The Chase Sapphire Preferred Card is a popular travel rewards credit card that’s ideal for people who dine out and travel often. Though it does come with an annual fee of $95, Sapphire Preferred earns an unlimited 2 points per $1 spent on restaurant dining and travel purchases, and an unlimited 1 point per $1 spent on everything else. Plus, it has one of the best sign-up bonuses around: If you can afford to spend at least $4,000 within 3 months of opening your account, you’ll earn 50,000 bonus points. That’s a $625 value when redeemed for travel purchases – more than six times the annual fee.
- Sign-up Bonus. When you spend at least $4,000 within the first 3 months of opening your account, you earn 50,000 bonus points. That’s good for up to $625 on airfare and hotel stays purchased through Chase’s Ultimate Rewards portal, and $500 on all other redemptions. Additionally, you earn 5,000 points for making at least one purchase in the first 3 months and adding an authorized user to the account. That gives you a total sign-up reward of up to 55,000 points.
- Travel Rewards and Redemption. You earn an unlimited 2 points for every $1 you spend on travel purchases, including airfare and hotel stays, and restaurant purchases. You earn an unlimited 1 point for every $1 you spend on all other purchases. You can redeem points, starting at 2,000 (usually a $20 value), at Chase’s Ultimate Rewards portal. Redemption options include cash and cash equivalents (statement credits, bank account deposits, and gift cards), as well as general merchandise purchases and travel purchases. Points are usually worth $0.01 apiece, but they go 20% further when redeemed for travel purchases made directly through Ultimate Rewards. For instance, 50,000 points – normally worth $500 in cash equivalents or general merchandise – are worth $625 when redeemed for travel. As long as your account remains open, your points don’t expire. You can also transfer your points to participating frequent traveler programs offered by airlines, hotels, and alliances, at a one-to-one ratio – regardless of the monetary value of the participating programs’ points. Participating frequent traveler programs include British Airways, United Airlines, Southwest Airlines, Korean Airlines, Virgin Atlantic, Hyatt, IHG, and Marriott. This can potentially increase the value of your points even more, depending on how you use them after transfer.
- Points for Ultimate Rewards Purchases. Chase’s Ultimate Rewards portal offers opportunities to earn points faster. Various merchants represented on Ultimate Rewards offer an additional 1 to 5 points per $1 spent (and sometimes even more) on top of the Sapphire Preferred card’s baseline 1 point per $1 spent.
- Important Fees. The annual fee is $95, but it’s waived for the first year. There are no foreign transaction fees. Late payments range from $15 to $35, depending on balance size. Returned payments always cost $35, regardless of balance size. Balance transfers cost the greater of $5 or 3%, while cash advances cost the greater of $10 or 5%.
- APR. The purchase and balance transfer APR varies between 16.49% and 23.49%, depending on prevailing rates. The cash advance APR is 25.49%, also variable with prevailing rates. There is no penalty APR and no introductory APR promotion.
- Travel Benefits. Sapphire Preferred offers a bevy of travel protection services for cardholders in good standing. These include trip cancellation and interruption service, which reimburses you up to $10,000 for trips cancelled or cut short due to factors outside your control; complimentary auto rental collision damage waiver; damaged or lost luggage reimbursement up to $3,000 per passenger; travel accident (death and dismemberment) insurance worth up to $500,000; 24/7 travel emergency assistance; and trip delay reimbursement (up to $500 per ticket for trips delayed longer than 12 hours due to circumstances beyond your control).
- Exclusive Events and Experiences. Sapphire Preferred cardholders get exclusive or VIP access to a variety of exciting events, including the 2016 PGA Championship and private dining experiences with celebrity chefs. Additional fees may apply.
- Huge Sign-up Bonus. Sapphire Preferred’s sign-up bonus is among the best in the travel rewards card category: 50,000 bonus points (up to $625 value) when you spend $4,000 or more within 3 months of opening your account, plus 5,000 bonus points simply for making your first card purchase and adding an authorized user. The Capital One Venture Rewards card’s sign-up bonus is worth only $400, while Expedia+ Voyager’s bonus is worth just $200.
- 20% Off Travel Redemptions. When you redeem your accumulated points for travel purchases through Chase’s Ultimate Rewards portal, your points go 20% further – put another way, you get a 20% discount on your redemption. The Barclaycard Arrival Plus™ World Elite Mastercard® offers just a 5% redemption bonus, while U.S. Bank FlexPerks has no bonus at all.
