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|Chase Sapphire Preferred® Card
We all have different stories of how we got hooked on points and miles. It may be a bank or credit card provider offering a new card or account, filling out a form on an airplane for the offer of ‘free introductory miles', or maybe you read an article on The Huffington Post titled ‘How to Get Upgraded on Your Next Flight.'
Once you get a taste for earning and redeeming points and miles, it's hard not to dig further into the mysterious waters of rewards programs and all they have to offer.
We help hundreds of thousands of people keep track of their points and miles and one of the most common questions we're asked at AwardWallet is:
“What is the best travel rewards card to apply for if I am just starting out collecting miles and points?”
Our answer: The Chase Sapphire Preferred® Card because of its great card benefits, flexible points and fantastic airline and hotel travel partners.
There are dozens of loyalty programs offering incentives to sign up, and it can be overwhelming trying to compare the different loyalty plans, hotel chains, airlines, credit cards, and award charts to determine which programs offer you the best value and provide the best path to help you achieve your goals.
If you're new to points and miles, you'll likely start off doing one of three things.
- Sign up for a credit card with the highest number of bonus points
- Sign up for whichever rewards card your bank offers
- Sign up for the rewards card offered by your favorite airline or hotel (it's a loyalty program, right?)
Unfortunately, while each idea has its merits, you may be missing out on a lot of value. Here's why.
- The largest points bonus can be misleading as not all points and miles command the same value. A mile with Delta SkyMiles is not the equivalent of an Alaska Mileage Plan mile. Simply put, some points and miles provide significantly better value than others. Depending on the loyalty program attached to a card, 20,000 bonus points in one plan may provide similar value to an equivalent 50,000 points in another program. Think of each point as a different foreign currency, each having their exchange rate.
- Although you may have a long-standing relationship with a bank, the products that they offer may not line up best with your individual goals. Each bank has its partners, and while they certainly hope your interests align with theirs, you might be better served elsewhere.
- Yes, you may live in Atlanta, the heartland of Delta, but does that mean you will get the most value out of having a Gold Delta SkyMiles® Credit Card from American Express as your first card? Possibly not.
Particularly while you are making your first steps into the hobby of collecting points and miles, your first card needs to offer a variety of rewards and the right bonuses to make it a good daily spend card.
In reviewing why the Sapphire Preferred is the best beginners reward card, let us identify what to look for in your first premium travel rewards credit card.
What Makes A Rewards Credit Card A Good Fit For Beginners?
- A lucrative signup bonus
- An achievable minimum spend
- High-value redemptions and valuable transfer partners
- Points that are easy to earn
- A low annual fee
- Excellent benefits just for being a cardmember
Let's dive a little deeper into why the Sapphire Preferred ticks the boxes on each of these points above.
A Lucrative Welcome Bonus
The Sapphire Preferred has one of the best welcome offers of any rewards card available today: Earn 60,000 bonus points. The value of those points only goes up when leveraging partner programs such as United or Hyatt.
Adding the 4,000 points earned from your $4,000 spend (assuming you've not made any purchases that earn 2x points) to the 60,000 bonus points for meeting that spend means you'd net yourself 64,000 (4,000 + 60,000) Ultimate Rewards!
The most lucrative value from the points often comes from transferring them out into partner programs. When you do this, you transfer your Ultimate Rewards at a ratio of 1:1 to partner programs where you can receive an exponentially higher return on your points. We'll dig into that shortly.
Achievable Minimum Spend
The secret to earning rewards points and miles is not increasing how much you spend; it is changing your spending habits to get the most benefit from your current spending while trying to mitigate any extra costs and fees associated with achieving the minimum spend.
$4,000 may seem like a significant minimum spend, but there are plenty of ways to ensure you hit that number. We won't go into all the options as it would require an entire post, but we have listed a few below.
- Pay your major utility bills and all weekly expenses. Although some large utility companies are stuck in the twentieth century and prefer you to link a bank account, most will now let you pay using a credit card. Power, phone, internet, cable, insurance, auto maintenance, fuel, daycare, pet care, and groceries add up fast and will contribute a significant chunk towards your minimum spend.
- Paying your taxes. If you time your application right, paying your taxes with a new card can often achieve the entire minimum spend in one go. Use a service such as Pay1040.com, in which case, the 1.87% fee (minimum fee $2.59) would be worth it to reach the minimum spend on a massive signup bonus. According to the IRS, those fees might be tax deductible. Consult a tax professional for advice on your particular situation.
- Use Plastiq to pay bills or make payments that won't accept credit cards such as mortgage payment or tuition fees. These services are only worth using while trying to meet the minimum spend on a big signup bonus. Note These fees these services charge (upwards of 2%) make them viable for meeting a spend requirement but not the best use for your everyday spend as the value of the points earned is negated by the fees paid.
High-Value Redemptions And Valuable Points Transfers
The points you earn with the Sapphire Preferred are Ultimate Rewards which are considered one of the most valuable points currencies for many reasons.
