CHASE SAPPHIRE WANTS YOUR BUSINESS
Chase Sapphire vs. Chase Sapphire Preferred. Which is best for you?
There are two weeks left in 2011. Businesses are trying hard to finish strong into the year end. Credit card companies are no exception--you may have noticed that credit card advertisements are everywhere right now. Celebrities like Jimmy Fallon and Alex Baldwin are selling credit cards on TV and the internet. People are using credit cards more than ever and banks are competing hard for the business. The Chase Sapphire Preferred card is one of the toughest competitors in this market and has a couple of great offers right now.
Last week we compiled our list of The Best Credit Card Offers of 2011. The Chase Sapphire Preferred Card made our list as the honorable mention in the category of Best Travel Rewards Cards. It only lost to the Southwest Rapid Rewards Card offer that was a very limited time offer and was one the best offers ever.
The Chase Sapphire and Chase Sapphire Preferred have some of the best sign up bonuses out there right now.
FIRST, THE BASICS
There are two versions of the Chase Sapphire: Chase Sapphire and Chase Sapphire Preferred. The Chase Sapphire Preferred comes with a few added benefits, but requires a $95 annual fee (which can be waived for the first year when you click here).
Below is a quick comparison chart of the two cards and their benefits:
|
New card member bonus points |
Earn 25,000 bonus points |
Earn 50,000 bonus points |
|
Annual Fee |
No annual fee † |
$95 annual fee, waived |
|
Earn 2 points per dollar spent on dining—from fast food to fine dining |
X |
X |
|
Earn 2 points per dollar on travel—includes flights, hotel accommodations, car rentals, timeshares and more |
X |
|
|
Earn 1 point per dollar spent on all other purchases |
X |
X |
|
Access to Ultimate Rewards SM, where you can redeem points for travel, merchandise, gift cards or cash |
X |
X |
|
Points never expire |
X |
X |
|
No limits on how many points you can earn |
X |
X |
|
Earn 1 additional point per dollar spent on airfare booked online through our Ultimate Rewards booking tool* |
X |
X |
|
Earn up to 10 bonus points per dollar when you shop online at the Ultimate Rewards Mall |
X |
X |
|
Access to Blueprint SM, a unique set of free features that lets you design a plan to help you manage your finances and see progress on every statement |
X |
X |
|
Complimentary cards for authorized users |
X |
X |
|
Use 20% fewer points when you redeem travel through Ultimate Rewards |
X |
|
|
Collect a 7% Annual Points Dividend, even on points already redeemed* |
X |
|
|
Transfer points at 1:1 value to participating frequent traveler programs* |
X |
|
|
Pay no foreign transaction fees when you use your card on purchases made outside the United States.†† |
X |
The key differences are pretty obvious, but an analysis of which card is better for you requires a little explaining.
CHASE SAPPHIRE CARD
As mentioned above, the key difference between the cards is the $95 annual fee. So any analysis of the cards basically comes down to asking yourself if the added benefits of the Chase Sapphire Preferred Card are worth $95 per year to you?
I believe this can come down to one question. Are you a frequent traveler? I ask this because the core benefits of the two cards are essentially the same. There are several benefits offered in the market right now, but these two cards check just about every box we know of, with two key additions.
1. The Chase Ultimate Rewards Points can be exchanged to several other loyalty programs at a 1 to 1 ratio. This includes all major hotel programs and airline loyalty programs.
2. The Sapphire Card has no annual fee and the Sapphire Preferred Card allows you to waive the annual fee for the first year.
This being said about both cards, if you are considering keeping either one of these cards for more than a year, which we at Creditsense.com recommend for credit score purposes, you have to consider the longer term cost of paying $95 per year for the Preferred Card. Once again, this comes down to how much you travel. The normal Sapphire Card is target to the person with decent to excellent credit who is not a very frequent flyer and for who the added $95 per year is not worth the extra benefits. Now consider those added benefits.
CHASE SAPPHIRE PREFERRED CARD
The biggest benefit to the Sapphire Preferred Card is that you receive 50,000 Ultimate Rewards Points for signing up for the Preferred Card versus 25,000 Rewards Points for the normal Sapphire Card. Both sign up bonuses require that you spend $3,000 in the first 3 months after you open the account.
This begs the question Can I sign up for the Chase Sapphire Preferred Card and then change to the normal Sapphire card at the end of the year? Yes you can. But, you should transfer the points from the Ultimate Rewards website to another loyalty account first. Technically this should be acceptable to Chase because the terms offer only mention spending $3,000 on the card in the first 3 months. I would still transfer the points anyway. Better yet, use them.
