|CSP vs CSR|
|Earning Ultimate Rewards|
|Redeeming Ultimate Rewards|
Whether you’re a points enthusiast or just starting to learn about credit cards and rewards, the Chase Sapphire Preferred is one of the best low annual fee credit cards for newcomers and hobbyists alike. It comes with a big welcome offer, good returns on bonus spend categories, and strong purchase and travel protections — making it one of the most popular and rewarding credit cards available today.
The CSP vs CSR debate
The Chase Sapphire Preferred is often compared to its big brother, the Chase Sapphire Reserve. Unfortunately, you cannot have more than one Sapphire card, so you’ll have to choose one or the other. Both Sapphire cards participate in the Ultimate Rewards program, which means you can transfer points to Chase transfer partners or redeem them for travel through the Chase Ultimate Rewards portal.
Put simply, the CSP is a better travel card for casual use and for beginners who are interested in a low cost credit card that earns Ultimate Rewards. The CSP carries a low $95 annual fee, offers a larger welcome bonus, and has modest earnings and protections.
On the other hand, the CSR is a premium travel card. It commands a larger $550 annual fee and caters to frequent travelers, offering annual statement credits, additional travel benefits, and enhanced travel protections. New enhancements at the beginning of 2020 actually made both cards even better — but while the CSR annual fee increased, the CSP’s did not.
There are two major rules that exist for Chase cards and will impact your eligibility for the CSP:
- You must have fewer than 5 new credit approvals within the last 24 months in order to get approved for a Chase card. This is known as the unwritten “5/24” rule.
- You cannot receive a new cardmember bonus for a Sapphire card more than once in a 48-month period
Fortunately, the 5/24 rule does not apply to “product changes” (changing cards within the same family of products) — so a common strategy if you’re just starting out is to apply for the CSP (and get a larger welcome bonus) and then product change over to the CSR in year 2. This allows you to build up your bank of Chase points quicker by taking advantage of the CSP’s higher welcome offer, and then if you feel comfortable upgrading to the CSR, you can product change upon card renewal.
A big welcome bonus
Arguably the biggest reason you’d apply for the Chase Sapphire Preferred is because of the welcome bonus. The current offer for the Chase Sapphire Preferred is 60,000 bonus points after spending $4,000 in the first three months of card membership. This is a substantial number of Ultimate Rewards points, and tops the list as the most compelling reason to consider the CSP right now.
How much is 60,000 Ultimate Rewards points worth? Many bloggers assign subjective values ranging from 1.5 to 2 cents per point, though the truth is “it depends”. At minimum, you can redeem 60,000 Ultimate Rewards for $600 in cash. Chase advertises 60,000 Ultimate Rewards points as being worth $750 toward travel when redeemed through the Chase Ultimate Rewards portal. We’ll discuss our recommendations to maximize the value of your Chase points when we review Ultimate Rewards redemption strategies.
Earning with the Chase Sapphire Preferred
Bonus spend categories
Earning points with the Chase Sapphire Preferred is extremely straightforward. There are three bonus spend categories for Lyft, travel, and dining:
- 5x Ultimate Rewards points on Lyft rides
- 2x Ultimate Rewards points on travel
- 2x Ultimate Rewards points on dining
- 1x Ultimate Rewards point on everything else
Obviously the 5x points on Lyft rides is a huge benefit on its own. Chase also has a very generous definition of “travel” — it includes everything from parking fees and tolls to public transportation, including transportation on common carriers like planes, trains, and cruise ships.
Overall, these are strong returns for an low annual fee card with great rewards flexibility. Very few <$100 annual fee cards offer a 5x points category, much less in tandem with multiple bonus categories.
In addition to bonus spend categories, you can also earn cash back with your Chase Sapphire Preferred, via a program called Chase Offers. Chase Offers are targeted spend incentives that offer cash back or statement credits for purchases with select merchants. Offers can be viewed in your online account or in the Chase mobile app.
Cardmember benefits & protections
Another major reason to get the Chase Sapphire Preferred is for its industry-leading travel and purchase benefits/protections. The Chase Sapphire Preferred offers very comprehensive travel benefits (especially for a low annual fee card) when part or all of a covered trip has been purchased with your Chase Sapphire Preferred or booked with Ultimate Rewards.
- No foreign transaction fees
- Trip Delay Insurance: For travel delays that are over 12 hours or require an overnight stay, you and your family are covered for up to $500 per ticket. This also covers award travel when the taxes and fees are charged to your card.
- Travel Accident Insurance: Covers death and dismemberment up to $500,000 when entering, exiting or riding as a passenger on a common carrier, such as an airline, bus, train or cruise ship. Coverage is up to $100,000 for covered losses during travel while not aboard a common carrier.
- Trip Cancellation/Interruption Insurance: If travel plans change due to sickness, severe weather, and other covered situations, you can be reimbursed up to $10,000 per person and $20,000 per trip for pre-paid, nonrefundable expenses.
- Car Rental Collision Damage Waiver: Get primary rental car coverage for most car rentals in the U.S. and abroad. This covers you against vehicle theft and collision damage and reimburses up to the actual cash value of the vehicle.
- Baggage Delay Insurance: Reimburses essential purchases like toiletries, clothing and other necessities for baggage delays over 6 hours, up to $100 per day for 5 days.
The Chase Sapphire Preferred also offers two emergency services when you’re in a pinch:
- Roadside Assistance: Call 1-800-847-2869 for 24-hour roadside dispatch. They can help with anything from a tow or jumpstart to a tire change, lockout service, winching or gas delivery. Roadside service fees will be provided upfront and will be billed to your card.
