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When I’m trying to decide what my next credit card is going to be, I consider a lot of factors. What trips do I want to take in the next one to two years? What points do I currently have? What points do I want? What’s my 5/24 status?
These questions always help guide me towards a card that will help me meet my goals. I don’t open cards just for the sake of opening them. Generally speaking, points are devalued by their issuers over time, so I want to be sure I have a plan in mind when opening a card.
Despite being in points and miles for a few years now, I can confidently say that the Chase Sapphire Preferred® Card is the next card that I’ll be opening. The Chase Sapphire Preferred is a card I often recommend as a first card. So after years in the hobby, with dozens of cards opened, why am I opening a card that I normally would recommend for newcomers?
Tag along and I’ll share with you the reasons why the Chase Sapphire Preferred is a great card even for points and miles veterans, if you can meet the right conditions to open it.
I’ve Opened Less Than 5 New Cards In The Past 24 Months
One of the biggest reasons the Chase Sapphire Preferred is my next credit card is simply because I’ve opened less than 5 new cards in the past 24 months. This is often referred to as the “Chase 5/24 rule”.
If you’re not familiar with the Chase 5/24 rule, put simply it states that Chase will not let you open any new Chase credit cards if you’ve opened more than 5 cards in the past 24 months.
For the first time since beginning in points and miles, I have finally opened less than 5 cards in the past 24 months. This means that I’m now eligible to open some Chase cards again.
I’ve already used a few slots to open the Southwest Rapid Rewards Priority Credit Card and the Southwest Rapid Rewards Premier Business Credit Card to earn the Southwest Companion Pass for this 2020 and 2021, but that’s just two cards. Since I still have some slots remaining, I can open any Chase card that I want.
Being below 5/24 isn’t really the best reason for opening the Chase Sapphire Preferred next, but it is a benchmark requirement. If I wasn’t under 5/24, then I couldn’t even consider opening a Chase card. Since I am, it opens the door to the world of Chase.
I’m Downgrading My Chase Sapphire Reserve®
The next obstacle to opening the Chase Sapphire Preferred is having a Chase Sapphire Reserve®.
Why would I want to downgrade a card that has so many great perks and benefits? In 2017, Chase started tightening up application rules for its line of Sapphire cards. Previously, you could have one of each, but now Chase will only let you have one Sapphire card at a time, and you can only receive one Sapphire bonus every 48 months. As long as I have my Sapphire Reserve, I won’t be eligible to open a Sapphire Preferred.
This is more a strategic move than anything. I definitely wouldn’t be downgrading my Sapphire Reserve if I wasn’t eligible to open another Sapphire card and receive a bonus.
There are a lot of great perks that come with the Sapphire Reserve. The travel insurances offered by the card are some of the best available, but the Sapphire Preferred comes with solid travel insurance as well. Plus I’ve booked most of my trips already for next year, and if anything changes, I can just book them with my new Sapphire Preferred to get travel insurance anyway.
Overall, I’m not losing a ton by downgrading my Sapphire Reserve to a card like the Chase Freedom and opening a Sapphire Preferred instead. This is another hurdle in the way that I can easily overcome.
Chase Ultimate Rewards Are Highly Valuable For Hotels
When it comes to prioritizing points earnings, I always prioritize transferable currencies first. This means I typically want to earn Chase Ultimate Rewards, American Express Membership Rewards, and Citi ThankYou Rewards before earning specific airline or hotel points.
Each transferable points program has its own unique transfer partners. Chase Ultimate Rewards are highly coveted for transferring to Hyatt Hotels. I haven’t calculated it, but I’d guess that at least 75% of my Ultimate Rewards end up being transferred to Hyatt.
No other transferable currency can be transferred to Hyatt. Hyatt’s top tier hotels cost start at 40,000 points per night versus 80,000+ in other programs. There are some select hotels that cost a bit more from Hyatt, but it is usually worth it. I’ve used my transferred Hyatt points to stay at hotels that would cost well over $1,000 per night such as the Park Hyatt Maldives or the Miraval in Austin.
In addition to having Hyatt as a transfer partner, you can redeem Chase Ultimate Rewards through the transfer portal. With the Sapphire Preferred, you can redeem them for 1.25 cents per point, but with the Sapphire Reserve you can redeem them for 1.5 cents per point.
If 75% of my Ultimate Rewards go to Hyatt, 95% go towards hotels in general. Between the portal and Hyatt, Ultimate Rewards are one of my go to currencies for hotels. Contrast this with Membership Rewards which are often used for flights, and it helps balance out my flight and hotel needs.
