Chase Sapphire Preferred Card Review

Chase Sapphire Preferred CardI’ve always been interested in potentially getting the Chase Sapphire Preferred card. With a fair amount of co-workers and friends talking about the card recently, I decided to do some digging and see what all the hype was about – and last month, I finally decided to take the plunge and sign up for the card. Here’s why I did it:

Point Accumulation
40,000 Sign-On Bonus
: This may have been what ultimately got me to get the card. Conservatively valued at $400 (1 cent per point), but if redeeming the points for travel through Chase Ultimate Rewards, the sign-on is worth $500 because you get a 20% point discount on travel purchases (similar to what the Amex Platinum card does).

Double Points on Travel, Restaurants, and Transportation: According to my year-end Amex spend analysis, 73% of my charges are on travelrestaurants, and transportation (taxis, tolls). This works out great for me because even if I value a Chase point at just 1 cent per point, for much of my spend, I’m getting 2 points per dollar. Not a bad deal at all.

Triple Points on Restaurants for First Fridays: As if we needed extra motivation to go out to eat on Fridays, Chase offers triple points at restaurants on the first Friday of each month for the rest of 2013.

7% Annual Point Dividend: In addition to double points on travel, restaurants, and transportation, you’ll get a 7% annual point dividend on all of the points you’ve earned throughout the year.

For example, lets say you spent $30,000 in a year and 70% of your spend ($21,000) earned 2 points per dollar and 30% of your spend ($9,000) earned 1 point per dollar. You would have earned 42,000 points off of the travel, restaurant, and transportation spend and 9,000 points on everything else for a total of 51,000 points (1.7 points per dollar). Take 7% of that 51,000 points and you get a bonus of 3,570 points (worth at least ~$35) for a total accumulation of 54,570 points – boosting your average points per dollar to over 1.8!

Redeeming Points
Options: I haven’t actually redeemed any points yet, but the redemption options look plentiful. The easiest, but most unattractive redemption option is to just redeem your points for cash or gift cards at 1 cent per point. If you book travel through Ultimate Rewards, you get a 20% point reimbursement, so you’re at least realizing 1.25 cents per point. Beyond that, you can transfer points to a variety of travel partners including United, British Airways, Amtrak, Marriott, Southwest, and Hyatt (to name a few). For a detailed listing of possible redemption options, take a look at this post from The Points Guy.

Value of a Point: At the lowest end, it seems a point is worth 1 cent if you just redeem for cash / gift cards. Booking travel through the Ultimate Rewards mall gets you a value of 1.25 cents per point. When transferring points to travel partners, Million Mile Secrets estimates a value of 1.5-2 cents per point while The Points Guy values a point conservatively at 2 cents per point.

The Intangibles
Non-Amex Card
: I’ve been searching for an alternative to my Amex cards for some time now since not all establishments accept Amex (especially outside of NYC). It’s great to know that I have a go-to Visa/Mastercard in my wallet that, like my Starwood Amex, can earn me some major points.

No Foreign Transaction Fees: I previously signed up for a Capital One credit card just to use it overseas. At the time, that card was one of the only free cards that offered no foreign transaction fees. Now, with the Chase Sapphire Preferred card, I have a card in my regular rotation that can serve as an alternative to using my Amex Platinum card overseas (from my experience, a lot of places overseas don’t take Amex).

Sexiness Factor: This card is sexy – I look at it and just want to use it to spend money. And it’s not just some piece of meat plastic either. It’s metal with a plain front – with numbers on the back, which keeps the front looking nice and smooth – just the way I like it.

Fees
First Year Fee Waived: Although the Chase Sapphire Preferred card does come with a $95 annual fee, it’s waived for the first year. So I get a full year to try out the card to see if I like it. If not, I can cancel the card next year, no big deal. I’ll have accumulated a fair amount of points through the sign-on bonus and my regular spend – which hopefully would have allowed me to pay for a couple of trips (or at least some plane tickets and hotels).

Final Verdict
No final decision yet as I still have almost a year to decide whether I want to keep the card, but so far so good. At the end of the day, the real question may be whether I want to keep two everyday spend cards (Starwood Amex and Chase Sapphire Preferred cards) around, since both charge annual fees. I’ll start thinking about that question and possibly even come up with a spreadsheet in the next couple of weeks to help me decide.

If you’re interested in applying for a credit card, you can click here to cash in and get 40,000 bonus points after spending $3,000 in 3 months!

Other Resources
Is the American Express Platinum Card Worth It?
American Express Starwood Card Review
Goodbye Starwood Amex
Starwood Preferred Guest Program
How to Bid for a Hotel on Priceline

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Roger

I’m a 30-something professional with a career in digital media, a background in finance, and a passion for value. lifelaidout is my attempt at sharing some of the thought processes that I use in my everyday life to identify value and save time, money, and energy.


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