Based solely on the sign up bonus, there is a lot of value in signing up for the Sapphire Preferred. The Ultimate Rewards Points are worth 1.25 cents each so 50,000 points are worth $625 in airline credit. The normal Sapphire is only worth $250 in airline credit. The $375 difference alone pays for the card for 4 years.
Additionally, there are a few other benefits that warrant the $95 annual fee.
1. Earn 2 points per dollar travel, including flights, hotel car rentals, timeshares, etc. If you are a traveler this alone could save you more than $95 per year. If you are earning double points on travel, then effectively each dollar you spend is worth 2.5 cents (2x the normal value of 1.25 cents). Therefore, in order to pay for the card, you need to spend $3,800 per year on travel ($95/.025).
2. Use 20% fewer points booking travel through Ultimate Rewards. This means that if you book a trip that would cost 50,000 Ultimate rewards points it will only cost you 40,000 points when booked through Ultimate Rewards. This will save you about $12.50 per trip assuming an average trip cost of 50,000 points.
3. Collect 7% annual points dividend. This means that Chase Ultimate Rewards will total up all of your points earned n a calendar year and grant a 7% bonus amount on top of that, including points that have already been redeemed. If you have earned 60,000 points throughout the year (including the 50,000 sign up bonus), Chase will give you an additional 3,500 points even if you have spent 50,000 points on a trip. This is a $43.75 bonus.
4. Transfer Rewards points to participating frequent flyer programs at a 1 to 1 value. This is a big one. The Ultimate Rewards Points from the Chase Sapphire Preferred can be transferred instantly to the partners listed below. Here are some of the things you can do with your points.
Korean Air (Skyteam)
We will have to do some research on Korean Air. If you are really interested send us a note.
British Airways (Oneworld)
Using excellent sign up bonus you can fly from the continental US to Asia for 50,000 points. You can also redeem 25,000 points for a domestic flight on partner airline American Airlines.
United (Star Alliance)
The Star Alliance has 27 partners, and these bonus points can be used on any of them. Partners include Us Airways, Singapore Air, United Airlines, South African, Lufthansa, ANA, TAM, and Continental.
Continental (Star Alliance)
Like British Airways, Continental is a Star Alliance member. Also, Continental is partnering with Virgin Atlantic. Round trip business class across the Atlantic will cost 100,000 points.
Hyatt
Hyatt has 6 categories of hotels. Each level of hotel requires a different number of points per night. Cost per night at Hyatt can range from 5,000 to 22,000 points per night. Category 1 hotels, costing 5,000 points per night, are generally hotels under the Hyatt Place brand. On the other end of the scale 22,000 points will get you one night at the Grand Hyatt Kauai Resort and Spa or the Grand Hyatt Wall New York. These high end locations can sometimes cost more than $1,000 per night.
Marriott
Marriott has 8 categories of hotels. Level 1 will cost you as little as 6,000 points if you are a member of their Points Savers Awards. This program enables you to buy nights with 33% less rewards points. Otherwise it will cost 7,000 points a night. Marriott’s level 8 locations will cost 40,000 points a night (35,000 for Point Savers).
Priority Club (Holliday Inn, Crowne Plazza, intercontinental)
Priority Club represents several hotel chains. These hotels range from Holliday Inn Express on the low end (10,000 points per night) to Intercontinental on the high end (40,000 points per night). Priority Club also runs specials for members of their Priority Club called Point Breaks. These allow members to stay at selected hotels for 5,000 points per night.
Amtrak
Amtrak has 4 different levels of travel. These will cost from 1,000 to 8,000 rewards points per ticket. This price will also vary depending on length of trip. If you travel by train often you may consider an Amtrak Guest Rewards Card, which will allow holders to transfer Amtrak Points to some hotels at 3 to 1 ratio and to Hilton at a 2 to 1 ratio.
Conclusion
The Chase Sapphire Preferred Card will pay for itself in the first year simply because the fee is waived. The extra bonus points will give the holder an additional 4 years to recoup the annual fee. Therefore, the frequent traveler or high spender should definitely get the Chase Sapphire Preferred Card over the standard Chase Sapphire Card.
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|
Earn 50,000 bonus points after you spend $3,000 in the first 3 months- that's worth $625 towards travel! 2 points per dollar spent on travel and dining & 1 point per dollar spent on all other purchases. Use 20% fewer points when you redeem for travel. Just book your flight, cruise, or other travel through Ultimate Rewards(SM) No foreign transaction fees Earn a 7% annual points dividend - even on points already redeemed Transfer points you've earned to participating frequent traveler programs at a 1:1 value 24/7 direct access to expert service advisers (No voice recording) No Annual Fee for your first year - A $95 value |
