This morning on Milepoint someone posted a question prompted by my blog post yesterday on whether Aeroplan fuel surcharges reduce the value of American Express Membership Rewards points and whether that changes my overall advice on best credit card.
The question was about the Chase Sapphire Preferred card. It’s been all the rage with ‘in the know’ frequent flyers for months now, I only broke down and got the card myself over the summer, as Chase has improved the program substantially.
I’ve referenced it several times as part of larger posts, such as my advice on the best mix of rewards credit cards but I haven’t given it real standalone treatment.
As recent posts will tell you, I still love American Express Membership Rewards. I’ve even been defending Membership Rewards against naysayers who argue that this card completely outdistances the Amex program. But my case has been a limited one — I still use my Premier Rewards Gold card for triple points on airfare and double points on groceries.
Otherwise, this bad boy is pretty go-to.
Now, lots of readers already have this card, when I was in Chicago for the frequent flyer seminar last month where over 500 people were in attendance it was like a huge Sapphire throwdown. So if you’ve already got the card and know its benefits, skip this post.
And yes, if you choose to use my link to apply for the card I’ll get referral credit for it, but the advice is genuine — given my spending patterns it’s currently the card in my wallet that I’m using the most.
As I say, I use the American Express Preferred Rewards Gold card for airfare (triple Membership Rewards points) and groceries (double Membership Rewards points). I’ve actually reconsidered using the Amex card for gas, even though it offers double points, since as a travel expense it earns double with the Sapphire Preferred card as well. And I use the Starwood American Express for big general spend with merchants that take American Express.
But the value proposition in Chase Sapphire Preferred card is huge.
- 40,000 Ultimate Rewards points after $3000 in spend within 3 months.
- No fee the first year, $95 thereafter.
- No foreign currency transaction fees. I have some upcoming Conrad hotel stays and would normally have used my Hilton Surpass American Express card, it earns 9 Hilton points per dollar. And that was marginally more valuable than 1 Hyatt point if I had used my Hyatt Visa which comes with no foreign currency transaction fee. Most cards add 3% on to all spend outside the US. Chase Sapphire Preferred waives the fee, and all travel spend earns double points. So I’ll give the Conrad properties in Asia my Sapphire Preferred, save the 3% on foreign currency fees, and even earn double points. I travel internationally several times a year, savings on foreign currency fees alone way more than cover the annual fee on the card.
- Earns one point per dollar spent, but two points per dollar on all travel-related (air, hotel, car,
gas, taxi, tolls) spend and restaurant spend. - Here’s the beauty: points transfer 1:1 (and account names don’t have to match) into United/Continental, Korean, British Airways, Hyatt, Marriott, Priority Club, Amtrak. This is real flexibility. The best values are United/Continental and Hyatt. But this card is effectively the Visa version of American Express Membership Rewards. And it may be even better, since Amex has lost several partners and those that remain are less valuable than before. I still love my Membership Rewards points, but the value in these Ultimate Rewards points have been on the rise.
- When you have the card you can make purchases through the Ultimate Rewards mall. It often offers a better return for online shopping than competitor shopping portals. And as Frequent Miler often points out you don’t have to pay with your Chase Visa in order to earn points through the Mall, once you’re a member of the program. So with those merchants that allow points earning for purchase of gift cards, you buy gift cards through the Mall and then go back to the Mall to make purchases with those gift cards, effectively doubling your points. When they were offering 20 Sears points per dollar, buying gift cards first meant earning 40 points per dollar at Sears.com.
- It’s a gorgeous card. 🙂 With no embossed numbers on the front, and a heavier construction than most cards.
The program has gotten much better in recent months and I’m lovin’ it. Really matches my spend pattern (since my heaviest spend is travel and dining) and as a Visa it’s versatile, I use it at my cleaners for instance that doesn’t take American Express.
There are still other cards worth getting for signup bonuses, or for benefits (like Amex Platinum for lounge access or the Alaska Airlines Visa for their companion ticket). But for everyday use, I’m a fan.
In the trenches I’ll defend Membership Rewards against extreme claims made over at One Mile at a Time. But Ben and I still make use of the same cards..