- Travel and Emergency Assistance Services: If you encounter issues while away from home, you can dial 1-888-320-9956 to speak to a Benefits Administrator who can provide legal and medical referrals in addition to other travel and emergency assistance.
*Note that Chase is not responsible for the cost of any goods or services obtained.
Lastly, you get some added peace of mind for purchases, with purchase protection and extended warranty benefits:
- Purchase Protection: New purchases are covered for up to 120 days against damage or theft, up to $500 per claim, and $50,000 per account.
- Extended Warranty: Purchased products that have U.S. manufacturer’s warranties of three years or less will receive an extra year of warranty coverage.
Additionally, Chase Sapphire Preferred members also receive unique travel and dining benefits, courtesy of new 2020 partnerships with DoorDash and Lyft:
- One year of complimentary DoorDash DashPass membership, valued at $120
- Membership includes reduced service fees (5% instead of 11%) and free delivery for eligible orders over $12 before taxes and fees
- Bonus Ultimate Rewards points when riding with Lyft
- Earn 5x points on Lyft rides through March 2022
For those who often order food delivery, the complimentary DashPass membership is an excellent value, especially in light of the recent COVID-19 pandemic. According to DoorDash, DashPass members, on average, save between $4-5 per order. I was skeptical at first but have personally seen a significant enough savings that I’ve switched from Uber Eats to DoorDash (when I’m not using my American Express Platinum Uber credits).
Similarly, earning 5x points on Lyft is a fantastic benefit and is still fairly new to Chase cards. Both the DoorDash and Lyft benefits were introduced to several Chase cards (including Business cards like the Chase Ink Business Preferred) in January 2020.
Best uses for Ultimate Rewards
Earlier, we mentioned the excellent value of Ultimate Rewards points when redeemed for travel. But to be clear, Ultimate Rewards don’t have to be redeemed for travel if you’re comfortable cashing out at a lower valuation.
At minimum, points can be redeemed like ordinary cash back at a flat rate of $0.01 per point in the form of statement credits, gift cards, or as credits while shopping online at retailers like Amazon. However, we’ll explain why the best way to maximize the value of your Ultimate Rewards points is by either booking travel or transferring points to travel partners.
With the Chase Sapphire Preferred, Ultimate Rewards points are worth 25% more value when booking travel through the Ultimate Rewards portal. “25% more value” effectively means you get a 20% discount when using points to pay for travel.
Here’s a quick real-life application:
Let’s say you are looking for a flight from LAX to JFK in a few weekends. Currently, the cheapest direct flight is $98.30.
Because statement credits can be redeemed at a flat rate of $0.01 per point (in other words, $1 = 100 points), you could redeem 9,830 Chase points to purchase this $98.30 flight.
But just because you could doesn’t mean you should. With the Chase Sapphire Preferred’s 25% added value kicker, you could redeem this same flight for only 7,864 Ultimate Rewards points through the Ultimate Rewards portal.
As a side note, the Chase Sapphire Reserve offers 50% more value, so you could book this same flight for 6,563 Ultimate Rewards points if you had the CSR versus 7,864 points with the CSP.
In our opinion, the best way to maximize the value of your rewards is by transferring to Chase travel partners. Both Chase Sapphire cards allow you to transfer Ultimate Rewards points to Chase’s network of 13 hotel and airline transfer partners:
|Aer Lingus||Air France-KLM||British Airways|
|Singapore Airlines||Southwest Airlines||United Airlines|
Most partners transfer immediately and at a 1:1 ratio, which means you can redeem timely, high-value award bookings with airlines and hotels around the world. Our favorite transfer partner is Hyatt, although Singapore, United, Air France/KLM and Virgin Atlantic can also be useful. Transferring Ultimate Rewards to these programs means you could potentially receive greater value than the $0.01 to $0.0125 per point that you would get with the previous redemption methods discussed above.
For example, we recently redeemed 5,000 points per night at the Hyatt Regency Bali, which normally costs $150 per night — a return of roughly $0.03 per point.
The Chase Sapphire Preferred is an excellent credit card for frequent diners and travelers who are looking to get more value from their rewards. 5x points on Lyft and 2x points on dining and travel are solid earning rates for a card with a $95 annual fee. Plus, getting 25% more value through the Ultimate Rewards portal and having access to Chase transfer partners makes these points even more rewarding.
The closest competitors to the Chase Sapphire Preferred are the Amex Gold and Citi Premier. The Amex Gold has a larger $250 annual fee (most of which can be offset with annual statement credits), but also offers greater returns for spending with 3x and 4x points bonus categories.
The Citi Premier offers 3x points on travel and 2x on restaurants and entertainment, however Citi has stripped down its travel benefits and protections very substantially in recent years. Citi has also announced some bonus category changes that will go into effect in August of 2020.
If you’re looking for a low maintenance card that earns Ultimate Rewards, the Chase Sapphire Preferred is the best card in the starter pack. Its low annual fee makes it easy to justify given the huge welcome offer, strong earning rates on bonus categories, great travel benefits, and excellent redemption opportunities.
If you’re itching to accelerate your bonus category earnings even more and are comfortable managing more advanced card benefits, you may want to consider the Chase Sapphire Reserve. Keep in mind that you’d be forfeiting 10,000 points since the CSR welcome offer is only 50,000 bonus points.
Most importantly, just make sure you’re under 5/24 before you apply.
What do you think about the Chase Sapphire Preferred? Let us know if you have questions before you apply!