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If you are one of the fortunate to have recently been approved for the Chase Sapphire Reserve®, there is a good chance you might already have the Chase Sapphire Preferred® Card. In many ways, holding the Sapphire Reserve diminishes the value of the Sapphire Preferred, given that the Sapphire Reserve has similar or better benefits to the Sapphire Preferred in all cases. As such, if you now have the Sapphire Reserve you may be considering a cancellation of the Sapphire Preferred; if you are, don't!
Don't Close, Convert!
One thing that Chase is fantastic about is converting card products. As long as there are alternative card products within the same family, you may have the ability to convert a card with a fee to one with no-fee. While there are restrictions on when you can convert a card product, a customer service rep can explain your options if you have questions about your particular scenario.
Within the same family as the Sapphire Preferred are two excellent products with no annual fees: the Chase Freedom® and the Chase Freedom Unlimited®. Combining either one of these two products with the Sapphire Reserve provides an excellent opportunity to maximize your Chase Ultimate Rewards earning.
Additionally, when you convert a Sapphire Preferred to either of these two products, you maintain the account history on your credit report. Chase updates their records internally, and your credit report does not show a closed account and a newly opened account — this allows you to maintain the credit history built on your Sapphire Preferred card, keeping its growing account age.
Which one of these two products should you consider for conversion? A case for each:
The Freedom Card is the card on which you can possibly earn the most points annually from day-to-day spending. The reason for this is that the Freedom Card has bonus categories that rotate quarterly where you can earn 5X points per dollar spent on the first $1,500 spent on these categories each quarter. You can earn up to 30,000 Chase Ultimate Rewards a year if you maximize spending on the Freedom Card‘s bonus categories each quarter.
The Freedom Card‘s bonus categories for the third quarter of 2016 are restaurants and wholesale clubs, including Costco and Sam's Club. Previous bonus categories for this year have included gas stations, supermarkets, and local commuter transportation. Chase has yet to announce what the main bonus category or merchant will be for this year's fourth quarter, but we do know that wholesale clubs will continue to be a bonus category for the Freedom Card throughout at least the rest of the year.
If rotating 5x categories aren't your thing, or if you spend significant amounts on categories that are not considered a bonus category for any card, then the Freedom Unlimited is the product you should consider for conversion. The Freedom Unlimited earns 1.5x Ultimate Rewards on all purchases; in fact, it is the only personal Ultimate Rewards earning card offered by Chase that earns more than 1X point on all purchases.
With the Freedom Unlimited, there is no limit to the number of bonus points you can earn. If you spend $1,000,000 on it, in a year you will earn 1,500,000 Ultimate Rewards from those purchases.
Points Earned from Freedom Card and Freedom Unlimited
One critical factor to keep in mind about rewards earned from the Freedom Card and Freedom Unlimited is that in and of themselves, these points are treated as cash back. However, if you have a Sapphire Preferred, Sapphire Reserve or Ink Business Preferred℠ Credit Card, then you can transfer your points to one of those accounts which, in turn, allows you to transfer them to the numerous Ultimate Rewards transfer partners. Having one of those three cards combined with the Freedom Card or Chase Freedom Unlimited® is what makes points earned from these two additionally valuable.
What If You Already Have the Freedom Card and Freedom Unlimited?
If you already have both the Freedom Card and Chase Freedom Unlimited® it could make sense to convert your Sapphire Preferred to the Freedom Card. By doing so, you'd be able to double the limits on which you can earn 5X points on the Freedom Card and increase the maximum amount of points you can earn on bonus categories from 30,000 points to 60,000 points. Chase allows you to have multiple Freedom cards, however, if you're not interested in this, you should consider transferring your existing line of credit to another card before closing out your account.
After Conversion, Am I Still Eligible to Earn a Signup Bonus on a Freedom Card or Freedom Unlimited?
Unfortunately, if you convert your Sapphire Preferred to a Freedom Card or Chase Freedom Unlimited®, you will not be able to earn a signup bonus for either card as long as you have the cards. That said, the signup bonus for these cards are relatively small (15,000 Ultimate Rewards or $150 cash back), they're great for every day earning and would be worth foregoing a signup bonus and additional hard inquiry on your credit report.
Don't close your Sapphire Preferred account; convert it! If you already have one of these products, consider converting it to the other. If you do not have either product, determine between the two which you'd use to maximize your earnings and convert to that card.
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