Last time, I mentioned how I started out with a cash back credit card in 2014 because I could not imagine myself paying an annual fee for a travel credit card. I remember hitting the sign up bonus for the cash back card, which was $150 at the time for spending $500 in 90 days and being overjoyed to take the cash back, decreasing the amount I owed to the credit card company to $350. Over the next few months, I racked up over $50 more in cash back on that credit card before I realized I made a BIG mistake.
I finally warmed up to the idea of travel credit cards and discovered that the cash back I had been earning on my Chase Freedom credit card could be converted into travel points by using Chase’s “combine points” feature in the Chase Ultimate Rewards portal. Chase has recently hid that option a bit, but if you click on the earn/use tab, a drop down menu appears and you can now see that option in the Ultimate Rewards portal.
For all of these travel points systems the general rule is that $1 in cash back would be equal to 100 travel points, so if I had transferred that $150 over to a Chase travel credit card, it would have become 15,000 Chase Ultimate Rewards travel points which I could redeem for travel on the Chase portal or by transferring to a Chase travel partner. To put that in perspective, we recently stayed at the Grand Hyatt Melbourne, where room rates were roughly $225-250 USD per night. Instead we transferred Chase points to its hotel partner, Hyatt and redeemed 15,000 points per night for 3 nights. Yes, you read that correct, if I had held on to the cash back to be combined with a Chase travel card, I would have gotten more value than by just redeeming the cash back and that is just the tip of the iceberg.
Chase Ultimate Rewards remains my favorite transferable travel points system today, six years later and the above scenario is one of the main reasons it is. American Express does not allow you to transfer cash back over to travel points at all, and Citi now allows it with the Double Cash card, but that usually does not offer a sign up bonus like the Chase Freedom and Chase Freedom Unlimited do.
In this post we are going to go over the basics of Chase Ultimate Rewards and some of the other advantages they have over the competition. Of course, Chase Ultimate Rewards are not perfect, and we will go over some drawbacks and rules you will need to be aware of when starting out with Chase travel rewards credit cards.
CHASE BASICS
Chase keeps things simple when compared to American Express in the travel credit card field. There are just two personal travel credit cards which earn Ultimate Rewards, the $95 annual fee Chase Sapphire Preferred, the card I started with, and the premium $550 annual fee Chase Sapphire Reserve which competes with the American Express Platinum card. There are Chase business credit cards as well which earn Ultimate Rewards points, but we will save that for another time. With either the Preferred or Reserve you unlock the ability to change over cash back from the Freedom and Freedom Unlimited to Ultimate Rewards travel points via the “combine points” feature.
The $95 annual fee Chase Sapphire Preferred card currently comes with a great sign up bonus of 60,000 Ultimate Rewards points for spending $4,000 in 90 days. Again please remember you will need to pay in full each month or be charged interest, so only sign up if you feel comfortable meeting the spending requirement. The Sapphire Preferred offers a bonus of 2 points per $1 spent on travel and restaurants (both of which are fairly inclusive in what counts for the bonus). Meaning if you signed up for the Preferred and spent all $4,000 in 90 days on travel and dining, you would have 68,000 Chase Ultimate Rewards.
The Sapphire Preferred also comes with basic trip insurance and protection policies, has no foreign transaction fees, opens up access to Chase’s transfer partners, and provides you with the ability to redeem your points through the Chase travel portal (powered by Expedia) with a bonus multiplier of 1.25. That means if you find a flight for $375 on the Chase travel portal, you would only need to redeem 30,000 Ultimate Rewards points if you have the Sapphire Preferred. That multiplier also works for the cash back you transferred over to your Preferred Ultimate Rewards account, making cash back instantly more valuable. Generally though this will not be your best value, but it is an option to keep in mind.
The Sapphire Reserve comes with a $550 annual fee and offers a sign up bonus of 50,000 Ultimate Rewards points for spending $4,000 in 90 days. Now, I am sure you are thinking, a lower sign up bonus and much higher annual fee, how could it possibly be worth that much more? For starters, the Sapphire Reserve comes with an annual $300 travel credit that can be used on any travel except for refilling your gas tank that effectively lowers the annual fee to $250. I use this easily every year without even realizing most of the time. Also, you now earn 3 points for $1 spent on travel and dining, so you will wind up with 62,000 points with the sign up bonus if you just spend on travel and dining, only 6,000 points behind the Sapphire Preferred.
The Reserve also offers that 1.5 bonus multiplier we discussed last time through the Chase travel portal, so now you can redeem 30,000 Ultimate Rewards points for a flight which costs $450 with the Reserve, so now the cards are pretty much even. It gets better though, the Reserve provides a free Priority Pass membership for as long as you have the credit card, getting you access to over 1,000 lounges worldwide, goodbye expensive airport food, hello free lounge food and drinks.
Additionally, you can apply for either Global Entry or TSA Precheck and receive a full refund thanks to the Sapphire Reserve card. Finally, the Reserve also has no foreign transaction fees, access to Chase’s transfer partners, comes with much better travel protections and insurance, including primary renter’s car insurance. I do not need to purchase separate insurance when renting most cars for up to a month! There is so much more that will not fit into a beginner’s guide that we will save for another post, but you can now begin to see why the Sapphire Reserve is worth the higher annual fee.
