Frequent Miler's latest team challenge, Million Mile Madness, is almost done! The last two weeks Greg, Nick, and Stephen competed to earn 1 Million SAS miles by flying 15 airlines. But who completed the challenge with the most Speed, Affordability, and Style?
Nope, I’m not going to declare that the new Chase Sapphire Reserve card is the best travel rewards card. By many measures, it probably is the single best travel rewards card, but it’s possible to do better. Let me explain…
The Chase Sapphire Reserve card offers 3X Ultimate Rewards points for Travel & Dining. But, Citi’s ThankYou Premier card offers 3X ThankYou points for Travel & Gas, and 2X for Dining & Entertainment. And the Amex Premier Rewards Gold card offers 3X Membership Rewards points for airfare, and 2X points for dining, gas and groceries. Even better, for many, the Amex Everyday Preferred card offers 3X for groceries (up to $6000 per year in spend), 2X for gas and a 50% bonus on all points earned in every billing period in which you use the card 30 or more times. Depending upon your purchase habits, the Amex or Citi cards may offer better point earnings than the Chase Sapphire Reserve card.
The Sapphire Reserve card lets you redeem points for travel for 1.5 cents per point value by booking through Chase. This means that travel and dining purchases effectively earn a 4.5% rebate when rewards are used to purchase travel. That’s excellent. But, for all other purchases (which earn just 1 point per dollar), it means a paltry 1.5% rebate. For those purchases, most would be better off with a no-fee 2% cash back card such as Citi’s Double Cash card.
The BEST travel rewards card
The BEST travel rewards card, in my opinion, is the combination of several Chase cards: Ink Cash (or Ink Plus) + Freedom + Sapphire Reserve + Freedom Unlimited. If that’s too much to handle, the Sapphire Reserve + Freedom Unlimited combination alone is well worth considering.
Combination Earning
Consider the following point earning rates:
- Sapphire Reserve: Earn 3 points per dollar for travel and dining.
- Freedom Unlimited: Earn 1.5 points per dollar for all spend.
- Freedom: Earn 5 points per dollar in rotating categories each quarter. 5X earnings are limited to $1500 spend per quarter.
- Ink Plus Business or Ink Cash Business card: Earn 5 points per dollar for cell phone service, cable TV, internet, and office supply purchases. Earn 2 points per dollar at gas stations. You can also earn 2X for hotels with the Ink Plus or 2X for restaurants with the Ink Cash, but you should use the Sapphire Reserve instead to get 3X for travel and dining purchases.
As you can see above, a person with four Chase Ultimate Rewards cards can earn a minimum of 1.5X on all spend, 3X for travel and dining, and 5X on many other purchases.
Combine points before redeeming
Chase allows cardholders to move points freely from one Ultimate Rewards account to another.
For details, see: Chase point transfer rules made simple [Infographic].
This means that you can move points earned with your Ink or Freedom cards to your Sapphire Reserve account. Then, if you use points to book travel through Chase, you’ll get 1.5 cents per point value from all points.
With this plan, at worst you’ll earn 1.5 points per dollar (using the Freedom Unlimited) and will therefore get a minimum return of 2.25%. That alone is better than a 2% cash back card. And, obviously, returns will be much higher when earning 3X or 5X rewards.
How to keep annual costs low
There’s no way to avoid the fact that the Sapphire Reserve card charges a $450 annual fee. That said, it also offers $300 per year in automatic travel credits. This means that each year in which you use the card to purchase $300 or more in travel, you’ll get $300 in statement credits. For most people looking for travel rewards cards, this will be easy enough to achieve and will effectively lower the final out of pocket cost of the card to $150 per year.
You can get the rest of the credit card category bonuses without any additional annual fees. The Chase Ink Cash, Freedom, and Freedom Unlimited cards have no annual fees.
