I’m obviously a big believer in using credit cards to accumulate points and I’m jumping on the bandwagon of the Chase Sapphire Preferred credit card. It’s quickly become a solid “go to” card for travelers thanks to its strong sign up bonus and numerous travel partners that you can transfer points to.
Before we get into the specifics of Sapphire Preferred, here’s a quick look at the rewards program. Your spend will earn points in the Ultimate Rewards (UR) program. Your UR points can be used to get cash back, redeem for gift cards, get a statement credit and book travel.
The Sapphire Preferred has a $95 annual fee that is waived the first year. You’ll earn 2 points per dollar on travel and dining and 1 point per dollar on everything else. One UR point is worth 1 cent when you’re looking to redeem. The Points Guy explains what types of expenses are covered under “travel,” in this post. There are more categories than you may think!
- The sign-up bonus: Earn 50K UR points after you spend $3,000 in 3 months. Fifty thousand UR points is equal to $500, or a 16.7% rebate.
- Transfer UR points to travel partners: Pad your loyalty program points by transferring your UR points on a 1:1 basis to a variety of hotel and airline partners. The complete list includes Hyatt, Marriott, Priority Club, United/Continental, Southwest, British Airways, Korean Airlines and Amtrak.
- 7% Annual Points Dividend: At the end of the calendar year, you’ll receive a 7% bonus on all of the points you earned during the year, including the sign up bonus. This means that your sign up bonus would actually be 53,500 points. Your everyday spend that earns 1 point per dollar would be 1.07 points and your spend on travel and dining would be 2.14 points.
- No foreign transaction fees: When you travel overseas, some credit cards will charge you a small fee for using your credit card. These fees can really add up over the duration of your trip so this feature could save you a lot of money.
- Receive a 20% discount when redeeming your points for travel: When you book through the UR portal, you’ll receive 20% off. For example, the Chase website uses the example of spending your 50K ($500) bonus for $625 worth of airfare.
Does the $95 annual fee make this card worth keeping after the first year?
Everyone will value the perks differently so from a monetary standpoint, I think you can look at this in one of two ways:
- Can you earn enough UR points/cash back to offset the annual fee? – If you use the Sapphire Preferred as your primary card, you can easily earn enough points through your everyday spend. There are also plenty of opportunities to earn bonus points when you shop through the UR Mall.
- Can you earn enough UR points for the 7% dividend to offset the annual fee?- In order to fully offset the $95 annual fee from the 7% dividend, you would need to spend around $136,000, give or take depending on the amount you spend in travel or dining.
Depending on your annual expenses, the 7% dividend will, at the very least, help you offset a portion of the annual fee. This could help make it more manageable.
Overall, this is a great card to have if you enjoy traveling. With the UR program, there are so many ways to earn and redeem your points towards free hotel rooms or free flights. If the numbers for the annual fee don’t work out for you, the Sapphire card comes in a standard version with no annual fee and without all the perks listed above.