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One of the most common questions we see in the Award Travel 101 community is along the lines of “I'm new to the points and miles world, what credit card should I start with?” There's no doubt the myriad of loyalty programs with complex earning and redemption strategies can, and at some point will, overwhelm you. Add in dozens of card-issuing banks and their own rewards programs that each have unique nuances, and no wonder beginners can't decipher which credit card should be first in their wallet.
Today, I'll share my reasons why the Chase Sapphire Preferred® Card stands out amongst all the noise and should be considered for the first spot in your newly minted, or even experienced, loyalty portfolio. The card currently offers 60,000 bonus Ultimate Rewards after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. It has an annual fee of $95. So what exactly can you do with 60,000 Ultimate Rewards and what sets the Sapphire Preferred apart from the competition?
Transferable Versus Fixed Points
Rule number one with points and miles is understanding not all loyalty currencies have equal value. The most significant difference is what we refer to as fixed versus transferable currencies. Some points, like Capital One Venture Rewards, are going to be worth 1 cent per point for travel regardless of how you redeem.
Other currencies, like the Chase Ultimate Rewards your Sapphire Preferred card will earn, can be transferred to travel partners. Here you can redeem airline miles, and hotel points earned by transferring your Ultimate Rewards for a significantly higher value (say an incredible 13 cents per point for a first class flight to Japan) compared to a fixed-value currency. There is no such thing as having too many Chase Ultimate Rewards, making the Chase Sapphire Preferred® Card a staple in my wallet for going on five years.
Educates Without Overwhelming
If you're new to transferable points, you need an intuitive and easy to understand program that makes it enjoyable to execute transferring points to hotel and airline travel partners.
The Chase Ultimate Rewards website, in my opinion, is user-friendly and clearly displays your points earned, the points you'll earn on your next statement, travel options, and transfer partners. Fine print is minimized, and there isn't much to confuse someone new to the site.
Ultimate Rewards also makes it easy to forego transferring points to partners and book travel directly through the Chase travel portal. If you use this option, your points are worth 1.25 cents each towards the cost of a flight, hotel, rental car or bookable activity. AwardWallet contributor Jess Farley has a great breakdown of why and when this could make sense. Chase will quickly educate beginners on how to earn and use a transferable currency without overwhelming you.
Built-In Travel Protection
Credit cards offer a host of benefits when it comes to travel which you invoke by merely paying for all or a portion of your trip with the card. For each of the below-listed benefits, it is crucial you read the full CSP benefits guide (compared to the Sapphire Reserve), which thoroughly explains the definitions and coverage for each. The Sapphire Preferred includes the following travel protections if you use the card to pay for your trip:
- Trip Interruption/Cancellation — Chase will reimburse you for covered reasons that you have to cancel a trip before you leave, or if something happens during your trip and you are delayed and incur expenses like a hotel.
- Primary Rental Car Collision Damage Waiver — If you have an accident in your eligible rental car, Chase will cover the damage as well as loss of use charges and towing charges for the rental. Note: You'll want to make sure you have liability insurance as this is not included as a benefit of the credit card.
- Lost/Delayed Baggage — If you checked baggage is delayed by more than 6 hours, Chase would reimburse you $100/day for up to five days for clothing and toiletries. If the baggage is wholly lost, Chase will reimburse you up to $3,000 per person, per trip.
- Trip Delay Protection — Covers up to a maximum of $500 for each purchased ticket for reasonable expenses, on a one-time-basis, incurred if your trip is delayed by a ‘Covered Hazard' for more than 12 hours or requires an overnight stay. This includes meals, accommodations, and other personal essentials.
Earn Bonus Points
The Sapphire Preferred earns 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide. Because of the above-mentioned travel protections and earning bonus points on plane tickets, car rentals, and hotel stays, as well as no foreign transaction fees, it is routinely the card I use to pay for all travel.
Why Preferred Over Reserve?
The Sapphire Preferred has a cousin card, the Chase Sapphire Reserve®. The Sapphire Reserve entered the market in 2016 to much fanfare; Chase literally couldn't make enough physical cards. It carries a much more substantial annual fee of $450 but does come with a lot of added benefits when compared to the Sapphire Preferred.
In my opinion, for a beginner that travels only a couple times a year, the Sapphire Reserve and its annual fee do not carry enough weight to make it better for beginners. It has a slightly lower 50,000-point signup bonus and similar (in some cases better) built-in travel protections as the Sapphire Preferred.
Benefits like lounge access, travel credits, and car rental status often don't make sense for a beginner and can overwhelm someone that needs to focus on learning to maximize Ultimate Rewards. For those reasons, I recommend enjoying the Sapphire Preferred with its lower annual fee, while you learn to earn and maximize Ultimate Rewards.
Beginners to points and miles need a credit card that earns valuable transferable points, has included travel protections and makes it easy to use the points for valuable award flights and hotel nights.
The Chase Sapphire Preferred® Card efficiently accomplishes all these tasks with a great sign up bonus and low annual fee that immediately set you on the path to very valuable flight and hotel award bookings.
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