While $150 per year isn’t cheap, it’s only $55 more than the Sapphire Preferred card. And, I believe that its enhanced earning power, its increased redemption value, and its various other perks (Priority Pass lounge access, National Car Rental Executive status, etc.) are worth far more than $55 per year.
How to get all of those cards
The first goal is to get approved for the Sapphire Reserve card. After all, the card’s 100,000 point signup bonus is worth pursuing even if you don’t plan to keep the card long term. So far, results are mixed as to whether or not Chase is enforcing the 5/24 rule with this new card (with many cards, Chase won’t approve your application if you’ve opened 5 or more cards in the past 24 months). See also: Get approved for the Sapphire Reserve 100K offer despite 5/24.
If you already have the Sapphire Preferred card, you should then consider downgrading it to either the Freedom or Freedom Unlimited card (you could always upgrade it later if you change your mind). If you combine finances with a spouse or significant other, there’s no reason for both of you to have the Freedom Unlimited card — one of you can downgrade to that card and can get an authorized user card for the other. So, if you both have Sapphire Preferred cards, consider having one person downgrade to the Freedom Unlimited, and the other downgrade to a regular Freedom card (for it’s rotating 5X categories).
If you have an Ink Plus card, consider downgrading it to the no-fee Ink Cash card. You’ll get the same 5X categories and will save $95 per year. Keep the Ink Plus card, though, if you have very high 5X spend since the Ink Cash card is limited to $25K in annual 5X spend whereas the Ink Plus is limited to $50K. Or, try to get a second Ink Cash card by signing up with a second business.
In the long run, you and/or your significant other or spouse may be able to get more Ultimate Rewards cards by breaking 5/24 or by flying under 5/24.
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[…] the recent post “The BEST travel rewards card,” I argued without proof that the best travel rewards card was a combination of cards that […]
[…] When Chase introduced their Sapphire Reserve card last summer, I was thrilled with the suite of Ultimate Rewards cards I had cobbled together: Sapphire Reserve for 3X travel and dining; Ink Plus for 5X office supply, cell phone, and internet; two Freedom cards for rotating 5X categories; and the Freedom Unlimited for 1.5X everywhere else. See: The BEST travel rewards card. […]
[…] See also: The BEST travel rewards card. […]
why don’t you mention the bank of america travel rewards with 2.625% on everything? yeah it doesn’t offer all features but no AF.
Is the CSR 1.5x all spend too like the freedom unlimited? i guess it doesn’t matter if you can transfer points from and ink and freedom to reserve for 1.5x right?
It’s definitely a contender, but there are two reasons I didn’t include the BOA Travel Rewards card:
1) The BOA card only offers 2.625% to those who have a very large banking relationship with BOA. My assumption is that most readers don’t qualify.
2) There are no bonus categories. My assumption is that those looking for a single best Travel Rewards card actually travel a lot (and therefore dine out a lot too). This is where the Sapphire Reserve’s 3X rewards are awesome. Plus, at home / within the US, people can leverage the Freedom and Ink Cash 5X categories
No, the CSR only offers 1X for non-bonus spend. Yes, unless you are traveling outside of the country (where you’d pay foreign transaction fees with Freedom or Ink Cash cards), use the Freedom Unlimited for non-bonus spend to get 1.5X then transfer points to the Reserve.
[…] My pick for the single best all-around travel rewards card is the Chase Sapphire Reserve Card. No other single card offers as good of a combination of rewards (3X travel & dining; 1.5 cents per point travel value) and perks (lounge access, primary car rental coverage, etc.). Plus, cardholders can add other cards to their wallet to earn more Ultimate Rewards points with no additional annual fees: Chase Freedom Unlimited (1.5X everywhere); Chase Freedom (rotating 5X categories); Chase Ink Cash (5X office supply purchases, phone, TV, and internet). For more, see: The BEST travel rewards card. […]
Very helpful summary and analysis, Greg. Thanks.
