or a hotel room available to reserve with cash, you’ll be able to pay for it with your points.
While the Chase Sapphire Preferred doesn’t come with a long list of luxury benefits like The Platinum Card® from American Express, it does offer a few perks that can make the annual fee worth it.
Trip cancellation/interruption insurance. If your trip is canceled or cut short by sickness, severe weather and other covered situations, you can be reimbursed up to $10,000 per person and $20,000 per trip for your pre-paid, non-refundable travel expenses, including passenger fares, tours, and hotels.
Auto rental collision damage waiver. Decline the rental company’s collision insurance and charge the entire rental cost to your card. Unlike most other cards, coverage on the Chase Sapphire Preferred is primary and offers reimbursement up to the actual cash value of the vehicle for theft and collision damage for most rental cars in the U.S. and abroad.
Baggage delay insurance. Get reimbursed for essential purchases including toiletries and clothing for baggage delays over six hours, up to $100 a day for five days.
Trip delay reimbursement. If your travel is delayed more than 12 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket.
Travel and emergency assistance services. If you run into a problem away from home, call Chase’s benefits administrator for legal and medical referrals or other travel and emergency assistance. Cardholders are responsible for the cost of any goods or services.
Purchase protection. Covers new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.
Extended warranty protection. Extends the time period of the U.S. manufacturer’s warranty by an additional year, on eligible warranties of three years or less.
There are many ways that the Chase Sapphire Preferred card’s annual fee can be worth the cost. Even without a long list of luxury benefits such as lounge access or automatic hotel elite status, you can easily get $95 worth of value each year from the Chase Sapphire Preferred thanks to the versatility of the points it earns and that $50 annual hotel statement credit.
Of course, if you have other credit card pairings that give you comparable or even more value (such as TPG Senior Writer Katie Genter’s Ink Business Preferred Credit Card alongside her husband’s Chase Sapphire Reserve), having the Chase Sapphire Preferred on top of that may not be worth it in the end.
But if you are a beginner still wondering if the card’s $95 annual fee is worth it, if you maximize even one of the benefits listed above, the Chase Sapphire Preferred is definitely worth applying for — annual fee and all.
Featured image by Wyatt Smith / The Points Guy.
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