Chase Ultimate Rewards Are My Biggest Need Right Now
After having to cancel most of my trips this year, I’m really lacking in Chase Ultimate Rewards. Over the past few years, I’ve been over 5/24 and focused on earning other currencies, such as American Express Membership Rewards. This meant I was burning my Ultimate Rewards while not really earning any.
I have a healthy amount of Membership Rewards, Capital One Spark Miles, and various hotel and airline miles. What I’m starting to run out of are Ultimate Rewards. Planning long term, I’ll need more Ultimate Rewards. Most of my trips next year are scheduled at Marriott properties, but once I burn through my stash of Marriott points, I will find myself returning to stays at Hyatt and third party hotels booked through the Chase travel portal.
I don’t need any Membership Rewards or ThankYou Rewards right now. I’ve used quite a bit of my stash and still have some left over. I always seem to find myself burning through Ultimate Rewards faster than any other points currency out there.
Since the Chase Sapphire Preferred is the highest Ultimate Rewards bonus available on personal cards right now, and Ultimate Rewards are what I need the most, it is the clearest choice to be my next card.
I’ll Eventually Upgrade The Card To A Sapphire Reserve
Normally, I’d never upgrade a card. Upgrading a card means you don’t get a bonus, and I want as many bonuses as I can get. One of the very few exceptions to this rule is upgrading the Chase Sapphire Preferred to a Sapphire Reserve.
Since there’s so many restrictions surrounding opening Sapphire cards, I’d have to wait 4 years before being able to open a Sapphire Reserve and get the bonus. Plus, I’d have to downgrade the Sapphire Preferred I plan on getting before I could open a Sapphire Reserve anyway. Instead, after a year, I’ll just upgrade my Sapphire Preferred to a Sapphire Reserve.
This is one of the few cases where upgrading a card makes sense. Just be sure it fits in with your long term strategy. If you’re not sure or want help with your long-term card strategy, feel free to schedule a time for one of our free card consultations.
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Right Now I Don’t Need Any Premium Benefits
There are a lot of great benefits that come with the Sapphire Reserve that I simply don’t need right now. For one, I already have lounge access through my Platinum Card by American Express. Also, my Global Entry doesn’t expire for another year and a half. Further, I’ve already used all of the travel credit for this year.
Simply put, I don’t need the extra benefits that come with the Chase Sapphire Reserve® right now. The only benefits I need are more Ultimate Rewards points, the ability to transfer to travel partners, and travel insurance. I get all of these from the Chase Sapphire Preferred. Any premium benefits that I do need I’ll get from one of the multiple other premium cards that I currently have.
The Chase Sapphire Preferred Has A Low Annual Fee
I don’t have a problem with annual fees. I keep a lot of high annual fee cards because the benefits outweigh the cost. Since I’m not traveling that much right now, it is getting harder to justify the cost of having multiple high annual fee cards.
The Chase Sapphire Preferred has a $95 annual fee. Lower annual fee plus highest Ultimate Rewards bonus available makes the Sapphire Preferred a real winner right now.
Simply Put: The Chase Sapphire Preferred Is The Right Card For Me
There’s a lot of great reasons to open the Chase Sapphire Preferred. For me, it comes down to timing. Since starting my points and miles journey, I’m finally below 5/24. I’m also about 4 years out from the last time I earned a bonus on any Chase Sapphire card. With stricter rules coming out from Chase over the past few years, this is the first time I’ll be eligible for another Sapphire bonus.
Right now, I don’t need the premium benefits that come with the Chase Sapphire Reserve®. What I really need are Chase Ultimate Rewards, and I need as many as I can get. The bonus on the Sapphire Preferred is the highest Ultimate Rewards bonus available right now. Coupled with a low annual fee, everything lines up perfectly to make the Chase Sapphire Preferred the next card that I’ll be putting in my wallet.
Whether you are new to the points and miles game or experienced, the Chase Sapphire Preferred deserves a solid look if you’re eligible to open it. If you’re not sure, or want some guidance feel free to utilize our free credit card consultation service. Myself or another member of the MileValue team will be happy to help walk through your specific scenario and choose the right card (or cards) for you.
Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.
With a bonus of 60,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!
Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are the author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.
The comments section below is not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all questions are answered.
can you receive a sign up bonus for a new Sapphire Preferred while having Sapphire Reserve? Do you downgrade Reserve to Freedom card, wait a while then apply for Preferred in order to shoot for new sign up bonus? Thanks.
Unfortunately not – Sapphire Rules dictate that you can’t get a bonus on a new Sapphire product so long as you’re a cardholder of an existing Sapphire product. You’re correct – you would need to downgrade the Reserve to a Freedom first and then you could apply for the Preferred so long as it’s been > 48 months since you received a bonus on any Sapphire product (Sapphire or Reserve).
Hope that helps clarify!