Of course the other item you have to know to start with Chase are its travel transfer partners, like Hyatt, United, Southwest and more. As you can see below, Chase has 10 airline partners and 3 hotel partners. Before you can transfer to a partner, you must create an account with them. You should also do your research first and make sure the partner has availability to use your points before transferring like we discussed in the previous post. Once you transfer your points to a partner, you cannot transfer them back to Chase. Most partner transfers are instant and you will see them in your partner account if you login right after the transfer, but some may take 1-2 business days to complete. This is my preferred way of using points as you can frequently get more value than using them through the Chase travel portal, even with the Sapphire Reserve card 1.5 bonus multiplier.
Besides the Melbourne example above, Hyatt has one hotel in Atlantic City and during the busy summer months, we were able to use 12,000 Hyatt points, transferred from Chase to book a hotel room which would have been over $500 on a Saturday night, pretty incredible, right? We will go more into specific redemption possibilities in a later post.
CHASE ADVANTAGES
In my mind there are three main advantages to the Chase Ultimate Rewards system when compared to American Express and other competitors. The first two are card specific and we discussed above. The Preferred and Reserve offer a bonus multiplier through using the Chase travel portal for those who prefer to keep things simple. Other transferable points systems do not have this feature. The second is the simplicity of the $300 annual credit from the Sapphire Reserve, like I mentioned it could be used on almost anything. Citi’s competitor the Prestige only offers a $250 credit and the American Express Platinum offers a very restrictive $200 airline credit. That airline credit cannot even be applied to the actual ticket price, it can only be used for incidentals like seat selection, checked bag fees or purchasing items onboard. I strongly prefer the simplicity of Chase’s credit over jumping through hoops for the Amex credit.
The third major advantage of Chase is the ability to not only transfer your cash back into the travel sphere of cards with the Preferred and Reserve, but also the ability to do unlimited transfers with your spouse and immediate family members. It is the perfect system for couples to pool points together. Citi caps points pooling at 100,000 per year and American Express does not allow pooling, again making you jump through an extra hoop if you want to use your points with your spouse. Simplicity is key in my mind and that is why Chase remains my top choice.
While not an advantage over American Express (we will discuss Amex Offers in our next post), Chase also has a shopping portal built into Ultimate Rewards, allowing you to earn additional bonus Ultimate Rewards points. As you can see below, Chase partners with a lot of your favorite stores to offer additional points for clicking through to the store from Chase’s portal. During the holiday shopping months the Chase Freedom card 5% category was department stores like Macy’s. At the same time the Chase shopping portal was offering an extra 10% for clicking through to Macy’s from its portal before buying something. This way we were able to earn 15 Ultimate Rewards points for each $1 we spent at Macy’s, an incredible way to earn Ultimate Rewards points quickly.
CHASE RULES AND DISADVANTAGES
There are two major rules to be aware of when applying for Chase credit cards. The first is the 48 month rule. If you apply for either the Sapphire Reserve or Sapphire Preferred card you would not be able to earn the sign up bonus on the other Sapphire card for another 48 months. You could start with the Sapphire Preferred and upgrade to the Reserve within the 48 months, but you would not be able to earn the separate 50,000 point sign up bonus from it.
The second, more important rule is commonly referred to as “5/24”. Put simply, Chase will not approve you for any credit card if you have opened 5 or more new credit card accounts within a 24 month period, even if your credit score is over 800. That is why I highly recommend starting with Chase before moving on to cards from Amex, Citi and others. For those who are first starting that may seem like a lot of credit cards in a 2 year period, but as you become a more advanced travel hacker, you will understand why so many people worry about their “5/24 status”.
Chase Ultimate Rewards, like the other systems, have a few drawbacks. While Chase has the best hotel transfer partner in Hyatt, they definitely are a step behind American Express when it comes to airline transfer partners, so we hoard most of our Chase points for Hyatt redemptions. Additionally as you will see next time, I have come to prefer the diversity that American Express provides through their Amex Offers over the straight point bonus through the Chase shopping portal. Finally, the Chase Sapphire Reserve has now become a $550 annual fee credit card this year for new customers after being a $450 annual fee card since introduction. It makes the Amex Platinum a more compelling credit card now if you can take advantage of all its perks.
NEXT UP
Next time we will explore American Express’ Membership Rewards and why having credit cards with both Chase and Amex makes a ton of sense in the travel credit card world. In the meantime, if you have any questions on the basics of Chase Ultimate Rewards, let us know below!
(Disclosure: If you sign up for a card through our sign up link, we will receive a referral bonus, but there will be no extra obligation on you).
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Hi, we are Gökçe and Steve, a married Turkish and American full time travel couple. We left behind our New York City office jobs and our home to experience the world and all its wonderful cultures. We also want to teach you how you too can turn the money you spend every single day into FREE or CHEAP TRAVEL, just like we do, through using credit card points here on this channel! We hope to inspire you to chase your own dreams and we thank you for subscribing to our channel to follow us along on our journey!
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