Update: I was spacing on the gas thing, no double points on gas, that continues to go on my Amex Premier Rewards Gold card. Edited above!
What do you use for your cell phone and cable charges? I’m trying to decide if it pays to use my Hilton HHonors Amex on those charges for the 6x points. The card sits in my drawer except for Hilton stays, but I’m wondering if it pays to use it twice per month for those charges.
Gary, I’m also in the “it’s a great card” camp. But unless there has been a recent change, I don’t think you earn double miles for gas purchases. At least I don’t see that spelled out on the website. I have not done the math on my statement to see if it in fact does. You’ve done a great summary here on the card!
@Gary, Are you about 2x from the Chase Sapphire Preferred for gas? I don’t have time to do the accounting on my old statements (I don’t buy much gas) but I thought this was excluded…
@Andrew @Chris L I was spacing….. 🙂 Fixed.
Schwab is dead and gone but Capital One Venture’s 2% deserves some love for everyday spend for those not enamored of premium travel redemptions or low spenders for whom it can be several years to accumulate the points on other cards to turn into valuable rewards. Even the smartest travelers are hard-pressed to turn a mile/point from Chase or anyone into 2 cents of travel value that they would actually willingly pay out in cash without miles/points.
Your exceptional flurry of posts the past couple days have been extremely useful, my Google Reader has been buzzing with new items. All of us readers are greedy for more!
@Rapid Travel Chai Folks who won’t spend their points on premium cabin award travel should not earn miles with their credit card spend. Signup bonuses? Sure. But not for their spend. This was a point I emphasized in my talk at the Chicago Seminar recently and have made on this blog before as well. I dsagree, though, that I don’t get 2 cents a point in ‘real’ value (ie that I would pay cash for) for my miles. Maybe SOME people won’t but to me the redemptions I make are a no brainer compared to 2% cash back. Yes that means I would spend $1800 for a business class ticket to Europe that I’m redeeming 90,000 miles for, for instance.
Gary,
Do you also earn 7% points dividend on bonuses from Ultimate Rewards mall purchases?
@Gary, which card(s) would you recommend for someone with a light travel profile (couple of domestic trips + 1 intl trip a year, on average), total annual card spend ~40K, and aspiration for occasional international business class travel?
I’ve been using AMEX SPG for years and usually end up burning the points on mid-range hotels in high-cost locations, which seems like good value but is slightly lacking in excitement 🙂
I realize this is very different from your situation, but still your opinion would be highly appreciated.
Thanks for a great blog!
what card to use at the HOTELS? co-branded card or the sapphire??
“Even the smartest travelers are hard-pressed to turn a mile/point from Chase or anyone into 2 cents of travel value that they would actually willingly pay out in cash without miles/points.”
I’ll see your bet and triple it. As far as “or anyone” goes, last year, I outright bought 200,000 points from Alaska Airlines during a 30% off sale, at 2.1 cpm. After taxes and fees, my wife and I paid $4600 for CX J tickets from JFK to DPS and returning from BKK.
Was it worth $2300/ticket? Heck yeah, especially considering I never saw coach fares below $1500. $20/hr was a cheap price to pay for a flat bed instead of a cramped coach seat 🙂
Just curious as to why you don’t do the PenFed for gas? It’s 5% cash back & to join, it’s a one-time $15 donation to some military family association – after that, family members can join for free. 5% cash back on gas is usally worth more than a point (especially when you’ve got hundreds of thousands of miles and points like many of us do)
I also would like to see some further discussion and analysis as to why everyone seems to prefer this card over the Capital One Venture Thanks
@Stevelb because Capital One points are not at all helpful towards international premium class redemptions, since you’ll never get more than 1 cent a point in value from Capital One.
@dan with Starwood, Marriott, Hilton, Hyatt I would use the chain’s co-branded card if I had it, at other chains I would use Sapphire even over the hotel’s own co-branded card.
@Alex I think SPG Amex is a perfectly reasonable option — question is what your $40k is spent on though, as that may tip the scales towards Sapphire.
