Chase Sapphire Preferred and Sapphire Preferred Ultimate Rewards Value Analysis

Today we’ll be looking at the the points system associated with Chase Sapphire and Chase Sapphire Preferred.  Here at Help Me Travel Cheap I’m in the process of comparing the travel value of different credit card rewards programs.

**Update: As of May 16th, 2011 Chase is offering a 40,000 sign up bonus for the Chase Sapphire Preferred card.  That makes this a perfect time to sign up for the Preferred card.   **

You can read my ThankYou Rewards introduction and review.

How do you earn points?

Credit Card Sign Up Bonus

When you sign up for the Chase Sapphire card (plus meet all requirements), you’ll earn 10,000 bonus points.

When you sign up for the Chase Sapphire Preferred card (plus meet all requirements like spending $3,000 in the first 3 months, no annual fee for the first year and then $95 per year), you’ll earn 40,000 points.

Credit Card Spending

You’ll earn one point per dollar you spend.  However, if you book travel through Ultimate Rewards, you’ll earn two points per dollar you spend.

Bonus Value Opportunities

Like most programs, they are defined by what type of extras they add to how you can earn points.

With the Sapphire Preferred card, you’ll get a 7% annual points dividend.

Additionally, points are worth an extra 25% when you book travel through the Ultimate Rewards booking portal.

Are Chase Sapphire and Sapphire Preferred rewards a valuable way to earn rewards for travel?

Let’s start by comparing these cards to each other.

Let’s say that John Doe spends $15,000  each year.  Only $2,000 of that is on travel.  How many points would you earn?

Action Chase Sapphire  Chase Sapphire Preferred
Signup Bonus and eligible spending completed 10,000 40,000
$13,000 in spending 13,000 13,000
$2,000 through Ultimate Rewards 4,000 4,000
Annual Points Dividend n/a 3,710
Total 27,000 60,710
Cash Value $270 $607.10
Travel Spending Value if booked through Ultimate Rewards $270 $758.88

 

If you are spending and earning money for travel, then I think you should avoid the Chase Sapphire Preferred cards.  Basically, the points are not as valuable as airline miles. Look at the following chart as an example.

Compare the Chase Sapphire Preferred to another Chase product – United credit card.

Action Chase Sapphire Preferred United Credit Card
Sign up bonus after eligible spending completed 40,000 30,000 *with authorized user
Other sign up bonus n/a 2 club passes, free baggage
$13,000 in spending 13,000 13,000
$2,000 through Ultimate Rewards or United Airlines 4,000 4,000
Annual Points Dividend 3,710 n/a
Total 60,710 47,000
Cash Value $758.88 cannot be converted to cash
Travel Spend Value (Sapphire through ultimate rewards) $869.13 40,000 points will get you a flight to Hawaii.  A random date 3 months out IAH – HNL would cost $586.82.

 

Additional Remarks:

  1. The Sapphire Preferred has a $3,000 spend requirement, but the United card awards points after your spending $1,000.
  2. Even with points, you will need to be prepared to pay taxes and fees.  In this case IAH – HNL would cost $10 in taxes and fees.
  3. Chase Sapphire Preferred Ultimate rewards can be transferred (1:1) to Hyatt, United, Southest, British Airways, Marriott and Priority Club.

Overall Rating and Final Thoughts:

Rating: 4/5

The Chase Sapphire Preferred program is recommend as a good way to earn free travel flights and hotel points for travelers.  It does have one of the best sign up bonuses.  As some point, it might make sense to take advantage of a credit card sign up bonus.

Good points:

  • Flexibility – can be used across a network of airlines and hotel chains.
  • The 25% travel booking bonus is nice.
  • 7% points dividend is a nice perk.
  • 2 points per dollar spent on travel

Action Items:

If you do wish to sign up for the Chase Sapphire Preferred ( or just the Chase Sapphire) , you can do that here.

If you wish to sign up for the United card, you can do that here.

Comments

    • Craig says

      Curt,
      There are four types of the Chase Sapphire Preferred card Visa, Visa Signature, MasterCard or World MasterCard. It is a major credit card (with either Visa or MasterCard logo) so you can get any better than that in terms of acceptance rate.

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