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There are a lot of great credit cards out there, and there’s not a single card that’s going to be best for everyone. When it comes to applying for a credit card, I always recommend factoring in the welcome bonus, return on everyday spend, and perks.
I’ve reviewed the Chase Sapphire Preferred® Card, but now that it has been over two years since the Chase Sapphire Reserve® Card was introduced, I figured it was time for an updated review on what was once almost the undisputed best travel credit card. I’ll also contrast both the Sapphire Preferred and Reserve, to look at who is better off getting what version of the card.
I consider the Chase Sapphire Preferred Card to be one of the most well rounded cards out there, and also one of the best cards for beginners, given that it has a generous welcome bonus, waived annual fee the first year, good return on spend, and excellent perks.
For those of you already familiar with the card, by all means skip this post (after all the card has been around since 2009, and I know many of you have this card already). But this remains one of the best cards for travel rewards, and it always amazes me how many people don’t have this card or the Sapphire Reserve.
Chase Sapphire Preferred welcome bonus
The details of the best cards are constantly changing, be it the welcome bonus, perks, etc. The Chase Sapphire Preferred has been offering its best publicly available welcome bonus for some time now, with a very generous welcome offer:
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That”s $625 toward travel when you redeem through Chase Ultimate Rewards®
Beyond that, the card’s $95 annual fee is waived the first year.
Assuming you earn all 50,000 Ultimate Rewards points, those can be redeemed for $625 towards a travel purchase when you redeem through the Chase Ultimate Rewards portal. As I’ll talk about below though, the better value is generally transferring the points to one of the Ultimate Rewards hotel or airline partners. Personally I value Ultimate Rewards points at ~1.7 cents each, so to me 50,000 points are worth $850.
Why you should apply for this card first
In the past few years Chase has added the “5/24 rule.” With this rule, they typically won’t approve you for many of their cards if you’ve opened five or more new cards in the past 24 months.
For many people this is of course not an issue. But it’s something to be aware of, and is a reason to apply for the Chase Sapphire Preferred ahead of other cards.
Chase Sapphire Preferred earning rates
Back in the day this card was a true trendsetter, and one of the only travel rewards cards to offer bonus points on dining. Nowadays more cards offer such bonuses (including the Citi ThankYou® Premier Card and American Express® Gold Card), though I still consider the return on this card to be solid. Specifically, the Chase Sapphire Preferred offers:
- 2x points on travel (includes airfare, hotels, car rentals, subway tickets, taxis, parking, etc.)
- 2x points on dining (includes restaurants, coffee shops, etc.)
- 1 point per dollar on all other purchases, with no limits
It’s also worth noting that unlike some other cards, the double points on travel with the Chase Sapphire Preferred include not just airfare purchased directly with an airline, but also airfare purchased through online travel agencies, and I’ve found their definition of “travel” to be quite generous.
With the Chase Sapphire Preferred, the following categories are included as “travel:”
airlines, airports, car rental agencies (including truck, trailer, and RV), cruise ships, hotels and motels, timeshares, local and commuter transportation (including trains, buses, taxis/limos, ferries, bridges, tolls and parking), travel agencies
You can earn bonus points even on train tickets with the Sapphire Preferred
Chase Sapphire Preferred rewards program
The Chase Sapphire Preferred earns Ultimate Rewards Points, which I find to be one of the most valuable flexible points currencies.
Ultimate Rewards points transfer at a 1:1 ratio to the following programs:
|Aer Lingus Aer Club||IHG Rewards Club|
|Air France/KLM Flying Blue||Marriott Rewards|
|British Airways Executive Club||Ritz-Carlton Rewards|
|Iberia Plus||World Of Hyatt|
|Southwest Airlines Rapid Rewards|
|Virgin Atlantic Flying Club|
Points are also worth 25% more when redeeming for travel through the Ultimate Rewards portal. So you can apply points towards any “revenue” ticket at a rate of 1.25 cents per point.
That means that a $625 flight will cost you 50,000 Ultimate Rewards points, though you’re almost always going to get a better value by transferring points directly to the airline or hotel partner.