@Stevelb, I like the Capital One Venture because it is an easy way to earn 2% back and nearly immediately covert it into cash value even at small spend amounts. Spend $200 and at least you can get a $2 subway ticket reimbursed rather than wait spend thousands and get a ticket or upgrade. Glamorous? No. Arbitrage opportunities? No. Easy? Yes. Ease and small spend are major considerations to people not addicted to miles and points.
Key considerations are travel priorities (economy versus first/business, earn elite status or not), spend pattern, and willingness to invest time. @Dan has a great success story above and I admire and study people like him and Gary that pull off these kind of coups.
For me, I study these methods for premium travel for my wife who wants high-end travel, but for myself I want more trips, not more comfortable trips, and to keep top-tier elite status, so I focus on economy revenue tickets and cash in the bank.
I’m with @Rapid Travel Chai….love and use the Venture card as my primary. Use my hotel branded cards for stays. The immediacy of the return is a draw.
Hi Lucky, I have a Sapphire card and was about to transfer points over to UA when I noticed that their is also an option to use Korean Air. My question related primarily to this airline’s program. How accessible are is reward travel through Korean Air, either flying with them or accessing Skyteam partners through their program? Many thanks.
@Levi Flight, if you want an answer from Lucky you need to read his blog. But an answer from ME…. Korean availability is pretty good, watch out for their blackout dates, and check their award chart to be sure you’re comfortable with the mileage cost and also check out their fees..
#1stworldproblems
Just got this card, only to discover an unexpected downside: Sapphire Preferred in all its shiny metal glory does NOT play well with my DC Metro SmarTrip card! I keep my smartrip in my wallet and just pass the whole wallet over the turnstile. To my surprise, the card won’t scan when the Chase card is in the wallet, too. I’ve only tested it at two stations, but the effect was pretty clear.
Now not sure what I’ll do. I need the Chase card in my wallet if I’m going to use it as a primary card, but pulling the Metro card out each time is a pain (and wears out the smartrip).
Hi Gary,
Just got the CSP offer in the mail with a 50k bonus on first purchase. No $3k spend requirement. Points post in 6-8 weeks. Redemption for travel via the “mall” are discounted by 20% so a 100k reward can be had for 80k. Is this a new offer? Is there a downside here? Sounds real good to me.
I may close my AMEX Premier Rewards which I picked up on a 50k bonus. I have SPG which I like a lot. My question is this: If I cancel AMEX, where should I put 200k MR points? I assume the points go when the card goes. I would love some ideas for 2 business class tickets that fit the bill. Can add SPG pts to the mix. Is Christmas week out of the question for travel? Thanks for any advice.
@Kim yes 50k bonus on first purchase rather than 3k spend is new, good, and not otherwise-available that i’m aware of. Don’t redeem for travel via the mall, use the points for United miles or Hyatt points, much more valuable. Don’t close the Amex card at least until the annual fee is about to hit, so you retain the flexibility of the points and can hang back and wait for transfer bonuses.
I’m with @Rapid Travel Chai. I guess YMMV, but I still think my Capital One Venture with 2 points per dollar is best – for my situation. I can redeem for any travel related purchases (hotel, air, ground transportation) at 100 points per $1. So, I primarily use it as a sort of kickback generator. I can spend $200 at a hotel on a business trip, expense it, and then eventually claim the reward for it – a cash generator for me. I have used it to buy domestic airfare and then use my 500 mile upgrades (not guaranteed of course) to get first class. I get the ticket for free, earn more miles (for the big trip someday), and sit up front. Like @Stevelb, I would like to see further analysis including this card. Small short term redemptions may not seem like much to some, but for me, it’s a big advantage.
Gary, love your stuff. I’m interested in card “horse-trading” I’d like to get the Sapphire Preferred but have opened 3 Chase accounts in the past year (UA select, CO MasterCard and CO Pres Plus). I’d like to “swap” the CO MC for the Sapphire but the branch told me this was not possible. Reccomendations?
question about the transfer of miles to UAL/Continental. what does this actually mean? can the miles just be used on continental/ual, or can they be used on any airline in the star alliance once you convert the points to ual/continental miles?
@jumberto the miles can of course be used to redeem for travel on star alliance partners
thanks, gary.