February 19, 2018
Review: Chase Sapphire Preferred Credit Card
Chase issues some of the best travel credit cards available right now. People often ask me which credit card to get when they see how much I travel. While that’s a very personal decision based on your finances and travel objectives, the Chase Sapphire Preferred is typically one of two credit cards I recommend get first.
The Sapphire Preferred offers 50,000 Ultimate Rewards points after spending $4,000 in the first three months of account opening. You can earn an additional 5,000 points after adding your first authorized user and making a purchase with the authorized user card in the same three months. Ultimate Rewards points are much more valuable than cash back points. More on that below.
The Sapphire Preferred earns 2x Ultimate Rewards points per $1 on travel and dining purchases, and 1x point per $1 on everything else. These categories are defined very broadly. Things like restaurants, food trucks, hostels, cruises, ferries, parking meters, etc are all eligible.
There’s two ways to redeem Ultimate Rewards points. First, you can use points to book airfare, hotel rooms, activities in cities around the world, rental cars, and cruises through Chase’s travel portal. You’ll get a flat 1.25 cents per point by redeeming this way. For example, you could redeem the 50,000 point sign-up bonus for $625 worth of plane tickets (50,000 x 1.25 cents=$625).
The second way to redeem Ultimate Rewards points is to transfer them to Chase’s travel partners and book travel directly through them. Chase points can be transferred to the following loyalty programs-British Airways, Korean Air, Singapore Air, Southwest, United, Virgin Atlantic, Flying Blue, Aer Lingus, Iberia, Hyatt, Marriott, IHG, and Ritz-Carlton.
Transferring points to airline and hotel loyalty programs is a tad more complicated than just redeeming them for 1.25 cents each. But the tradeoff is you get much more value per point. Here’s one example-you can transfer 110,000 points to Virgin Atlantic and then use those points to book a roundtrip flight between the West Coast and Japan in ANA First Class. Those flights typically sell for around $18,000. Redeeming your points for that booking would net you an astronomical 16 cents per point ($18,000/110,000).
My point here is that you generally shouldn’t be redeeming Chase points for 1.25 cents through Chase’s travel portal. Transfer the points to an airline or hotel program and redeem them for luxury accommodations to maximize your value per point.
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 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. Coverage is primary and provides 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
Reimburses you for essential purchases like toiletries and clothing for baggage delays over 6 hours by passenger carrier up to $100 a day for 5 days.
Trip Delay Reimbursement
If your common carrier 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.
Covers your 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.
The Sapphire Preferred has a $0 introductory annual fee the first year. After that it’s $95 a year. There are no foreign transaction fees.
Should You Get It?
Ultimate Rewards points are one of the most valuable travel currencies right now. You can typically redeem the 50,000 point sign-up bonus for between $625-$8,000 (the more expensive the award you’re booking, the higher the value per point). Based on the sign-up bonus alone and the fact that there is no annual fee the first year, it absolutely makes sense to get the Sapphire Preferred. It also has a solid points earning structure. 2x Chase UR points per $1 on travel and dining is great. And there’s no foreign transaction fees so it’s great to use abroad as well.
The only comparable Chase Ultimate Rewards earning credit card that outshines the Preferred is the Sapphire Reserve. The Reserve is basically the Preferred on steroids. It comes with all the perks of the Preferred with the added benefits of Priority Pass lounge access, 3x UR points per $1 on travel and dining, a $300 annual travel credit, and Global Entry/TSA Pre-Check fee credits. The only downside of the Reserve is the higher $450 annual fee.
If you do a lot of traveling and don’t mind the $450 annual fee (keep in mind the Reserve comes with a $300 annual travel credit), I’d go with the Reserve since you’ll get lounge access and earn 3x on travel and dining. If you’re not a huge traveler and just want to try this out before committing, I’d go with the cheaper Sapphire Preferred.