Money at 30: Chase Sapphire Preferred Credit Card Review
Ever since my financial awakening and my decision to start using credit cards again, an obvious trend has developed. You see, anytime I get a new card and say to myself (and to my wife), “I think we’re all set now,” I inevitably find another card that tempts me with its rewards. That’s what happened with the Chase Sapphire Preferred — except that it wasn’t the card’s primary rewards that lured me, it was purely the welcome bonus. I actually wrote about this conundrum previously since, on the whole, I’m the type of person who wants to hold a credit card long term and, thus, want it to make sense in my set-up. Yet, even though the Sapphire Preferred’s ho-hum category multipliers did little to nothing for us, my wife went ahead and applied for the card anyway. Funny enough, a couple of months later, Chase revamped the card with new benefits, rewards categories, and more.
So, what do I think of the new Chase Sapphire Preferred and am I glad to now have it in our mix? Let’s take a look at what the card entails, how redemptions work, and my thoughts overall.
What Chase Sapphire Preferred Has to Offer
About the Chase Sapphire Preferred (including the annual fee)
The Sapphire Preferred is usually regarded as the little sibling to Chase’s incredibly popular Sapphire Reserve card. On that note, it’s important to point out that customers can only hold one Sapphire card at a time. Those who might ‘prefer’ the Preferred over the Reserve include those looking for a lower annual fee, those just getting started in the “point and miles” game, and those who might not travel quite often enough to get the full benefits of the Reserve.
Speaking of annual fees, the Chase Sapphire Reserve comes at a cost of $95 per year. While this is far lower than the Reserve’s $550 annual fee, it’s not insignificant. Finally, I also feel a need to mention that the card is made of metal, which has become quite a trend and especially appeals to a certain demographic.
The welcome bonus we got
As I noted in my intro, my initial interest in the Chase Sapphire Preferred card was limited to the welcome bonus it was pedaling. So what was this amazing bonus? Well, we were able to earn 100,000 Chase Ultimate Rewards points after spending $4,000 on the card in our first three months. This bonus amounts to $1,000 in value for cashback or $1,250 if redeemed for travel (more on that differential later). The $95 annual fee was not waived, so that cut into our reward a bit — but the $1,000+ bonus for spending a reasonable and achievable $4,000 was just too good to pass up.
At the time I’m writing this, the 100,000 welcome bonus is still being offered. However, there’s no telling how long it will stick around. Therefore, if you (like me) find this to be appealing, it may be worth making a decision sooner rather than later.
Even though the welcome bonus was calling to me, one of the reasons I resisted the Sapphire Preferred for as long as I did was because I found the rewards categories to be lackluster. At the time, the card mainly just offered 2x points on dining and 2x points on travel — rates that were beaten by other cards I already owned. However, in August 2021, Chase revamped the Preferred card’s categories and multipliers to make it a bit more attractive.
Here’s what the Chase Sapphire Preferred currently offers in terms of rewards:
- 5x points on travel purchased through the Chase Ultimate Rewards portal
- 3x points on dining (including eligible delivery services, takeout, and dining out)
- 3x points on online grocery purchases (excluding Walmart, Target and wholesale clubs)
- 3x points on select streaming services
- 2x points on all travel purchases (including airfare, hotels, taxis, trains, etc.)
- 1x points on all other purchases
Going through these categories, there’s an obvious improvement over the previous line-up. For one, the 5x category provides a nice incentive to try out the Chase Ultimate Rewards travel portal when possible while still giving customers 2x points if they chose instead to book travel through other means. Elsewhere, the boost from 2x on dining to 3x is nice and is instantly more competitive. As for the other two 3x categories, they’re a little less impactful for me. First, limiting it exclusively to “online grocery” seems a bit weird to me and doesn’t move the needle in my case since my Amex Gold Card earns 4x at U.S. supermarkets, including online services like Instacart (in my experience at least). As for the 3x on select streaming services, while I definitely see the appeal here, but I don’t think this will be as lucrative for most people as they might think. Also, the no-annual-fee Capital One SavorOne also has 3% back on streaming now, so this addition doesn’t mean much to me personally.
With all that said, the difference here is that Ultimate Rewards points earned with the Chase Sapphire Preferred could be worth 25% more depending on how you redeem them, which does change the math on these categories a bit. We’ll talk much more about redemption options in a moment so just keep that in the back of your mind as we proceed.