For example, you could transfer 25,000 points to World of Hyatt for a free night redemption at the Park Hyatt Maldives.
Redeem your Ultimate Rewards points for a stay at the Park Hyatt Maldives
Chase Sapphire Preferred benefits
The Chase Sapphire Preferred is issued as a Visa Signature, which gives you access to all of those perks, such as the Visa Signature Luxury Hotel Collection. You also receive the following benefits with the card:
|Visa Signature Benefits||Details|
|Baggage Delay Benefit||• You can be reimbursed up to $500 when some or all of the cost of a common carrier ticket is charged to your card (therefore award tickets should be eligible if the taxes are charged to the card)
• You can be reimbursed a maximum of $100 per day for emergency purchases of essential items at a destination other than your current residence
|Lost Luggage Reimbursement||• Receive reimbursement for lost or damaged checked or carry-on bags and personal property
• Maximum reimbursement is $3,000
|Trip Cancellation/Interruption Insurance||• Receive the non-refundable amount of the passenger fare or $5,000 (whichever is less) in the event of a trip cancellation or interruption
• The cancellation or interruption must be caused by death, accidental injury, disease, or physical illness of the passenger or immediate family member
• This also covers you if your airline goes out of business or tickets are otherwise cancelled by the carrier
|Trip Delay Reimbursement||• Receive up to $300 if your trip is delayed for more than 12 hours
• The trip has to be delayed by an equipment failure, inclement weather, labor strikes, or hijacking
|Price Protection||• Receive up to $500 if you purchase a product and find it advertised for for less within 90 days of purchase (the difference in price is refunded to you)
• The advertisement has to be printed, and doesn’t include internet retailers, so this won’t be useful for many of us
|Warranty Manager Service||• Extends the free repair period under the original manufacturers repair warranty up to one additional year
• Motorized vehicles (boats, cars, aircraft, etc.) aren’t included
Other cool features of the Chase Sapphire Preferred
Primary CDW coverage on rental cars
The Sapphire Preferred offers primary insurance against damage up to the cost of most rental car vehicles provided you decline the CDW coverage offered by the rental agency. This includes economy through luxury class vehicles, vans that carry fewer than seven passengers, and SUVs.
Collision damage waiver coverage on car rentals is a valuable perk of the card
Shop Through Chase
Having the Sapphire Preferred gives you access to Shop Through Chase, which is the card’s online shopping portal and can really accelerate the points you earn. By “clicking through” the portal you can earn extra points per dollar with purchases at dozens of online retailers.
I earn several thousand extra points each year on purchases I would have made anyway just by clicking through the Shop Through Chase portal first.
Great customer service
While I try to do as much as possible online, I find that in situations where I have to call Chase, the customer service is excellent. They don’t have some of the annoying phone prompts that other issues have, and I’m almost always connected to an agent right away.
How does this compare to the Chase Sapphire Reserve?
Two summers ago Chase introduced the Chase Sapphire Reserve Card, which quickly became super popular due to its huge welcome bonus and great benefits. For many people, the Chase Sapphire Reserve is a better option than the Preferred. Let’s compare the cards across a few areas:
The Chase Sapphire Preferred offers a welcome bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months. The Chase Sapphire Reserve offers the same welcome bonus up to 50,000 points.
The Chase Sapphire Preferred has a $95 annual fee, which is waived the first year, while the Chase Sapphire Reserve has a $450 annual fee, which isn’t waived the first year.
Return on spend
The Chase Sapphire Preferred offers double points on dining and travel, while the Chase Sapphire Reserve offers triple points on dining and travel.
There are a few points of differentiation for the Chase Sapphire Reserve:
- It offers a $300 annual travel credit
- It offers a Priority Pass membership
- It offers a TSA Pre-Check or Global Entry fee credit of up to $100 every four years
- It allows you to redeem points for 1.5 cents each towards the cost of a travel purchase, rather than 1.25 cents each
- It offers Visa Infinite perks, which include things like 30% off a Silvercar when renting for two or more days
If you value a Priority Pass membership, the Sapphire Reserve may be a better option
So, how do the numbers work out?
