Reader Tip: Chase Sapphire Preferred reduced to 40,000 points (from 50,000) on Chase website

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[I get a referral for the Chase Sapphire Preferred in this post.  Emily and I are always very grateful to the many readers who use our link to apply for a credit card!  Emily has had this card since June 2011.]

Update:  The current best offer for the Chase Sapphire Preferred is for 40,000 points.

Link:  Chase Sapphire Preferred – 50,000 point sign-up bonus

@elleandish tweeted me yesterday (thanks!) with a link to the Chase website where the Chase Sapphire Preferred was offering only 40,000 Ultimate Rewards points after spending $3,000 within 3 months.

Chase_Sapphire_Preferred

Only 40,000 points on Chase Website

I also haven’t yet been asked to remove the banner ad on the blog which still offers 50,000 Ultimate Rewards points, so for now, the 50,000 point offer is still available.  You don’t have to use our link to apply, but Emily and I are always very grateful when you do!

I don’t understand why Chase is offering 40,000 points though their own website, but is paying affiliates a commission to promote a better version of the offer (which is not available on the Chase website)! This doesn’t make any sense, and I wonder how much longer it will last.

I also googled “Chase Sapphire Preferred” and the only paid ad by Chase was for the 40,000 point version.

Chase_Sapphire_Preferred

Chase is advertising only the 40,000 point version

I normally wouldn’t have posted about this except that I still don’t have the Chase Sapphire Preferred card, so I would have hated to see the offer decrease to 40,000 points before I applied for it.  Though, to be fair, a 10,000 point decrease isn’t that bad.  It would be much worse if it decreased to 25,000 points (perish the thought!)

I had also just finished reading an investor presentation which showed just how high Chase’s current marketing expenses for credit cards are when compared to prior years.  And I’m sure the higher marketing costs are driven in part by high sign-on bonuses.

1.  I still haven’t applied for the Chase Sapphire Preferred.  This may surprise some of you, but I still haven’t applied for the Sapphire Preferred!  Emily applied for the card in June last year, and I was going to apply it for just before she cancelled hers.

That way, we’d get the sign-on bonus for both of us, AND we wouldn’t have to pay an annual fee to use the Sapphire Preferred in the 2nd year.  Emily would have the card in year 1, and I’d have the card in year 2.  And hopefully in year 3, Chase would introduce a new variant of the Sapphire Preferred and we’d repeat the cycle!

Chase_Sapphire_Preferred

Emily’s Chase Sapphire Preferred

The Sapphire Preferred is one of those rare cards where it does make sense to actually use the card for regular spending as opposed to just for the sign on bonus.  The double points on travel and dining are a nice bonus, and we like that it doesn’t charge a foreign transaction fee.  And I love having the option to earn valuable United or Hyatt points or even Southwest points now that we have the Southwest Companion Pass.

I have my March App-O-Rama planned for this weekend, and I was planning to apply for the Chase Sapphire Preferred then, so I was a bit concerned when I saw @elleandish‘s tweet.

2.   The Competition.  The American Express Premier Rewards Gold (which competes with the Chase Sapphire Preferred) recently increased their bonus to 25,000 points from 15,000.  To me, that’s a low bonus for an over-rated card, but I found it interesting that American Express didn’t raise the stakes by matching Chase’s 50,000 bonus on the Sapphire Preferred.

Executives from large companies can’t usually get together and decide what incentives to offer or what price to sell their goods because of anti-competition laws.

But they can send signals that they would like to reduce the overall level of sign-up bonuses.

  • Chase recently changed the wording on the advertisements in the affiliate channel to include the words “limited time offer.”
  • American Express increased the sign-on bonus on the Premier Rewards Gold to 25,000 points and not 50,000 points.
  • And now, Chase is testing versions of the Chase Sapphire Preferred with only a 40,000 point sign-up bonus and not a 50,000 point offer.

These could be interpreted as signals that both Chase and American Express want to reduce the high sign-up bonuses which we are used to.

3.  Chase’s Marketing Expenses & Strategy.  Chase recruited Gordon Smith – a 25 year veteran of American Express who used to head American Express’s Card services division – to head Chase’s credit card division.

There’s nothing quite like hiring the head of your closest competitor to gain market share from that competitor.  And by all accounts, Gordon Smith has delivered the goods.  Data below is for “Card Services & Auto” which is how Chase reports financial information for their credit card division.

