The Great Chase Sapphire Preferred Debate of 2015

The line in the sand has been drawn. Cue the dramatic squirrel.

And the warriors.

On one side you have Julian (aka Devil’s Advocate), a regular contributor to Travel Codex and Frequent Miler’s blog, and beside him is Drew from Travel is Free.

On the other side stands the proverbial Megatron of the miles and points world, Gary from View from the Wing.

The argument: is the Chase Sapphire Preferred card worth keeping for the annual fee?

Devil’s Advocate claims that the Ultimate Rewards program isn’t what it used to be and argues that it’s not even the best card for earning travel and dining bonuses. Drew is a little more feisty and flat-out claims that the card has little to no annual benefit.

Gary, on the other hand, claims his Sapphire Preferred is a wallet stalwart. He argues that many users can realize value by keeping the card and paying the $95 annual fee, reaping the benefits of 2x points on travel and dining (and even 3x once per month), primary car rental collision coverage, and no foreign transaction fees,

It seems like both sides have made their peace and have agreed to disagree.

But until this point, both sides have focused on what you lose if you don’t have the card and what you gain from keeping the card and paying the annual fee. But that’s not the complete story. The focus should be on not only what you gain by keeping the card, and what you lose by ditching it, but also what you lose by keeping it .

I can’t really add anything to the debate of why it’s good to keep the card or good to cancel it. It’s all been said by the three awesome bloggers I mentioned earlier.

So, what do you lose by keeping the card? Let’s start with the facts and end with my opinions, and leave it to each individual to decide for themselves what the best scenario is for their Sapphire strategy.

Fact: You can apply for Chase credit cards and earn the sign-up bonus once every 24 months.

Fact: You can have multiple Chase cards at a time (I have 5 currently).

Fact: The Chase Sapphire Preferred sign-up bonus has been at least 40,000 for several years.

Opinion: Chase cards are really valuable. In fact, I think overall they have the strongest portfolio of rewards-earning cards and sign-up bonuses of any issuer.

Opinion: The Chase Sapphire preferred is a strong enough card with a strong enough sign-up bonus that I recommend applying for the card once every two years at a minimum.

Opinion: I don’t foresee the Chase Sapphire Preferred card going away, or the sign-up bonus dipping below it’s current value.

Taking the facts and my opinions together, there’s really only one year out of every two years that I’m ever without the Sapphire Preferred card. By keeping the Chase Sapphire Preferred for this additional year, I would miss out on the 40,000 point sign-up bonus almost guaranteed to me at the end of the 24 month period .

I don’t feel like dealing with complex valuations so let’s just say the sign-up bonus is worth $800. To realize the value of this card, you’d have to find incremental benefits of not only $95, but of the additional $800 I’d forego by not grabbing the sign-up bonus every two years, perpetually.

Some people may be able find that value in the primary insurance coverage on personal rental cars. Those people should consider keeping this card.

To realize the benefit from the travel and dining bonus alone (assuming you couldn’t find a card that earned more than one point per dollar on Travel and Dining during the year you’d theoretically be without the CSP, of which there are plenty), you’d have to spend more than about $45,000 per year on travel and dining to justify missing out on the 40,000 Ultimate Rewards points plus recoupment of the $95 annual fee paid. Some people can do that. I can’t.

Some people can do a combination of realizing the CSP’s value through a combination of the category bonuses and rental car coverage. I, and I’d imagine most casual travelers/churners, can’t.

Why else you might consider keeping the Chase Sapphire Preferred:

  • You want to keep your Ultimate Rewards points active: You don’t want to liquidate the points and can’t/don’t want to get a business card (Ink).
  • Additionally, if you can’t or don’t want an Ink card, the card can be worth considering just to pair up with the awesome Freedom card, which has the potential to earn up to 24,000 bonus Ultimate Rewards points per year.
  • Although the quality of bonuses isn’t what it used to be, access to the Ultimate Rewards Mall is still a great perk.

The CSP is a great card. I’ll sing its praises all day for it’s hefty sign-up bonus, and being able to use it’s great benefits for 12 out of 24 months. But, as someone who has access to an Ink card during those other 12 months, and as a modest spender on dining and travel, cancelling the card to avoid the annual fee makes the most sense for my situation.

What’s your Sapphire Strategy?

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3 comments for “ The Great Chase Sapphire Preferred Debate of 2015

  1. April 14, 2015 at 8:23 pm

    Getting Chase bonuses again is dependent on when you last received the bonus, not when it was closed. I could receive the bonus wait 24 months, cancel, apply immediately and get bonus again. So it really shouldn’t factor into your decision.

    • April 14, 2015 at 9:36 pm

      Good point – I play it safer with Chase, moreso than others, so I always cancel earlier than necessary. I tend to use the “my travel habits have changed” when calling reconsideration, which doesn’t really fly when they see you just had the card last month.

  2. April 14, 2015 at 11:33 pm

    And remember I did say that the value proposition for keeping Sapphire Preferred changes if you have Ink…

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