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Chase Sapphire Preferred: Why It Should Be Your First Rewards Card

By: Julie Szpira

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For those who are new to the points and miles game, “Where do I start?” is probably the common question we hear. Once you’ve read our free e-book for beginners, you may still be left wondering how everything works.

As you might expect, there’s a bit of a learning curve to understanding the process of applying for credit cards, meeting minimum spends, earning sign-up bonuses and redeeming points for some fun travel experiences. Like anything else, this all becomes much easier as you learn more.

Unfortunately, “you’ll learn more as you go” doesn’t answer your question about where to start. So, to help you start off on the right foot, I’ll tell you the best place to start.

Get the Chase Sapphire Preferred Card.

Valuable Sign-Up Bonus, Waived Annual Fee

Each month, the 10xTravel staff discusses the current best credit card offers, and the Chase Sapphire Preferred Card has had a stronghold at our top spot for a number of months.

The current offer terms are:

  • 50,000 bonus points after you spend $4,000 on purchases in the first 3 months.
  • 5,000 bonus points when you add an authorized user and make a purchase in the first 3 months
  • 2X points per $1 spent on dining and travel, 1X point per $1 on all other purchases
  • Trip delay insurance
  • Primary rental car insurance
  • $95 annual fee, waived the first year

The Chase Sapphire Preferred Card also earns Chase Ultimate Rewards points, which can be redeemed through the Chase Ultimate Rewards portal for 1.25 cents per point, or transferred 1:1 to travel partners such as United Airlines or Hyatt.

The current sign-up bonus offer is 50,000 Ultimate Rewards points after meeting the minimum spend. Additionally, the Chase Sapphire Preferred Card also provides 5,000 bonus points for adding an authorized user, bringing your total bonus points to 55,000 points just for hitting the minimum spend and adding an authorized user. To top it off, the annual fee is waived for your first year with the card.

Using the 1.25 cent per point valuation through the Chase Ultimate Rewards travel portal, this bonus is the equivalent of $687.50 to spend on travel. If you’re strategic in your use of the points, you can get even more value out of those 55,000 points by transferring the points to one of the airline or hotel transfer partners.

Why Not the Chase Sapphire Reserve Card?

Due to restrictions Chase has implemented on the Chase Sapphire cards, new applicants are not able to hold more than one Chase Sapphire product. Since that restriction has been in place, applicants have had to choose between the Chase Sapphire Preferred Card or the Chase Sapphire Reserve Card.

The current offer on the Chase Sapphire Reserve Card is:

  • 50,000 bonus points after you spend $4,000 on purchases in the first 3 months.
  • 3X points per $1 spent on dining and travel, 1X point per $1 on all other purchases
  • $300 annual travel credit—if it codes as travel, it counts
  • Priority Pass Select Membership—provides access to 900+ airline lounges worldwide
  • $100 Global Entry/TSA PreCheck credit every 5 years
  • Trip delay insurance
  • Primary rental car insurance
  • $450 annual fee not waived first year

As you can see, the Chase Sapphire Reserve Card offers the same 50,000-point sign-up bonus for meeting minimum spend. However, it does not offer an authorized user bonus and the annual fee is not waived the first year.

The Chase Sapphire Reserve Card does have an advantage in that it offers 1.5 cents per point when redeemed through the Chase Ultimate Rewards travel portal, which means the sign-up bonus is worth $750 in travel. Like the Chase Sapphire Preferred Card, you can transfer your points to both airlines and hotels to get even more value out of the bonus.

The annual fee of the Chase Sapphire Reserve Card is a bit steep at $450 a year but the annual $300 travel credit effectively makes the annual fee $150. While $150 is much more manageable than $450, the Chase Sapphire Preferred Card offers a $0 annual fee for the first year!

Comparing the sign-up bonus of 55,000 Ultimate Rewards points earned from the Chase Sapphire Preferred Card with a waived annual fee and the 50,000 Ultimate Rewards points earned from the Chase Sapphire Reserve Card with a $450 annual fee ($150 if you play your cards right), you can see that the redemption through the Chase Ultimate Rewards portal is greater with the Chase Sapphire Preferred.

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If you are just starting your points and miles journey, the Chase Sapphire Preferred Card makes more sense than the Chase Sapphire Reserve Card for many people.

Redeem 55,000 Ultimate Rewards Points With Travel Partners

The Chase travel portal redemption for the Chase Sapphire Preferred Card is 1.25 cents per point, while the travel portal redemption for the Chase Sapphire Reserve Card is 1.5 cents per point.

However, when transferring points to travel partners, points earned through the Chase Sapphire Reserve Card are transferred at the same 1:1 ratio as points earned through the Chase Sapphire Preferred Card.

Therefore, if you are planning to transfer points to travel partners, the Chase Sapphire Preferred Card should definitely be your first choice. Ultimate Rewards points can be transferred to partners that can help you fly to Hawaii, book premium cabin seats, or stay at luxury resorts.

Personally, I have never used the Ultimate Rewards portal for a travel redemption. I have found that I have been able to get a much greater value out of my Ultimate Rewards points by utilizing transfers to travel partners.

Pro Tip: If you book economy class flights, you should always compare the travel portal rate to the number of points required to book an award flight with one of Chase’s airline partners.

For example, I am currently planning a stay at the Hyatt Regency in Amsterdam.

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Booking directly through Hyatt.com offers a standard room rate of $353.33 including taxes and fees.

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Using the Chase Ultimate Rewards portal to book the hotel would cost $329.32 + $17.65 in taxes/fee for a total of $346.97 or 27,756 Ultimate Rewards points per night.

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If you didn’t want to use points, booking through the portal might seem like a great idea, as $346.97 is less than the direct hotel booking rate of $353.33.

However, booking through the Ultimate Rewards portal codes as an Online Travel Agency (OTA) booking, and many hotels do not honor loyalty status or award loyalty points to stays booked through an OTA.

I can’t really stomach the thought of paying $350 a night for a hotel room, even if the hotel is beautiful. If I redeemed Ultimate Rewards points for the stay, I would not have to spend any cash, but 27,000 points is a lot to shell out for just one night!

Thankfully, Hyatt is a transfer partner of Chase Ultimate Rewards. The Hyatt Regency Amsterdam is a Category 4 hotel, which means standard rooms require just 15,000 points per night, and club rooms require 21,000 points per night.

By transferring my Ultimate Rewards points directly to World of Hyatt and booking an award stay directly through the hotel, I will save myself more than 8,000 Ultimate Rewards points!

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At a cash rate of $350 per night, my 15,000 Ultimate Rewards points will have a value of 2.33 cents each, which is much higher than the 1.25 cents the Chase Sapphire Preferred offers through the portal.

I also will have the added benefit of my hotel status being recognized, since the award stay is booked directly through the hotel. As a Globalist member, that will provide me Club Lounge access, earnings toward elite night credit and space-available upgrades.

If you are planning to transfer your points to travel partners, the Chase Sapphire Preferred Card offers you 55,000 points thanks to the sign-up and authorized user bonuses, which is greater than the 50,000 points offered by Chase Sapphire Reserve Card.

Since all Ultimate Rewards points transfer to travel partners at a 1:1 ratio, getting the Chase Sapphire Preferred Card is an excellent choice.

Final Thoughts

If you are just getting started with this hobby, the Chase Sapphire Preferred Card should be at the top of your list for several reasons but one stands out above the rest.

Due to the waived annual fee for the first year, you can start playing the points and miles game without having to spend any money out of pocket, while still earning valuable Chase Ultimate Rewards points.

Before you know it, you will have booked your first award flight or award stay and be well on your way to earning more points.

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