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Who Benefits the Most (and the Least) From the Chase Sapphire Preferred Card?

Sept. 7, 2018
Reward Optimization, Travel, Travel Credit Cards
Who benefits most from the Chase Sapphire Preferred?
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Among all the rewards credit cards targeted toward regular travelers, the Chase Sapphire Preferred® Card may be the most famous. The card is a favorite for those who want to use their rewards primarily for travel. The Chase Ultimate Rewards® points earned from everyday spending can be used for nearly any airline ticket through the rewards travel portal or be transferred to over a dozen domestic and international travel partners.

Although the benefits may sound great, the Chase Sapphire Preferred® Card card isn’t the right choice for everyone. Those who aren’t planning regular trips or who plan to carry balances on their card could find their rewards devalue quickly.

Is the Chase Sapphire Preferred® Card the right card for you? Read on to find out which type of people benefit the most (and least) from this sought-after card.

Chase Sapphire Preferred: An overview

With an annual fee of $0 for the first year, then $95, the Chase Sapphire Preferred® Card is the star of the bank’s credit card lineup. Cardholders earn 2 points per $1 spent on travel when they use their card to pay for airfare, hotels, rental cars and more. Plus, they earn 2 points per $1 spent at restaurants, from fast food to fine dining.

In addition to earning double rewards points for travel and dining transactions, frequent travelers also get access to a number of travel insurance benefits when they pay for their trip using the card or Ultimate Rewards® points. These benefits include:

  • Trip cancellation/trip interruption insurance: Up to $10,000 in reimbursement of prepaid, nonrefundable travel expenses for covered situations. Reasons include sickness and severe weather.
  • Auto rental collision damage waiver: Primary insurance coverage, which 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.
  • Baggage delay insurance: Reimburses you for essential purchases in case of baggage delays of over six hours by an airline, up to $100 a day for five days.
  • Trip delay reimbursement: If your common carrier (plane, train, bus, etc.) is delayed by 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.

» Learn more: Go in depth with our full review of the Chase Sapphire Preferred® Card.

Frequent travelers get the most benefit

With so many travel-oriented benefits, frequent travelers (or those who want to travel more) gain the most from the Chase Sapphire Preferred® Card. The rewards of 2 points per $1 spent in two common categories—travel-related expenses and dining—makes earning points very easy. In addition, the Shop Through Chase portal allows cardholders to earn even more Ultimate Rewards® points when using their qualifying credit card at participating retailers.

» Learn more: Make the most of your credit cards with shopping portals.

When it comes time to book a trip, those points can be redeemed directly through Chase or with another airline or hotel partner. Although travelers may get more value by transferring their points to one of nine airline or four hotel partners, they can get a value of 1.25 cents per point when making bookings through the Ultimate Rewards travel site.

More importantly, many of the travel insurance benefits on the card apply only to those who use their points directly through the Ultimate Rewards® site. If the cardholder’s trip is paid for with Ultimate Rewards® points, credit available on the card or a combination of both, travel insurance benefits may apply. However, it does not apply to award trips purchased by Ultimate Rewards® that were transferred to a partner.

Chase Sapphire Preferred complements other cards

Chase offers several consumer and business cards that also earn either cash back or Ultimate Rewards® points. The Chase Sapphire Preferred® Card is a great companion to these cards, because cash-back rewards can be easily turned into Ultimate Rewards® points.

On the consumer side, the Chase Freedom® and Chase Freedom Unlimited® cards earn cash back. But when a cardholder also owns the Chase Sapphire Preferred® Card, the cash back can be converted to Ultimate Rewards® points at a rate of 100 Ultimate Rewards® points per $1 in cash back. This creates additional value on the spending on the 5X bonus categories on the Chase Freedom® card every quarter.

Small-business owners can also cash in on extra Ultimate Rewards® points. Those with the Ink Business Cash℠ Credit Card credit card can also convert their cash back to points at the same rate of 100 Ultimate Rewards® points per $1 in credit cards.

People carrying a balance get the least benefit

While all of these benefits may sound great, the Chase Sapphire Preferred® Card may not be the best card for everyone. Cardholders who usually take extra time to pay off their balances could find they don’t get as much of their rewards over time because rewards cards cost more in overall interest and can devalue the points earned.

Because the Chase Sapphire Preferred® Card is a rewards card, it comes with a higher interest rate on balances (The ongoing APR is 17.74% - 24.74% Variable APR). The higher the balance you carry on your credit card, the more interest you will pay to the bank, which in turn undermines your reward value. If you plan on paying off a purchase over several months, consider using a low-interest credit card instead.

Users can get only one Chase Sapphire card

While both the Chase Sapphire Preferred® Card and Chase Sapphire Reserve® are great cards, the bank’s policy limits cardholders to having only one Chase Sapphire account. So does it make sense for you to get the Chase Sapphire Preferred® Card if the Chase Sapphire Reserve® could offer more rewards?

» Learn more: Is the Chase Sapphire Reserve a better card than the Chase Sapphire Preferred?

The Chase Sapphire Reserve® is best for travelers who can maximize all the card’s benefits to offset the $450 annual fee, including Priority Pass Select membership and statement credits for either TSA Precheck or Global Entry. For those who still want to travel and earn rewards for their everyday spending, but won’t be traveling enough to justify a high annual fee, the Chase Sapphire Preferred® Card could be a better fit.

Are you getting the most out of the right card?

Even the best travelers may be limiting their potential return with the Chase Sapphire Preferred® Card. For those who are looking for more rewards, the Chase Sapphire Reserve® may be a better overall option.

Before deciding if the Chase Sapphire Preferred® Card is the right card for your travel demands, consider your lifestyle and how much you plan on spending with the card. The benefits are great, but if you won’t be able to use them, you could lose money instead due to the annual fees. Before applying for either card, ask these three questions:

  1. Can I maximize the award categories?
    With 2X points per $1 spent on travel and dining, the Chase Sapphire Preferred® Card offers strong earnings opportunities on the road. When combined with another Chase card, that can turn into major Ultimate Rewards points through smart spending. If you have the discipline to capitalize on the right spending at the right time, then the Chase Sapphire Preferred® Card may be a smart addition to your wallet.
  2. Will I get the most out of points?
    Points are only good if you can use them for real rewards. If you can’t trade in your points for travel—either through the Ultimate Rewards site or through a transfer partner—then you may be leaving value on the table. If travel isn’t your primary goal, consider a cash-back credit card instead.
  3. Will I get more benefit out of another card?
    Consider all the travel you end up doing year to year. If you plan on visiting numerous destinations by air and land, it may be worthwhile to use the Chase Sapphire Reserve®. But if you care only about earning points to save toward one vacation every year, then the Chase Sapphire Preferred® Card may be the better card.

Although it offers great benefits and rewards, the Chase Sapphire Preferred® Card isn’t for everyone. Before applying for it, do the research to determine if it’s the right addition to your wallet.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2018, including those best for:

 

Planning a trip? Check out these articles for more inspiration and advice:
Chase Sapphire Preferred: Top 5 reader questions
5 underrated reasons why you need a Chase Sapphire Preferred
NerdWallet’s best Chase credit cards of 2018

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