- Each point is equal to 1 cent when redeemed through the Ultimate Rewards portal; this is the minimum value you'll receive.
- If redeemed for travel through the Ultimate Rewards portal you receive a 20% discount on each redemption increasing the value of each point to 1.25 cents.
- Points transfer at a 1:1 ratio to almost a dozen rewards partners some of which include Southwest Rapid Rewards, United MileagePlus, Virgin Atlantic Flying Club, Marriott Rewards, and World of Hyatt.
Transferring points out to hotel and airline partners is where you can obtain the most value from Ultimate Rewards points and is what makes them such a valuable base point to collect. To give you a few concrete examples of 1:1 transfers:
United MileagePlus – Transferring to United MileagePlus and booking First Class non-stop San Francisco (SFO) to Tokyo (HND) with a First Saver Award seat on December 15, 2016, will set you back 80,000 miles plus $5.60 in taxes and fees, while the same seat purchased with cash is $11,079. A value of over 13.8 cents per point!
World of Hyatt – In a recent post on the value of World of Hyatt points, we profiled the Park Hyatt Mallorca, a category 5 property that can be redeemed for 20,000 points per night. In the post, we showed that the cash price for that room for three nights (July 14 – July 17, 2016) averaged just over $811 per night — a total cost of $2,435.17. Alternatively, by transferring 60,000 Ultimate Rewards at a ratio of 1:1 to World of Hyatt for this redemption, you would receive over four (4) cents per point in value. While this was a great redemption achieving over four (4) cents per point in value, keep in mind that nightly rates at hotels fluctuate and you may receive more or less value from your points when it comes time to redeem.
These types of examples are a perfect way for you to identify the best value for your points allowing you to benchmark redemptions against the available options.
Points Must Be Easy To Earn
There are several ways of using the Sapphire Preferred card to earn points, and select shopping categories will earn you additional bonus points. You earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide
Another easy way to earn points is using Shop through Chase℠, Chase's online shopping portal. With over 240 online stores, offering up to 25x bonus points earned for every dollar spent, this is an easy way to accumulate thousands of extra points every year.
A Low Annual Fee
Chase has positioned this card on par with other top travel rewards cards. The Sapphire Preferred has an annual fee of $95.
You'll also pay no foreign transaction fees when you use your card on purchases made outside the United States; so don't worry about using your card when you travel.
Extra Perks And Benefits
The huge signup bonus and double points on dining and travel are fantastic incentives on their own but the Sapphire Preferred has a whole raft of advantages buried under the covers.
It pays to read the Sapphire Preferred Guide to Benefits as these benefits are a significant reason you want this card as a permanent feature in your wallet. The Auto Rental (CDW) and Trip Cancellation and Interruption benefits, in particular, are fantastic perks.
|Sapphire Preferred Benefits||Summary|
|Auto Rental Collision Damage Waiver||Decline the rental company's collision insurance and charge the entire rental cost to your card. Coverage is primary and provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most rental cars in the U.S. and abroad.|
|Purchase Protection||Covers your new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.|
|Extended Warranty Protection||Extends the time period of the U.S. manufacturer's warranty by an additional year, on eligible warranties of three years or less.|
|Trip Cancellation and Trip Interruption||Trip Cancellation insurance reimburses you or your Immediate Family Members for up to ten thousand ($10,000.00) dollars per person for each Covered Trip (up to $20k/trip & $40k/year) if a Covered Loss prevents you or your Immediate Family Members from traveling on or before the departure date and results in cancellation of the travel arrangements.|
|Lost Luggage||If you or your immediate family members' checked or carry-on bags are damaged or lost by the carrier, you're covered up to $3,000 per passenger.|
|Trip Delay Reimbursement||If your common carrier travel is delayed more than 12 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket.|
|Baggage Delay||Reimburses you for essential purchases like toiletries and clothing for baggage delays over 6 hours by passenger carrier up to $100 a day for 5 days.|
|Travel Accident Insurance||When you pay for your air, bus, train or cruise transportation with your card, you are eligible to receive accidental death or dismemberment coverage of up to $500,000.|
|Travel and Emergency Assistance Services||If you run into a problem away from home, call the Benefit Administrator for legal and medical referrals or other travel and emergency assistance. (You will be responsible for the cost of any goods or services obtained.)|
This Card Will Be The Best Looking Credit Card In Your Wallet
Yes, this may not be a top reason to get a credit card, but the Sapphire Preferred is one of the coolest looking credit cards on the planet.
It's made of metal rather than plastic and is slightly thicker and heavier than other cards; it also has the numbers on the back leaving the front of the card a minimalists dream of smooth real estate dedicated to your name and the Sapphire Preferred branding.
The Sapphire Preferred In Summary
If you want to make a solid first push into collecting rewards points, it's hard to go past the Chase Sapphire Preferred® Card.
It has the perfect mix of a fantastic signup bonus with an achievable minimum spend, first-class bonus points earning categories and Chase Ultimate Rewards® are some of the most valuable points to move between programs due to the 1:1 transfer rate with fantastic partners.
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