While attending law school I only ever had one credit card, a Wells Fargo cash back card that had 1 percent cash back and not much else. I’d always heard that opening a lot of credit cards hurts your credit, so I was afraid to open other cards. I think this is a common misconception that many people have, and one that I shared for years. Of course, for anyone who runs up their credit cards and spends more than they should just because they are using plastic, credit cards will destroy your credit. If that’s you, stop reading here and go listen to Dave Ramsey.
For those who use them wisely, credit cards have can have very lucrative rewards. Enter the Chase Sapphire Preferred.
The Chase Sapphire Preferred is one of the best travel cards on the market. Yes, there are competitive card offerings from other issuers, but this travel card has some perks that I really wanted which is why I chose this card over the American Express Gold Card and other similar cards from other issuers.
Perks and Points Earning
First of all, the card came with a sign up bonus of 50,000 Chase Ultimate Rewards Points. Not all points are created equal, but I find these points to be worth around 1.25 cents each when redeemed through the Chase portal, meaning that I was able to get $625 worth of value from the signup bonus alone. Of course, you only get the sign up bonus in year one, and to get the sign up bonus you have to spend $4,000 within 3 months of account opening approval. I made sure to sign up for it when I had some big expenses on the horizon. Some online publications, like The Points Guy, claim that Chase points are worth closer to 2 cents per point. This might be true for very high end point redemptions using transfer partners, but I think a more fair evaluation is 1.25 center per point based on how I like to use points.
Signup bonus aside, this card admittedly does not have the best point earning considering it’s $95 annual fee, although it’s annual fee was waived in the first year. You earn 2 Ultimate Rewards Points per dollar on travel and dining and you earn 1 Ultimate Rewards Point per dollar on everything else. Because I spend quite a bit on dining and travel, this means that I am getting about 2.5% back on a lot of my spending. You also have no foreign transaction fees when using the card abroad. Because it is a Visa, it is one of the better cards for worldwide acceptance.
One very important perk of this card is that it also comes with primary rental car insurance coverage. Primary rental coverage means that you do not even have to tell your main car insurer that you were in rental car accident unless you need the benefit of liability insurance. In other words, primary rental car insurance means that a small accident in a rental car should not increase your everyday insurance premiums.
Because I rent a car at least several days every year, the primary rental car insurance covers a large portion of the $95 annual fee on its own. Pretty much the only other credit card which comes with primary rental car coverage is the Chase Sapphire Reserve, the $450 annual fee Sapphire card that comes with several higher end perks and higher point earning. Most other cards that have rental coverage (including American Express) only have secondary coverage, which in my mind is hardly coverage at all.
At this point, you may be thinking that the 1-2 points per dollar on the Chase Sapphire Preferred does not sound all that incredible, and you would be right. However, there is one special power that this card has if you also have another card from Chase that earns Ultimate Reward Points, such as the Chase Freedom, which earns 5 points per dollar back on rotating categories, or the Chase Freedom Unlimited, which earns a flat 1.5 points per dollar back on all purchases. Because points redeemed through the Sapphire Preferred portal are worth 1.25 cents per point while points redeemed on the Freedom or Freedom unlimited are only worth 1 cent per point, you can transfer all of your Ultimate Rewards Points to the Sapphire Preferred card before using your points. Effectively, this makes the Freedom Unlimited a 1.875% back card and the Freedom a 6.25% back card. This year alone, I have spent about $3,000 on my Freedom card which means that I earned an extra $45 from the 1.25x multiplier, thus helping to cover the $95 annual fee of the preferred card.
Who Should Get The Chase Sapphire Preferred?
If you like to travel at least once or twice per year, this would be an excellent card for you. If you want lounge access, if you spend more than the average person on dining, or if you travel often, you would probably be better served by the Chase Sapphire Reserve, the $450 annual fee card that comes with better multipliers, higher point earning, and Priority Pass airport lounge access. If you do not travel, you may wish to consider one of the 2% back credit cards such as the Citi Double Cash card, the PayPal Mastercard, or the Fidelity Rewards Visa Signature card.
Author: Kelton Johnson