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One of the most popular credit cards has gotten quite a few changes in recent months. You probably have heard of it. I’m talking about the Chase Sapphire Preferred. It has been around for a while, but the recent changes have made it even better. The Chase Sapphire Preferred is usually recommended to someone who is just getting started, and there are good reasons for that. Here’s a full rundown of the benefits, features, and what I think of the card.
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Chase Sapphire Preferred Sign-Up Bonus
A sign-up bonus (SUB) is the large amount of points you’ll get after being approved for a card and spending a certain amount of money on it within a set time period (typically 3 months). The sign-up bonus for the Chase Sapphire Preferred just increased and is up to 80,000 Ultimate Rewards points, after spending $4,000 within three months of opening the account. This is an increase of 30,000 points compared to the usual offer!
Earning Points with the Chase Sapphire Preferred
Most rewards credit cards give bonus points for specific categories of spending. Categories are things like grocery, gas, hotel, dining, and so on. Here are the Sapphire Reserved bonus categories:
- 5x points on travel purchased through the Chase Travel Portal*, otherwise 2x
- 5x on Peloton Bike and Tread purchases, up to $5,000 (until June 30!)
- 3x on dining, including delivery services
- 3x on online grocery (excluding Target and Walmart)
- 3x on streaming services
- 1x on all other purchases
* I do not recommend booking flights via any travel portal, not just the Chase Travel Portal. Always book them directly through the airline. When/if something goes wrong (flight cancellations, delays, etc.), it will be much harder for you to get help from the airline as they don’t actually control your ticket.
Also, you earn a 10% bonus on your card anniversary date. I wish this were on the points you earned, but it’s on the money you spent. If you spent $25,000 for the year, you’d get an extra 2,500 points. It’s not a big boost, but I value that at just under $50!
Chase Sapphire Preferred Benefits
As with most rewards credit cards, there’s a slew of benefits that come with the card. Some aren’t unique to the Sapphire Preferred, but some are. Here’s the complete list of benefits that come with the CSP.
Transfer to Travel Partners
The points that are earned from the Chase Sapphire Preferred, known as Ultimate Rewards points, are transferrable, at a 1:1 ratio or better, to almost a dozen different airlines and three different hotel chains.
$50 Hotel Credit
Each year, the Sapphire Preferred gives you a $50 hotel credit. That sounds nice, but that is only if you book a hotel through the Chase Travel Portal. Hotel chains (such as Hilton, Hyatt, etc.) view these bookings as third-party bookings. Thus you won’t get elite recognition or hotel points for what you paid.
If you typically stay at a non-chain hotel or different chains, then this will be a bigger benefit to you as it will be easier for you to make use of it. Even if you prefer to stay at chain hotels where you can earn points or elite nights, it might still make sense for you. Make sure you weigh your options.
No Foreign Transaction Fees
This benefit isn’t unique or exclusive to the Chase Sapphire Preferred, but it’s still nice to have. When you use a credit card in a different country, there’s a fee for the bank to convert the amount to US Dollars. It’s usually about 3%. While it doesn’t seem like that much of a difference, imagine if you were charged 3% more for everything when you travel. It quickly adds up!
Rental Car Collision Damage Waiver
As long as you charge your rental car to the Sapphire Preferred, you get CDW included. Car rental companies charge over $15/day for this. This is a pretty valuable benefit if you rent cars often. Every time I do, I make sure I put it on my CSP!
Redeeming Chase Ultimate Rewards Points
There are several different ways to redeem Ultimate Rewards points. Just remember, not all of them are recommended.
Cash Them Out
This is among the worst ways you can redeem points. You’ll only get 1 cent per point and there are other redemptions that are more valuable. Do NOT do this!
Redeem for Gift Cards or other Products
This is another bad way to redeem your points. You’ll get the same value as if you cashed them out, but then you’re stuck using what you get at the retailer you bought the gift card for – even worse than getting cash!
Redeeming Points for Travel
When you book using the Chase Travel Portal, you can use points. When doing this each point is worth 1.25 cents. So the sign-up bonus is worth at least $1,000. While it is better than cashing them out or getting a gift card, you should consider this the minimum value to use your points.
Pay Yourself Back
For a limited time, Chase is allowing you to use Ultimate Rewards points for statement credits against purchases in specific rotating categories. Each point is worth 1.25 cents each this week. Chase introduced this redemption in 2020, and it was a good deal when travel wasn’t happening. It’s not really something I recommend, but it is better than redeeming points through the portal.
Transfer to Airline or Hotel Partners
Chase UR points transfer, one for one, to several hotels and airlines. Points are transferrable in increments of 1,000. You can then use those to book hotels or flights. Points transfer nearly instantly for most of the airlines and hotels listed. If it isn’t instant, it usually only takes a day or two.
The airline transfer partners are:
- Aer Lingus
- Aeroplan (Air Canada)
- British Airways
- Emirates
- FlyingBlue (Air France/KLM)*
- Iberia
- JetBlue
- Singapore
- Southwest
- United
- Virgin Atlantic*
* There is currently a 25% transfer bonus to Flying Blue and a 30% bonus to Virgin Atlantic. This is for a limited time and could end anytime.
The hotel transfer partners, in ascending value, are:
- IHG
- Marriott
- Hyatt
I value IHG points at roughly 0.5 cents a point, so I don’t recommend transferring points unless there is a significant transfer bonus. On the other hand, I value World of Hyatt points at 2+ cents per point. Marriott Bonvoy points are on the low end, as well, at around 0.7 cents per point.
The value of the points depends on what you redeem them for. Let’s take a $5,000 business class ticket. If you bought it via the portal (as described above), you’d need 400,000 points. You’d only need to transfer 60,000-70,000 points to an airline for that ticket. That’s just a rough estimate, but even if you needed 100,000 points for that $5,000 ticket you’d still get a valuation of 5 cents per point.
One thing to keep in mind is you can’t transfer them back to your UR account. Once they’re in one of those transfer partners, they’re stuck unless you use them. Make sure what you want to book is available before transferring.
My Take on the Chase Sapphire Preferred
In case it isn’t obvious, I’m a big fan of the Chase Sapphire Preferred and Ultimate Rewards points. This is one of the cards that I usually recommend for someone getting started earning miles & points. If you don’t have a Chase card that earns Ultimate Rewards points, I highly recommend getting one. Let me know if want help figuring out the best next steps. The current sign up bonus can go away at any time so act now.
