Our Two Favorite Travel Credit Cards

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I’d hoped the rumors weren’t true, but Chase is definitely cracking down on applications for their Ultimate Rewards-earning credit cards. These include the Sapphire Preferred, the Sapphire Reserve, the Freedom, and the Freedom Unlimited. The Ink Classic, the Sapphire, and the Ink Bold still exist, but are no longer available to new cardmembers.

Per Million Mile Secrets and plenty of other bloggers, it is highly unlikely Chase will approve a new application for their Chase-branded cards if you’ve opened more than five credit cards (with any bank) in the past 24 months. Simply put, Chase is really throwing a kink in our Ultimate Rewards credit card plans.

Now before you get all riled up about free travel, check out my post on Things to Consider before applying for a new credit card. I would never never never recommend credit cards to those who can’t afford to pay them off immediately. That said, when used for good (free travel) and not for evil (debt), these next two cards are incredibly valuable.

Greg applied for the Chase Freedom in December. I knew there was trouble when we didn’t get a big “Congratulations! You’re been approved!” after I submitted his application, and with our last monthly mail delivery he received a rejection letter due to his having too many accounts. Greg has opened 12 new cards over the past 24 months, so I’m not entirely surprised but very disappointed.

Chase already has a huge corner on the travel credit card market with great products like Hyatt, Marriott, IHG, British Airways, United, and Southwest-branded cards, in addition to the Ultimate Rewards cards, and i’ve heard they limit the number of Chase cards you can have open at any time. I have five open accounts with them right now and have never been denied an application, but I’m sure it’ll come eventually. I’ll always keep my three favorite Chase cards open- Freedom, Sapphire Preferred, and IHG- because they’re too valuable to cancel and reapply later. The other two, the Southwest Plus and Southwest Premier cards I’ll cancel and reapply as I see fit. I only applied for the two of those so I could try to score Southwest’s companion pass this year (if you don’t know what that is, you should- it’s amazing). So why should your next two credit cards be the Chase Freedom and the Chase Sapphire Preferred? Well, how much time you got?

I’ve had the Freedom card for nearly a decade now. There’s no annual fee so it’s easy to keep, it gives me strong history with Chase, and it earns Ultimate Rewards (UM) points. Unfortunately the UM points earned with Freedom aren’t transferable to Chase’s travel partners, but that’s where big brother Sapphire Preferred comes in.

I applied for the Sapphire Preferred back in 2012 and like the rookie I was, canceled it when the annual fee came up. After reading more about the card, and learning about its transfer partners, I applied for and was approved for it again February 2015. Mind you, Chase will not award the sign up bonus if you’ve received it (the sign up bonus, not the card) within the last 24 months. Meaning if you applied for the card in January 2012, but didn’t meet the minimum spend/earn the sign up bonus until April 2012, then you wouldn’t be eligible to receive the bonus again until after April 2014. And that’s why I keep track of all our credit card applications and cancellations on a handy Drive spreadsheet, so I always know when we’re eligible for a sign up bonus again. Your credit score is also a good place to look for past applications if you’re not a spreadsheet kind of person.

So why are Chase’s Ultimate Rewards points so great, anyway? Because there are lots of ways to redeem them:

  • Cash back. 50,000 Ultimate Rewards points = $500.00 statement credit or direct deposit.
  • Gift cards 5,000 Ultimate Rewards points = $50.00 gift card.
  • 20% off travel purchases through Chase. 50,000 Ultimate Rewards points = $625 flight or hotel.
  • Transfer points to ten airline and hotel award programs. 50,000 Ultimate Rewards points = 50,000 points or miles. A standard roundtrip domestic airfare is typically 25,000 miles, so with the Sapphire’s current 50,000 point sign up bonus, that’s worth two roundtrip flights within the lower 48 + Alaska, or one roundtrip to Hawaii, the Caribbean, Central and South America, or Europe. Transferring points to airlines is the only way we’ll ever redeem Ultimate Rewards points, because it offers the best value. Ultimate Rewards points can be transferred to these programs:
    • Aer Lingus
    • Air France/KLM (Sky Team)
    • British Airways (oneworld)
    • Iberia (oneworld)
    • Korean Air (Sky Team)
    • Singapore Airlines (Star Alliance)
    • Southwest Airlines
    • United Airlines (Star Alliance)
    • Virgin Atlantic
    • Hyatt
    • IHG
    • Marriott
    • Ritz-Carlton

I know what you’re thinking: “But Jamie, I don’t live in the UK, South Korea, and/or Singapore. Why would I need any of those airline miles?” Easy, because if you don’t want to fly British, Korean, or Singapore, you can use their miles to fly on their American-based, or ‘domestic’ airline partners instead. Check out my quick post on airline partners and how they can change your travel life forever.

But back to these particular Chase cards and why you should think seriously about applying for them before any other cards:

  1. Chase is limiting applications on Ultimate Rewards cards based on all credit card applications, not just Chase applications. Get ’em while they’re hot, and before you apply for any other cards. You can always get other cards later!
  2. As a pair, the Freedom and the Sapphire Preferred earn 1-5 Ultimate Rewards points per $1 spent.
  3. Ultimate Rewards airline partners cover all three major alliances, plus all of Virgin Atlantic’s partners. You could pretty well fly anywhere in the world on Ultimate Rewards points.
  4. Chase Freedom is offering an increased sign up bonus of 15,000 Ultimate Rewards bonus points after spending $500 in 90 days. The offer is usually 10,000. They also offer 2,500 points for adding an authorized user who uses the card within those 90 days, but we’ll talk more about this in a minute.
  5. Chase Sapphire Preferred is offering 50,000 Ultimate Rewards points after spending $4,000 in 90 days. The usual offer is only 40,000 points, which is what Greg and I signed up for initially (wah wah!). The Sapphire Preferred offers 5,000 bonus points for adding an authorized user who uses the card within those first 90 days.
  6. The Freedom has no annual fee, and the Sapphire Preferred’s $95 annual fee is waived the first year. And you can always call and ask to have an annual fee credited back to you, or for bonus points to keep the card open. In October I called to fake-cancel our Aviator cards “because we didn’t want to pay the annual fees”. The fees were waived on both cards, plus we both received a 5,000 mile bonus offer for spending $1,000 over the next 90 days, plus Greg received an additional bonus of 2 miles/ $1 on groceries and gas in that 90 days. When I called to cancel my Citi American last year they waived the fee for me and offered me a $95 credit if I spent $95 in the next 30 days. I paid our next phone bill, got the credit, and still canceled the card. Credit card companies make money every time you use their product- it never hurts to ask for a little kick-back.
  7. These are two cards the Warckens will never cancel.

 

The Chase Freedom charges 3% for foreign transaction fees so this is not a card I would use in another country. It earns 1x points on all purchases, plus quarterly bonus categories that earn 5x points on purchases up to $1,500. The Ultimate Rewards points earned with this card don’t transfer to Chase’s travel partners, but the points can be combined with Sapphire Preferred points, which do transfer to travel partners. They’re all Ultimate Rewards points, it’s just that Sapphire Preferred’s transfer, and Freedom’s don’t. Remember that.

5% cash back on gas and groceries- amazing!

 

Even if you’re not interested in airline miles and hotel points, the Chase Freedom is still a solid choice for cash back cards. In addition to the 1x everyday spend and 5x bonus categories, sometimes Chase runs point promotions, like last December they ran one for 10x points on all Amazon.com purchases. You must register for these promotions, as well as the bonus category promotions through your account on Chase.com, but they’re nice enough to send reminders when it’s almost time. And as you can see on the calendar, you have nearly the entire quarter to register, and every purchase counts, whether you made it before or after you registered. Greg and I don’t use this card for everyday purchases, but we use it exclusively when there are bonus categories we like, especially gas.

 

The Sapphire Preferred doesn’t charge foreign transaction fees so it’s perfect for trips out of the country. It earns 2x points on travel purchases and at restaurants, and 1x points on all other purchases. Travel purchases include airlines, hotels, timeshares, campgrounds, car rentals, cruises, travel agencies, trains, buses, taxis, limos, ferries, toll bridges and highways, parking lots/garages. If you have this card, all Ultimate Rewards points earned with both this and the Freedom transfer to those ten award programs.

Of the hotels, it looks like Hyatt points are the only ones worth transferring. I could buy 50,000 IHG points for $350, so I wouldn’t waste my Ultimate Rewards points there, even though I would love 50,000 more IHG points. But remember what I say: Throwing away points on a bad deal just because it’s ‘free’ is like spending $50 on a 2 liter of Coke, just because you have a $50 bill in your pocket. Don’t be crazy.

With the current Freedom and Sapphire Preferred sign up bonuses together (65,000), plus the points you’d earn after meeting the minimum spends (4,500+), plus the points for adding an authorized user on each (7,500) you’re already looking at 77,000 Ultimate Rewards points. That’s enough for three roundtrip domestic airfares, three roundtrip airfares between Boston and Dublin, three nights at the Park Hyatt Maldives Hadahaa, or one crazy flight in a Singapore Suite. And that’s just from meeting the minimum spends! Imagine if you used your cards while you were traveling, or at the grocery store, or on gas! Are you sweating yet?!

I always think of these cards as a pair since the Freedom has no annual fee. They will forever be in our wallets, and if award travel is what you’re looking for, they should forever be in yours too.

If we were just starting this credit card game from scratch:

  • Greg and I would apply for the Chase Sapphire Preferred, either on the same day or within 90 days of each other.
  • Neither of us would add the other as an authorized user right away.
  • At least eight days after our Sapphire Preferred applications were approved we would each apply for the Freedom.
  • Only after we had both been approved for both cards would I go back and add each other as an authorized user, first on the Sapphire Preferred accounts, then on the Freedom accounts, just to make sure. That’s so the authorized user won’t show up as a new credit card application, thereby hindering our ability to get another Ultimate Rewards card. You follow? Keep in mind, when you add an authorized user they have to use the card at least once within the first 90 days the credit card is open. That’s why we would apply for the Preferred either on the same day or within 90 days of each other.
  • New addition to the starting over Warcken plan: After the Sapphire Preferred and the Freedom, we’d apply for the Freedom Unlimited to earn 1.5x points on all purchases. So we’d use the Freedom on 5x categories, the Sapphire for 2x travel, and the Freedom Unlimited for everything else. We’re not eligible yet to apply for the Unlimited so we’re taking a break from new applications in 2018.

If it’s the hefty minimum spend of $4,000 in 90 days you’re worried about, check out my post on Minimum Spends and How To Meet Them. When we first started playing this game, from April 2014- November 2014 Greg and I were able to meet $29,500 in minimum spends, and we are notorious cheapskates. I’ve been eating instant oatmeal nearly every day at work since October because I don’t want to spend any extra on groceries. Our entertainment budget comes out of Greg’s plasma donations. We lived out of a minivan for six months for God’s sake. If the Warckens can meet minimum spends, anyone can. Mind you, we don’t go out and spend money we weren’t already going to spend, and we pay our cards off in full every month. Going into debt for the sake of free travel is like putting your child onto the back of a bison for the sake of a good photo. Don’t be crazy.

Check out the Chase Sapphire Preferred and the Chase Freedom today, and start planning your next vacation. Happy award travels!

 

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