Annual hotel credit
One perk that was added the Chase Sapphire Preferred in 2021 was the annual hotel credit. Now, cardholders can earn up to $50 in statement credits each account anniversary year when they book hotel stays via the Chase Ultimate Rewards portal. To be clear, this credit is only offered after your first renewal and subsequent cardholder anniversaries.
Because this credit is new and we’ve only been cardholders for a couple of months, we have yet to try this offer. However, this is an obviously awesome addition to the card and could honestly play a role in our decision whether or not to renew. We’ll have to wait and see.
Anniversary point bonus
Yet another new benefit recently added to the card is the anniversary point bonus. Each year, as they reach their account anniversary, cardholders will earn a point bonus equal to 10% of their total spending over the past year. That’s pretty confusing wording, but it works like this: if you spend $25,000 on purchases during the year, you’d earn a 2,500 point bonus.
This is an interesting idea, to be sure, but I don’t see it making too big of an impact for us. So while I certainly won’t turn up my nose at free points, this isn’t one of the top perks I’d mention to try to sell someone on the Sapphire Preferred.
Finally, before we move onto redemption options, I do want to mention Chase Offers. When you log into your account, you may see different offers from various brands that you can activate. For example, we found one for Best Buy offering 10% off up to $35, which came in handy when I purchased my new camera. Other recent Chase Offers that have popped up for us include 10% back at Red Robin, 20% back on Kindle Unlimited, $5 back on Walmart curbside pick-up or delivery, and more.
While Chase Offers don’t seem to be as plentiful or lucrative as Amex Offers, we’ve already made use of a few of them. Thus, I’m inclined to call this an underrated perk — even they may not be specific to the Sapphire Preferred itself. In any case, if I were you, I’d be sure to check out the Chase Offers section regularly to see what ways you can save.
Chase Sapphire Preferred Ultimate Reward Points Redemption Options
While the Chase Sapphire Preferred now has some decent reward multipliers on its own, its superpower comes not from earning points but from redeeming points. With the Sapphire Preferred, cardholders can earn a 25% bonus on their points when they use them for travel bookings on the Chase Ultimate Rewards portal or through Chase’s pandemic-era Pay Yourself Back program. Beyond that, there are even more ways to use your points — so let’s look at just some of the options.
Starting off easy, if you just want to cash in your points for, well, cash, that’s certainly an option. Sapphire Preferred customers can elect to redeem their Ultimate Rewards points for statement credits or have the cash deposited into a linked bank account. In either case, your points will be worth 1¢ each with this option.
I want to take moment to mention that this is one of the reasons I might prefer Chase Ultimate Rewards points to American Express Membership Rewards points in general. Although Amex’s currency has its own strengths, the 0.6¢ per point that customers get when redeeming for cashback is pitiful. Thankfully, Chase gives what I think is a fair rate here. Thus, while there may be better and more valuable options, those who just want to claim cash can feel pretty good doing so IMHO.
One of the advertised perks that come with the Chase Sapphire Preferred is that cardholders can earn ” 25% more value on travel.” This is achieved through the Chase Ultimate Rewards portal. On this portal (on the website or in the app), cardholders can search for flights, hotels, and more. Then, when completing their booking, customers can choose to pay with points instead of cash. When choosing this option, points will be redeemed at a rate of 1.25¢ each.
Obviously this is a pretty significant benefit. In fact, if you were to exclusively use your earned points for Ultimate Rewards travel redemptions, you’d effectively be earning 3.75% back on dining, online grocery, and select streaming purchases as well as 2.5% back on other travel purchases (not to mention 1.25% back on everything else). Because of this, using your Ultimate Rewards points for travel redemptions is one of your best bets.
Pay Yourself Back
With 2020 throwing more than a few curveballs, Chase introduced the Pay Yourself Back program, intended to help cardholders get more value out of their rewards at a time when travel was made more difficult. The program has continued to stick around, allowing Sapphire Preferred customers to earn 25% more for points they redeem toward specific purchases. Currently, Pay Yourself Back categories include Dining, Grocery Stores, Home Improvement Stores, and Select Charities. At this time, the first three categories are eligible through September 30th, 2021 while the charity component is valid through December 31st, 2022.
