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Many of you know that I love the Chase Sapphire Reserve. I even did a video/post comparing the Chase Sapphire Reserve to the Sapphire Preferred. Though are there compelling reasons why a person would opt for the Sapphire Preferred over the Reserve card?
Below are nine reasons why you may want to get the Sapphire Preferred over the Sapphire Reserve:
1. You don’t want to pay a high annual fee:
The $550 annual fee on the Sapphire Reserve can be daunting. While the annual fee is closer to $250 when you factor in the $300 travel credit, it can be difficult to overlook the initial annual fee charge. If you find yourself in this situation, it might be better to get the Sapphire Preferred instead. You can upgrade to the Sapphire Reserve after your first year if you decide that it provides more value.
2. You’re new to the Chase Ultimate Rewards program:
Another common reason why you might get the Sapphire Preferred is that you’re just starting out in the hobby. Like the previous reason, paying a large annual fee can be daunting, especially when you’re unsure whether you’ll stick to the hobby. The Sapphire Preferred is a great starter card to get your feet wet and gain some significant travel benefits and protections. It also earns a large welcome offer that you can easily apply to an upcoming trip.
3. You want the higher welcome offer:
Despite the fact that the Sapphire Reserve is Chase’s premium travel card, it has a lower welcome offer than the Sapphire Preferred. As of October 2019, the Sapphire Preferred earns 60,000 points while the Sapphire Reserve earns 50,000 points. While the difference is 10,000 points, it’s actually worth the same when you compare the Chase Travel Portal redemption rates.
4. You plan to primarily transfer points to travel partners:
The Sapphire Preferred redeems points on the portal at 1.25 cents instead of the 1.5 cents found on the Sapphire Reserve. It’s a slight difference, but it can make a difference if you use the Chase Travel Portal often. On the other hand, if you primarily transfer points over to travel partners like United, Southwest, or Hyatt, then there is no difference in redemption value. Most times, you want to find the highest value possible. This means you’re likely transferring points to a travel partner rather than using the travel portal.
5. You’re concerned about the high approval credit limit requirement:
Even if you have a strong credit score, it can be difficult to get a high credit limit if you don’t have an extensive credit history. Since the Sapphire Reserve is a Visa Infinite product, it requires a minimum $10,000 credit limit for approval. On the other hand, the Sapphire Preferred is a Visa Signature product. This means that the minimum credit line required is $5,000. For a lot of folks, this could be a strong reason to pursue the Sapphire Preferred over the Reserve card, especially if you’re starting out in the hobby.
6. You already have a strong dining out card:
One of the biggest disrupters in the points and miles hobby was the revamp of the American Express Gold card in 2018. The card offers 4X Membership Rewards points per dollar for groceries and dining out. This means that many folks in the hobby have felt torn about which card to use for dining out purchases. I’ve struggled with this myself since I personally prefer Chase Ultimate Rewards points. However, I can’t ignore that the American Express Gold eans more points for the category.
This is where a Sapphire Preferred might be a better option than the Reserve card. If you only plan to use a Sapphire card for its travel category, then you’re likely better off getting the Sapphire Preferred. This is especially the case if you’re only traveling a few times per year and don’t need the extra benefits provided by the Reserve card.
7. Your other cards have overlapping benefits:
Many premium credit cards now offer benefits like lounge access, travel insurance, primary rental car coverage, and no foreign transaction fees. If that’s the case, you might need the extra travel benefits associated with the Reserve card. A perfect example is someone who might be heavily invested in the American Express Membership Rewards program. They might be looking for a card with a travel bonus category that is either a Visa or Mastercard (for better acceptance). In this scenario, it makes more sense to get the Sapphire Preferred over the Reserve card.
8. You want to add authorized users:
I normally don’t recommend that people add authorized users to their accounts. However, there are certain situations where you might want to do it. For example, you might have a young dependent that is early in their credit experience who you want to add to your account. If this is the case, you’ll likely prefer the Sapphire Preferred over the Reserve card. The Sapphire Preferred does not charge a fee to add an authorized user, while the Sapphire Reserve costs $75 per user.
9. You’re looking to maximize household points:
This is the most compelling reason to get a Sapphire Preferred over the Sapphire Reserve. A common scenario during my consultations is someone starting out in the points and miles hobby and looking to build their Chase card portfolio. If they have a spouse that is also interested in getting cards, it’s often worth getting the Sapphire Preferred over the Reserve. Once the person gets the Sapphire Preferred, they have the ability to refer others to apply as well. This means that their spouse will get a welcome offer and they will get points for the referral.
As of October 2019, you can get 15,000 points per Sapphire Preferred referral. However, you can’t refer others to the Sapphire Preferred if you have the Sapphire Reserve. You can’t even refer others to the Reserve card. For many families, this is a lucrative strategy for maximizing welcome offers and referral bonuses.
Getting the Chase Ink Business Preferred instead
If you have the ability to get business cards, it might be worth looking into the Chase Ink Business Preferred instead of the Sapphire Preferred. It qualifies as a premium card, so you’ll get many of the same benefits that you get on the Sapphire Preferred and Reserve card. As of October 2019, it also has an 80,000 points welcome offer. While it’s not my favorite business card (which is the Chase Ink Business Cash), it can serve as your premium Chase card. For those of you that are new to the hobby, you need at least one premium Chase card to get certain features unlocked in the Ultimate Rewards program. This includes the increased travel portal redemption rate and the ability to transfer to travel partners. Without a premium card, your redemption options are limited.
What do you think about Chase Sapphire Preferred? Are there any other reasons for getting the card that I missed on my list?
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