Chase claims to offer the Ultimate Rewards. And they might be right. But are those rewards right for you?
When people learn that I get to travel for free with credit card rewards, they often want my help. Usually, they have a destination in mind, and they want to use their reward points to get them there. My first question is always, “Do you have any cards that give you flexible rewards?”
Among these products, the Chase Sapphire Preferred Rewards card from Chase is emerging as a market leader. Not only does this card offer points in Chase’s Ultimate Rewards program, Sapphire Preferred cardholders have exclusive opportunities to earn points, as well as better bonuses than other Chase cards.
- Earn Ultimate Rewards points. Chase’s current sign-up bonus offers 40,000 points after spending $3,000 within three months of opening an account. Cardholders then earn 1 point on most purchases, double points on travel and dining, and triple points for travel booked through the Ultimate Rewards website. Finally, cardholders receive a bonus equal to 7 percent of the points earned each year.
- Spend Ultimate Rewards points. Points are worth 1 cent each toward cash back or gift cards. Redeem your points for travel at the Ultimate Rewards website and get another 20 percent off. But the most valuable rewards come when points are redeemed for airline miles, hotel points, or even Amtrak Guest Rewards.
- Interest rates. The standard APR is 15.24 percent. There’s no zero-percent promotional financing on new purchases or balance transfers at this time.
- Fees. This card has an annual fee of $95 that’s waived the first year. There are no foreign transaction fees for purchases outside the United States.
- Super value from Ultimate Rewards. Although Ultimate Rewards points can only be redeemed for miles on four airlines – United, Southwest, British Airways, and Korean Air – the key to unlocking their value is to leverage their partners. For example, transfer miles to United and redeem awards on any of their 25 Star Alliance airline partners. Transfer them to British Airways and fly on any of their 12 OneWorld partners. And Korean Airlines miles can be used on any of 15 SkyTeam airlines. Throw in four major hotel chains and Amtrak, and there is almost nowhere you can’t go with these points.
- Great bonuses. If you count the annual 7 percent points bonus, this card returns 2.14 points per dollar spent on travel – including airfare, hotels, car rentals, and dining. Triple points for travel booked on the Ultimate Rewards website equals 3.27 points per dollar.
- Nifty card. The actual card you receive is made of some kind of plastic/metal sandwich. When I hand it to cashiers, they tend to be surprised and impressed by its weight and feel.
There could be more transfer partners. The American Express Membership Rewards program offers a dozen airline partners, while their Starwood Preferred Guest card features 30. By contrast, Ultimate Rewards can be transferred to the programs of only four airlines. (Although, as explained above, miles can be transferred to other airlines via airline partnerships.)
- High annual fee. Even though they do waive the cost the first year, $95 is a lot of money for a credit card. The standard Chase Sapphire Card has no annual fee, but lacks many of the bonus point offers and has fewer options to transfer points.
- High interest rates. Like most reward cards, you can expect a higher APR. If you tend to carry a balance, you should be looking for a low-interest-rate credit card.
Get it if: You want to quickly earn flexible points that can be used for premium travel rewards.
Forget it if: You carry a balance and are looking for the lowest interest rate.