2) Flexibility. Chase points are worth 1 cent per point if you redeem them for cash back. Cash back is super easy to do, but it’s also a very bad return on your reward. Alternatively, you can book travel through Chase’s portal (similar to Travelocity or Expedia) at a redemption rate of 1.25 cents per point. Note: you can use your points to pay down the price as well. For example, if a flight costs $500, you could use 10,000 points to knock it down by $125 and pay for the rest yourself. So, we get 25% more value when booking travel with our points, which is significant. Considering the Sapphire Preferred, those 40,000 points are worth $400 in cash back, but they are worth $500 in travel when booked through Chase’s site. But we can do even better than that…much better.
3) Transfer partners. If you are like many people, you think about credit card rewards in a very “inside the box” fashion. So did I until I started to learn more about them. Old school logic says “I use Southwest points to fly on Southwest flights. I use Marriott points to stay at Marriott hotels.” You get my drift. But what if I told you that you could earn points that could be collected and then transferred (when you were ready to actually book a reward) to Southwest, or to Marriott, or to several other airlines and hotel chains? Well, Chase points allow you to do exactly that. Rather than consistently committing your points to one flyer or hotel program, you hold them in your Chase Ultimate Rewards account until you are ready to book your travel. Want to do a vacation that involves flying Southwest and staying in a Hyatt? Lucky you! Chase points can be transferred to both of those programs. If you have enough points, you could transfer the required points to Southwest and book your flights and then transfer more points to your Hyatt account to book the hotel! The transfers are instant, which means you shouldn’t miss an award seat waiting for your points to transfer. And the partner list? Very impressive. There are a few partners that require a little more knowledge to use with confidence (e.g. using Korean miles to fly Delta…you can totally do it since they are in the same alliance), but the ones most of you care about are United, Hyatt, Southwest, British Airways, Marriott, Ritz Carlton, and Virgin.
4) Ease with which they can be accrued after the signup bonus. Some cards are not very inspiring once the honeymoon period (a.k.a. the pursuit for the signup bonus) ends. But Chase points? They are easy to acquire in meaningful quantities because a) they have three cards that earn these points and b) they all have terrific category bonuses. Let’s use Southwest as an example because I absolutely love them. I have applied for a few Southwest cards and gotten amazing signup bonuses from them (50,000 points after spending $2,000 in 3 months). I have stretched Southwest points a long way, folks, so my Southwest signups were terrific. But after that? The card will earn 2 points per dollar for Southwest purchases and 1 point per dollar for everything else. But the Ultimate Rewards-earning cards? Check it out:
- The Freedom, which I have not mentioned until now, consistently earns 1 point per dollar on “everything else”, but it earns 5 points per dollar on one category per fiscal quarter (e.g. for Q4 of 2015 the category is Amazon). Guess the one place where I am using my Freedom card right now…
- The Sapphire Preferred earns 2 points per dollar on dining and travel (where people spend a lot of money) and 1 point per dollar on everything else. Notice that if you made purchases for Southwest flights using the Sapphire instead of the Southwest card, you would still be earning 2 points per dollar because Southwest purchases fall under the travel category. BUT, the points you are earning can not only be used on Southwest…they can used on any kind of travel!
- The Ink Plus earns 5 points per dollar on satellite or cable television, home phone, cellular phone, and internet spending. AND it earns 5 points per dollar on office supply store spending…even gift cards! It earns 2 points per dollar on gas, 2 points per dollar on hotels directly booked, and it earns 1 point per dollar elsewhere.
But what about those annual fees, Jim? Glad you asked. The Freedom has no annual fee. The Ink Plus has a $95 annual fee, but it is waived for the first year. Fortunately, there is a no annual fee Ink card to which you can downgrade the Ink Pus after the first year…and it still has the same 5x categories. The Sapphire Preferred does come with a $95 annual fee, but the lowest annual fee Southwest card has a $69 annual fee. So, for an extra $26, you can have all three of these cards and get:
- 5x points on one category per quarter (Freedom)
- 2x points on dining and travel (Sapphire Preferred)
- 5x points on cable/satellite, cell phone, home phone, internet, office supply (Ink)
- points which are MUCH more flexible than those earned with the Southwest card yet which can still be used on Southwest!
Okay, full disclosure. The Ink cards are business cards, so some may not feel comfortable applying for one. But, you do not have to “own a business” in order to get it. Do you babysit for money? Do you sell crafts that you make? Then you are a sole proprietor and are able to apply for the Ink (or any other business card) using your Social Security number. If you apply and are turned down, call Chase to see if you can be reconsidered. The Ink is a card worth fighting for!
Please keep this in mind as well: in order to transfer your points to travel partners (such as Southwest, Hyatt), you must have either the Sapphire Preferred or the Ink Plus. In other words, it’s going to cost you the $95 annual fee to have the flexibility to transfer your points. If you are really utilizing these cards and acquiring a lot of points, however, it is very easy to justify that annual fee given the greatly increased value of your points.
Also, Chase has tightened up a bit in terms of how many of their cards they will let you have, so it may not be prudent to apply for all three in a short time period. If you live near a Chase branch, try to work with a branch manager. That has worked wonders for me. For optimal rewards, it is best to have all three cards, but if that doesn’t work, look at your spending (how much and in which categories) to determine which combination of cards will be the best for you. And if you don’t know, ask me! Thanks for letting me share this with you. I have leveraged Chase Ultimate Rewards many times, and every time I see my balance start building back up, I know my possibilities are endless! If you enjoyed this post, please email it, tweet it, or Facebook share it so others can get closer to free travel as well!