- One-to-One Point Transfer to Other Travel Rewards Programs. Sapphire Preferred has a simple points transfer system. You’re able to transfer your Chase points to participating frequent traveler programs at a one-to-one ratio, with no fees or point losses. For instance, 10,000 Chase points become 10,000 IHG Rewards Club or Southwest Rapid Rewards points. By contrast, Citi’s travel cards (such as Prestige) have a more complicated transfer system that can result in point losses or transfers at less than one-to-one. For instance, 1,000 Citi ThankYou points equate to just 500 Virgin Atlantic Elevate points.
- Flexible Redemption Options. There are plenty of redemption options including cash and cash equivalents, such as bank account deposits and gift cards, plus a multitude of general merchandise and travel purchases. Airline-specific travel rewards cards (such as Delta SkyMiles and United MileagePlus Explorer) typically require you to redeem for airfare or other travel purchases. So does Barclaycard Arrival Plus.
- Ultimate Rewards Purchases Boost Point Accumulation. When you use your Sapphire Preferred card to make purchases in Chase’s Ultimate Rewards portal, you can dramatically accelerate your point-earning power – up to and occasionally in excess of 5 points per $1 spent over the baseline of 1 point per $1 spent. Capital One Venture Rewards doesn’t have equivalent an option with its own rewards portals.
- No Foreign Transaction Fees. Sapphire Preferred has no foreign transaction fees – a big plus for frequent overseas travelers (and people who live near the Canadian or Mexican borders). Expedia+ and Expedia+ Voyager both charge 3% foreign transaction fees.
- No Penalty APR. Sapphire Preferred has no penalty APR – good news for cardholders who miss a payment. Citi’s travel rewards cards, including Hilton HHonors and Prestige, impose 29.99% penalty APRs indefinitely.
- 2x Points Only Applies to Certain Categories. Frequent travelers and diners love Sapphire Preferred’s 2 points per $1 spent on dining and travel. But the meager 1 point per $1 spent on general purchases is frustrating for people with more varied spending requirements. A good option to accumulate more Chase Ultimate Rewards points is to sign up for the Chase Freedom Unlimited, which earns you 1.5 points on all purchases, and use it in conjunction with the Sapphire Preferred. Outside of Chase, the Barclaycard Arrival Plus earns an unlimited 2 miles per $1 spent on all purchases, regardless of category. Arrival Plus miles are worth roughly the same as Sapphire Preferred points – $0.01 apiece, except when redeemed for travel.
- Sizable Annual Fee. Though it’s waived in the first year, Sapphire Preferred’s $95 annual fee is still relatively high compared to competing cards. Capital One Venture Rewards charges just $59, while Arrival Plus charges $89. Both waive these fees in the first year.
- No Intro APR Promotion. Sapphire Preferred doesn’t have an intro APR promotion – balance transfers and purchases accrue interest at regular rates from day one. While intro APR promotions aren’t too common in the travel rewards world, some exist: Capital One VentureOne Rewards charges 0% for purchases and balance transfers for a limited time.
- No Credit Monitoring or Credit Building Features. Chase doesn’t give you the opportunity to check your FICO score, VantageScore, or other credit measures. It also doesn’t offer any credit-monitoring or -building tools. Discover it Miles and Capital One Venture Rewards both provide FICO score access and credit-building help.
By many measures, the Chase Sapphire Preferred Card is a great credit card. However, it’s definitely not for everyone. Keep in mind that the extremely attractive sign-up bonus, worth up to $625 when redeemed for travel purchases, requires you to spend at least $4,000 within 3 months of opening your account. At an annualized rate, that works out to $16,000-per-year spending rate – nearly 30% of the average U.S. annual household income, which the Bureau of Labor Statistics pegged at about $53,000 in 2014.
Needless to say, not everyone can afford to reap Chase Sapphire Preferred’s sign-up bonus. And, as this card requires excellent credit, it’s fair to bet that many Americans don’t qualify for it anyway.
If you need to improve your credit history, Chase Sapphire Preferred is probably out of your reach for the time being. However, that doesn’t mean you can’t work to earn it down the road. For now, apply for a secured credit card, or an unsecured card meant for building credit (such as a student credit card). Concentrate on spending responsibly and making timely payments. Request credit line increases as time passes. And regularly monitor your credit score to track your progress.
Who knows? If you’re diligent, Chase Sapphire Preferred’s current sign-up bonus might still be in effect when you’re ready to apply.