If you want to maximize your points and miles through everyday spending, you’re going to need credit cards that earn more than 1 point per dollar spent. While this is possible with fixed-value travel credit cards like Barclaycard Arrival Plus and Capital One Venture, which each earn 2 points per dollar, you have to remember that not all points are created equal.
I personally focus on earning points with Chase Ultimate Rewards. Chase Ultimate Rewards points are worth $0.01 for non-travel redemptions such as spending 50,000 points for a $500 gift card. However, the value of these points lies in the ability to redeem them for travel. Points go farther thanks to one-to-one transfers with hotel and airline transfer partners and the fact that points are worth up to 1.5 cents apiece when used to book travel directly through Chase (details on this to follow). Here’s my strategy for which cards get the most value from everyday spending.
Chase Ultimate Rewards Card Overview
There are four personal and two business cards that earn Chase Ultimate Rewards points. All are subject to the 5/24 rule. Points from Chase Freedom (personal), Chase Freedom Unlimited (personal), and Chase Ink Cash (business) can be redeemed for 1 cent each. When booking travel through Chase, Chase Sapphire Preferred (personal) and Chase Ink Plus (personal) are worth 1.25 cents apiece. Points are most valuable with Chase Sapphire Reserve (personal) at 1.5 cents each.
You must have a Chase Sapphire Preferred, Chase Sapphire Reserve, or Ink Plus card in order to transfer points to Chase’s travel partners. Points from Freedom, Freedom Unlimited, and Ink Cash can be transferred to your Sapphire Preferred, Sapphire Reserve, or Ink Plus account and then transferred to travel partners. It’s a good idea to transfer these points from Freedom, Freedom Unlimited, or Ink Cash either way because you will get a better value when redeeming them for travel through Chase.
I also recommend signing up for both Chase Sapphire Preferred and Reserve if you haven’t received these bonuses in the past 24 months and you are still under five cards in 24 months. You can transfer your Chase Sapphire Preferred bonus to the Reserve account for an easy 150,000 points. This is worth $2,250 when redeemed for travel through Chase! Just make sure to close or downgrade one of the cards to avoid paying two annual fees.
The same logic for transferring points applies to business cards. To ensure that you get the best value for your points, transfer points from business cards like Ink Cash to Chase Sapphire Reserve. And don’t write off the option of opening a business card just yet. You may be eligible for a small business credit card without even realizing it!
Chase Sapphire Reserve
With its 100,000 point sign-up bonus after spending $4,000 in the first three months, the Chase Sapphire Reserve is one of the most popular travel credit cards. Benefits include 3x points on travel and restaurants, $300 yearly travel credit, and a 1.5 times increase in value when booking travel through Chase (e.g., 100,000 points is worth $1500). Though it has a hefty $450 annual fee, the $300 travel credit more than covers this fee for the first year since you can get the credit in 2016 and again in 2017 before the annual fee posts for a second time. After the first year, your spending will cover the fee if you spend $3333 on travel and restaurants each year (more on deciding if you can justify the fee here).
Chase Sapphire Preferred
Chase Sapphire Preferred used to be the most popular card for earning Chase Ultimate Rewards points before Chase Sapphire Reserve came along. This is still a great card and might be a better option for some. This card offers 2x points on travel and restaurants, and points are worth 1.25 cents each when booking travel through Chase. You also get a 50,000 point sign-up bonus after spending $4,000 in the first three months. The $95 annual fee is waived the first year.
Chase Freedom is advertised as a cash back card with a $150 bonus after spending $500 in the first three months. This is essentially the same as earning 15,000 Ultimate Rewards points. While you can redeem these points for travel through Chase with this card alone, points are only worth 1 cent each. You also can’t transfer directly to travel partners like United or Hyatt. Instead, transfer to Chase Sapphire Preferred, Chase Sapphire Reserve, or Ink Plus and then transfer to outside partners.
The main benefit of this card is the rotating quarterly categories that earn 5x points on the first $1500 in purchases. The categories for October-December 2016 are drugstores, wholesale stores, and department stores. Just make sure to activate this feature when you sign in to your Chase account. By maxing out these categories, you can get an additional 7,500 Chase Ultimate Rewards points per quarter. That’s 30,000 a year–enough for a one-way economy ticket to Europe on Chase’s partner, United.
Aside from bonus categories, all other purchases earn 1x points.
Chase Freedom Unlimited
Like Chase Freedom, Chase Freedom Unlimited is a no annual fee cash back card with a $150 bonus after spending $500 in the first three months. There are no rotating bonus categories. Instead, all purchases with Chase Freedom Unlimited earn 1.5 points per dollar spent.
In order to use these points with transfer partners, you will need to first transfer to another Chase Ultimate Rewards card (Sapphire Preferred, Sapphire Reserve, or Ink Plus).