Let’s say that the $300 annual travel credit is more or less worth face value. I value Ultimate Rewards points at 1.7 cents each, and by using the travel credit you’re forgoing 3x points per dollar spent, so we’ll say the $300 credit is worth ~$285.
So your real “out of pocket” difference between the two cards is $165 the first year, and $70 in subsequent years:
- If you value a Priority Pass membership, that could more than justify it; however, I know many of us already have such a membership through other cards, like The Platinum Card® from American Express
- If you value the ability to redeem points for 1.5 cents each towards the cost of a travel purchase, that’s another advantage; personally I’ve never redeemed my Ultimate Rewards points that way, since I’d rather transfer them to an airline or hotel transfer partner
- So it comes down to how much you spend on dining and travel, as you’re earning an incremental return of ~1.7% on those purchases on the Reserve over the Preferred; that makes the breakeven point on spend for the $70 per year “out of pocket” difference somewhere around ~$9,700 the first year and $4,100 in subsequent years, though this only factors in the spend you’d put on this card and not what you’d spend on other cards (for example, I put my airfare spend on The Platinum Card® from American Express to earn 5x points, so wouldn’t count that towards the total)
Everyone has to crunch the numbers for themselves, but there’s potentially merit to both cards.
My recommended strategy with the Sapphire Preferred vs. Reserve
Both cards are excellent, though it’s worth being aware that you can typically product change from one card to the other, assuming you’ve had it for at least 12 months. So one potential strategy is to apply for the Chase Sapphire Preferred since it has its annual fee waived for the first year and to try out the program.
Then you can see how your spend patterns work out, and how much you take advantage of the card benefits. Then after a year you can always decide to upgrade to the Chase Sapphire Reserve Card. If you redeem your points after upgrading you can redeem them all for 1.5 cents towards a travel purchase, even if they’re points you acquired before product changing.
Cards to consider instead of the Sapphire Preferred
Nowadays the Chase Sapphire Preferred has some cards in its competitor set, so let’s take a look at how they compare, and how to decide which card is best for you:
The Citi ThankYou Premier
I’d say the Citi ThankYou® Premier Card is the most direct competitor to the Sapphire Preferred, and is seriously worth considering. The card offers triple points on travel and gas, and double points on dining and entertainment, so the bonus categories are actually better than on the Sapphire Preferred.
The card has a $95 annual fee that’s waived for the first year, so in that regard it’s the same as the Sapphire Preferred.
ThankYou points can be redeemed for 1.25 cents each towards the cost of airfare (and only airfare, and not other travel purchases, unlike the Sapphire Preferred) and there are also some great ThankYou partners, which I’d say are comparable in value to Ultimate Rewards.
The card also offers solid travel protection.
The Amex Gold Card
Amex just recently introduced the American Express® Gold Card, which offers 4x Membership Rewards points for dining at U.S. restaurants, 4x points for purchases at U.S. supermarkets (on up to $25,000 of spend per year), and 3x points on airfare purchased directly from airlines.
Those are some spectacular bonus categories, though the limitation on only being able to earn bonus points at U.S. restaurants and supermarkets is significant, especially for those who travel a lot.
The card has a $250 annual fee, though offers a $100 annual airline fee credit and up to $120 annual dining credit to offset it, though both of those benefits come with quite a few terms.
This card also doesn’t offer any real travel or car rental protection. So I think this is a great card for maximizing spend, though it’s not particularly well rounded, if you’re looking for a single card.
The Chase Sapphire Preferred has been around for almost a decade, and continues to be one of the all around most lucrative travel credit cards.
The card has a great welcome bonus, excellent return on dining and travel spend, great customer service, and some useful perks, like primary collision coverage, no foreign transaction fees, etc.
Furthermore, given Chase’s rules for approving new cardmembers, this is a card you’ll want to apply for early on, if possible. Even if you’re someone who otherwise avoids cards with annual fees, it can make sense to have at least one premium card for things like no foreign transaction fees, car rental coverage, etc.
For some the Chase Sapphire Reserve might be a better option, especially if you don’t otherwise have a Priority Pass membership or if you spend a lot on dining and travel. Regardless, one of these two cards should be in your wallet.