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Does the Chase Sapphire Preferred’s Bigger Bonus Offset the Upfront Annual Fee?

March 21, 2019
Reward Optimization, Travel, Travel Credit Cards
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The popular Chase Sapphire Preferred® Card has changed two significant features: the annual fee and sign-up bonus.

The new terms don’t affect current cardholders, but if you were considering the Chase Sapphire Preferred® Card, here’s what you need to know.

Pay the annual fee the first year

The Chase Sapphire Preferred® Card previously offered a ton of ways to earn points with no upfront fees. That first part won’t change, but now, cardholders will need to pay the $95 annual fee right out of the gate.

No upfront fee used to be a big draw for the Chase Sapphire Preferred® Card. It let folks jump into the flexible Chase Ultimate Rewards® points ecosystem at no cost. Eliminating that fee-free first year is unfortunate, but there’s some good news.

>>Learn more: Chase Sapphire Preferred® Card review: A must-have for any traveler

Get a bigger sign-up bonus

To compensate for charging you for that first year, Chase has increased the sign-up bonus you can earn: Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. Points are worth 1.25 cents each when redeemed for travel booked through Chase Ultimate Rewards®, so this new bonus is worth up to $125 more than the old one.

The old bonus was 50,000 points for the same amount of required spending. When redeemed through Chase, that was $625 toward travel.

>>Learn more: How frugal folks can meet credit card spending requirements

This is a big boost that’s equal to Chase’s premium Chase Sapphire Reserve®, which has the following sign-up bonus: Earn 50K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards® . That card has a higher annual fee of $550.

Cardholders can come out ahead

When everything balances out, you’re getting $30 extra value under this new plan when you redeem for travel rewards.

>>Learn more: How to earn and use Chase Ultimate Rewards®

And everything else about the Chase Sapphire Preferred® Card is sticking around. Cardholders still earn 2 points on travel and dining purchases and 1 point on other qualifying purchases, 1:1 point exchange with popular airline and hotel loyalty programs, and no foreign transaction fees.

The Chase Sapphire Preferred® Card vs. the Chase Sapphire Reserve®

There are only a few instances where these changes should cause you to change your choice of credit card. If you are concerned about that yearly fee for the first year, you may want to look elsewhere. The $95 is a pretty standard price for a points card with as much value as Chase is offering here, so consider a travel rewards card with no annual fee to secure a cheaper option.

>>Learn more: Chase Sapphire Showdown

Additionally, with an increased bonus, the Chase Sapphire Preferred® Card has upped its value, but if you aren’t planning on earning it, this might not be the card for you. Major points bonuses for spending money after opening an account come standard on most rewards-focused credit cards.

But with sign-up bonuses that are now equal in travel value, should you get the Chase Sapphire Preferred® Card instead of the costlier Chase Sapphire Reserve®?

» Learn more: Chase 5/24 rule explained

If you can justify the $550 annual fee, the Chase Sapphire Reserve® might be a better option for you. The sign-up bonuses may provide equal value, but the extra benefits that come with the Chase Sapphire Reserve®, such as the annual travel credit and a higher points-per-dollar earning rate, are still unmatched by the more affordable Chase Sapphire Preferred® Card.

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 2020, including those best for:

Planning a trip? Check out these articles for more inspiration and advice:
Chase Ultimate Rewards: The complete guide
NerdWallet’s top travel credit cards
How frugal folks can meet credit card minimum spend requirements

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