When you head to the Pay Yourself Back portal, you’ll see a list of qualifying transactions made over the past 90 days. In each case, you’ll see the amount of the transaction, the number of points it would typically cost you to claim a statement credit, and the adjusted point amount that you can spend instead. Once you select a transaction, you can then also elect to only cover a portion of the purchase in points (assessed at the same rate).
Given the uncertainty ahead, it’s unclear what will become of the Chase Pay Yourself Back program. Personally, I hope it sticks around as I’m definitely a fan. To me, this added level of flexibility is another win for the Ultimate Rewards currency and quite honestly makes me more interested in diving deeper into the Chase ecosystem.
In addition to booking travel directly through the Ultimate Rewards portal, you can also choose to turn your Chase points into points with various airlines and hotel chains. These transfer partners currently include:
- Aer Lingus
- Air Canada
- Air France/KLM
- British Airways
- Singapore Airlines
- Southwest Airlines
- United Airlines
- Virgin Atlantic
Notably, unlike American Express transfer partners that have varying exchange rates, all of Chase’s current partners transfer at a rate of 1:1. For example, 1,000 Chase Ultimate Rewards points could be turned into 1,000 Air France/KLM Flying Blue points. However, limited-time transfer bonuses may pop up, such as 30% bonus Avios when you transfer points to Aer Lingus, British Airways, or Iberia.
Although the standard 1:1 transfer rate makes this a bit easier to comprehend than some other point programs, this is still a more advanced redemption option. That said, some travelers may appreciate the presence of JetBlue and Southwest on this list as these points may prove easier to use directly. In any case, if you really want to get the most value with transfer partners, I’d suggest doing some digging to find the best option — which may even include transfer points to an airline you don’t intend to fly!
Another redemption option I want to mention briefly involves gift cards. Chase offers gift cards from a number of popular brands, with denominations starting at just $10 for some. Nearly all of these options value points at 1¢ each, however there are occasional sales. For example, as of this writing, cardholders can get 10% off Apple gift cards, allowing them to get a $200 card for 18,000 points.
Considering that the regular statement credit redemption rate is also 1¢ per point, there aren’t really very many reasons to go this route instead — unless, perhaps, if you planned on giving the gift card to someone else. Of course, those occasional sales on gift cards could make them worth it if you didn’t want to redeem for travel or Pay Yourself Back categories instead. Either way, at least it’s better than our final option…
Lastly, when I saw that Chase offered integration with Amazon, I was moderately excited. After all, I’ve enjoyed having the option to cash in my Discover or Capital One cashback directly on Amazon while making purchases. However, I then realized that, with Chase, Amazon redemptions only valued Ultimate Rewards points at 0.8¢ each. In other words, you’d be better off just buying the item and requesting a statement credit for the spent amount after the fact.
I’m not sure why the exchange rate is devalued here but I wouldn’t recommend this option. The one exception would be when Chase or other issuers occasionally offer discounts to Amazon shoppers who redeem points for their transaction. In these cases, the loophole is that you can use 1 Ultimate Rewards point to trigger the discount and pay the rest normally so that you can save your points for better redemptions.
Final Thoughts on the Chase Sapphire Preferred
Overall, the Chase Sapphire Preferred still isn’t my favorite card by any stretch, but it did get significantly more interesting after the recent revamp. With more competitive multipliers, the annual anniversary hotel credit, and, yes, that amazing welcome bonus, the card does definitely have some attractive features. Moreover, as I’ve grown more familiar with the Chase Ultimate Rewards currency, the more I’ve come to appreciate it. In particular, I see this ecosystem as being much more approachable for points and miles newbies who want to have a solid backup option in case their premium travel redemptions don’t work out.
When we first got the Sapphire Preferred, my initial plan was to downgrade it to a Freedom card or, counterintuitively, upgrade to a Sapphire Reserve in year two, but now I’m not so sure. With the $50 hotel credit partially offsetting the $95 annual fee and the 25% boost on travel redemptions still seeming worthwhile, perhaps I could be persuaded to hold the card for a bit longer. Meanwhile, those with fewer cards in their wallets that would take up tasks that the Chase Sapphire Preferred can do will likely find even more value in the card, once again making it a great starter option.
Also published on Medium.