Chase’s 5/24 rule applies to Chase Freedom and Freedom Unlimited. Some people avoid applying for these cards since Chase has other options with better sign-up bonuses that could count toward your five cards. However, it’s possible to downgrade an existing Chase card such as Sapphire Preferred to these cards instead of canceling.
Chase Ink Plus
Update 1/31/2017: Chase Ink Plus is no longer available.
Chase Ink Plus is a very popular card among points and miles collectors. This card boasts a 60,000 point sign-up bonus after spending $5,000 in the first three months. Points are worth 1.25 cents each when redeemed for travel through Chase’s portal.
This card earns 5x points on the first $50,000 spent on purchases at office supply stores and on cell phone, landline, internet, and cable TV services. It also earns 2x points on the first $50,000 in purchases at gas stations and hotel accommodations (booked directly with the hotel) and 1x points on everything else. Chase Ink Plus has a $95 annual fee.
Chase is launching a new product, Chase Ink Preferred, and Chase Ink Plus will not be available once this product goes live. Ink Preferred has already been spotted in Chase branches. While it’s unknown when Ink Preferred will launch officially, we do know the following:
- It will have a sign-up bonus of 80,000 points after spending $5,000 in the first three months
- Travel, shipping, advertising, and internet, cable, and phone service purchases will earn 3x points on the first $150,000 spent in these categories annually
- Ink Preferred will have a $95 annual fee that is waived if you apply in person at a Chase branch
- Points will still be worth 1.25x when redeemed through Chase’s travel portal
Update 1/8/2017: You can now apply for Chase Ink Preferred here.
Chase Ink Cash
Chase Ink Cash is kind of like the business equivalent of Freedom or Freedom Unlimited. This no annual fee card is advertised as a cash back card, but your redemption options become more flexible if you transfer to Sapphire Preferred, Sapphire Reserve, or Ink Plus. The sign-up bonus is $300 (or 30,000 points) after spending $3,000 in the first three months.
This card earns 5x points on the first $25,000 spent on purchases at office supply stores and on cell phone, landline, internet, and cable TV services. It also earns 2x points on the first $25,000 in purchases at gas stations and restaurants and 1x points on everything else.
Chase Ultimate Rewards Credit Card Summary
|Card||Type||Annual Fee||Sign-up Bonus||Bonus Categories||Value on Chase Portal|
|Chase Sapphire Reserve||Personal||$450||50,000 points after spending $4,000 in the first 3 months||3x on dining and travel, 1x on everything else||1.5 cents|
|Chase Sapphire Preferred||Personal||$95, waived first year||50,000 points after spending $4,000 in the first 3 months||2x on dining and travel, 1x on everything else||1.25 cents|
|Chase Freedom||Personal||$0||15,000 points after spending $500 in the first 3 months||5x on quarterly categories such as drugstores and wholesale stores up to $1500 per quarter, 1x on everything else||1 cent|
|Chase Freedom Unlimited||Personal||$0||15,000 points after spending $500 in the first 3 months||1.5x on everything||1 cent|
|Chase Ink Preferred||Business||$95||80,000 points after spending $5,000 in the first 3 months||3x on the first $150,000 spent per year on travel, shipping, advertising, and internet, cable and phone service, 1x on everything else||1.25 cents|
|Chase Ink Cash||Business||$0||30,000 points after spending $3,000 in the first 3 months|| 5x on the first $25,000 spent per year on at office supply stores and on cell phone, landline, internet and cable TV services, 2x points on the first $25,000 spent per year at gas stations and dining, 1x on everything else||1 cent|
As you can see above, there are lots of opportunities to earn more than one Chase Ultimate Reward point per dollar spent. Right now I have Chase Sapphire Preferred, Chase Sapphire Reserve, and Chase Freedom. My plan is to downgrade Sapphire Preferred to Freedom Unlimited. With these three cards, I will earn 5x points on rotating categories such as drugstores and department stores (Freedom), 3x on dining and travel (Chase Sapphire Reserve), and 1.5x on everything else (Freedom Unlimited).
Eventually, I may consider adding an Ink card to increase the points I earn on boring but expensive things like my phone and cable bills. If Ink Plus is no longer available, I think I’d be more inclined to use Ink Cash since there is no fee. It also offers 5x on office supply stores which is a category I’m more likely to spend in (compared to what is offered with Ink Preferred).
Overall Tips and Tricks
- Have a mix of Chase cards with varying bonus categories to maximize your earnings. It doesn’t matter if you are spending on multiple cards because you can easily pool your points into one of your accounts.
- Always transfer points to your card that has the best redemption rate. If you have Chase Sapphire Reserve, this will give you the best value.
- Make sure to keep either Chase Sapphire Preferred, Sapphire Reserve, or Ink Plus at all times. You will need one of these to be able to transfer points from the no annual fee cards (Freedom, Freedom Unlimited, and Ink Cash) to external travel partners.
- Never close or downgrade a card that still has points in the account. Make sure to transfer them to another card or an external partner first.
Want more? Check out Chase Ultimate Rewards: Everything You Need to Know.