I have a question re: strategy for getting my husband the CSRes. I was pre-approved, applied in branch, and got it although over 5/24. He was not pre-approved and hasn’t applied yet. He is over 5/24. The CSP was his first card when we started in this game – we had a long credit history and many cards but CSP was the first once we began in The so-called Hobby. We downgraded to the free Sapphire version after the first year because we both by then had Ink Bolds. The Sapphire card with its $15K CL has been permanently sock-drawered and the card is used nearly never.
Should he close the Sapphire card before applying for a CSRes? Or PC it to a Freedom Unlimited? Or leave it alone to have access to perhaps moving the CL during a recon for a CSRes? Or will it just come down to 5/24 regardless?
He currently has a small biz checking acct at Chase which sees little action – it was opened a few months ago to get a $500 bonus – but our other Chase savings and checking accts, while joint, are attached to my SSN, which probably explains why I was pre-approved and he wasn’t. We are not interested in CPC but do have a great relationship with a banker who in the past pushed a special and successful recon as if we were CPC.
Any thoughts on how to position him to get a pre-approval would be most welcome! Thanks! Happy weekend!
Anything you do with the old Sapphire card won’t change your husband’s 5/24 status. My recommendation is to change it to either a Freedom Unlimited or Freedom card, whichever you think you’d make better use of.
Short of getting CPC, I unfortunately don’t know of any good ways to increase the odds of pre-approval
Greg, I have the Ink Plus and Chase Freedom if I downgrade the Ink Plus to Ink Cash will I still have ability to transfer points from Chase Freedom to Ink Cash?
Yes, you would still be able to transfer points from Freedom to Ink Cash but I’m not sure why you’d want to. The idea is to transfer points to a card that allows you to get better value from points or to transfer the points to loyalty programs
Greg, I currently use only the Citi-Prestige card because of their American Airlines perks like access to Admirals Lounge & added points value for AA flights. Since they announced dropping (or reducing) these advantages, I’ve been looking for a replacement card and am leaning towards the Citi Executive World Elite card which includes an Admirals Club membership. Do you see any reason I should consider the Chase Reserve card instead? My company travels exclusively on AA and I need to have Admirals Club lounge access.
If you need Admirals Club lounge access then the Citi Executive card is the way to go. In some cases it may make sense to have both cards. Get the Executive card for the club access and get the Chase card for its much better earning and redemption power.
[…] The BEST travel rewards card – Everything you need to know about Chase’s new Sapphire Reserve premium card. […]
I think the effective annual fee is $141 instead of $150, because you will also earn 900 UR points from the $300 travel spending.
Hi Greg – are there any news about the guest policy reg. the Priority Pass attached to The Chase Reseve Card? Are you allowed 2 free guests and the same perk for the AU – just like the Citi Prestige Card?
Thanks
We now know that “travel companions” will be allowed in for free, but we don’t yet have details. For example, we don’t know how many guests will be allowed
@Greg, Am I able to make payment to my wife on plastiq when i receive my card? So when she gets the check, she can deposit it in the bank account to pay my card bill. We live in same address though. The reason I ask is because I don’t want to prepay thousands in mortgage payment at once as we don’t have a lot of money in bank to pay those in 30 days.
Thanks
No they won’t let you do that. Your best bet is probably to find a few new bank accounts to fund: http://www.doctorofcredit.com/does-funding-a-bank-account-with-a-credit-card-count-as-a-purchase-or-cash-advance/
I’d think you do not get points after the $300 statement credit, so one “loses” 9 points ~ $13.5 – thus the annual fee after the statement credits is $163.5
I was planning on signing up for the CSP this month until I heard about this. I closed my last CSP over two years ago. Should I signup for the CSP and then 6-12 months from now, the CSR? It seems that would be easier than CSR, then CSP.
Thanks
You could do that, but we don’t know how long the 100K offer will last. My guess is that it will stay around for a while, but I don’t have any evidence
Where can you check for pro-approval online or it has to be in branch?
Chase has an online option, but it doesn’t seem to work very well. You’re much better off going in-branch