  • Chase has grown revenue margin at a Compounded Annual Growth Rate (CAGR) of 6.8% vs. 0.4% for American Express from 2008 to 2011
  • Increased “New accounts” by 25% from 2009 to 2011
  • Increased “Sales volume from new accounts” by 98%  between 2009 and 2011
Chase_Sapphire_Preferred

Chase Card Services Peformance

But Chase’s credit card growth has come at the expense of higher marketing expenses than compared to previous years. There’s nothing unusual in spending money to gain market share!

This graph shows just how high Chase’s marketing expenses were in 2011, when compared to 2009.  Also note the decreasing trend in 2012.

Chase_Sapphire_Preferred

Spike in Chase Card Services’ Marketing Expense

I suspect that this increase is likely due to higher advertising, signing up more affiliate marketers like me, and also because of the high sign-on bonuses.

The bad news is that Chase recognizes that marketing expenses have increased – they mention it in investor presentations and also in their SEC filings.

At the very least, we can expect Chase’s senior managers to be aware of the increased marketing expenses and working on plans to bring them down.  That could mean lower advertisements, lower affiliate payouts, and worst of all lower sign-up bonuses.

Bottom Line: 

I don’t have any inside information, but I wouldn’t be surprised if the sign-up bonus is reduced to 40,000 points.  Though I do hope that’s only a temporary decrease.  On the other hand, this could be like the Southwest card where there is still a 50,000 point offer floating around long after the official bonus has reduced to 25,000 points.

I’m not going to say when you should apply for the Chase Sapphire Preferred.  The answer, as always, is when it makes sense for you.  But I know that I’ll probably apply for it in the next few days as I had originally planned.

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39 Responses to Reader Tip: Chase Sapphire Preferred reduced to 40,000 points (from 50,000) on Chase website

  1. Pingback: Chase Sapphire Preferred Bonus Decreases on Chase’s Website (Though 50,000 Point Sign-up Bonus Still Available Elsewhere) - Mommy Points

  2. What’s your app-o-rama going to look like?

  3. Great post! Thanks for the heads up!

  4. I’m pretty sure that 2011 spike in marketing expenses was because of the Chase AARP 5% on everything for 6 months promotion.

  5. Big D, I could be mistaken but the JP Morgan Chase graphic looks like it was pulled from an internal PPT deck. You may want to remove it if you think that is the case.

  6. I see that the Chase Sapphire promo says the bonus is only valid for first time cardmembers with new accounts and that previous cardmembers are not eligible for the bonus. Is that just referring to previous Chase Sapphire Preferred cardmembers or any previous Chase credit card member? I had the Chase Freedom a few years ago, but no longer have it, and I didn’t know if that would make me ineligible for this 50k Sapphire bonus. Thanks – you do a great job with this blog.

  7. @Thomas
    It refers to previous Chase Sapphire Preferred customers only. Previously being a Chase Freedom cardholder, or any other Chase card for that matter, doesn’t affect your ability to receive this bonus.

  8. @Rik - I’m thinking Chase Sapphire Preferred, Chase Hyatt, US Air card for 40K, Virgin Atlantic for 50K and perhaps 1 Citi and 1 AMEX. Do you have any suggestions?

    @Rebekka – Glad you liked it!

    @Steve – I know that the AARP 5% was often discussed on Slick Deals and Fat Wallet, so I wouldn’t be surprised if that was the case!

    @bills – I’ve linked to the deck in the actual post (the link above the bullets in #3). The deck is also publicly available on their Investor Relations website, so I don’t think it is for internal use only. But I do agree that the slide looks it was from an internal PowerPoint deck.

    @Thomas – It is referring to previous Chase Sapphire Preferred card holders, not to existing Chase card holders. Having the Freedom card from a few years ago, shouldn’t make you ineligible for the bonus on the Chase Sapphire Preferred.

  9. D,

    What’s up with all of the pictures of Emily holding credit cards? I can’t explain why, but they’re quite tacky.

  10. @corinne – Thanks for helping out!

    @Dan – Should I hold the cards instead?! I thought it would be fun to have Emily hold up her cards from her last App-O-Rama in the previous post. But thanks for your feedback!

  11. Does it make sense to apply for a lot of cards all at once, or is it better to space it out and do it over a period of time? Thanks for your answer.

  12. CanadianMillionMiler

    test

  13. CanadianMillionMiler

    FWIW, I just checked Chase’s credit card page below and the signup bonus is still 50K for the Chase Sapphire Preferred card:

    I agree with Daraius that Chase appears to be testing the effect on decreasing the signup bonus. However, in the medium/long run, since you can only get the signing bonus once, would it not be better to wait around for a limited time higher signing bonus like say 100K ? Obviously there is no guarantee for this but Amex has been giving limited time higher bonuses like the recent 75K Rewards Gold Business card. I am waiting to see if the Sapphire 100K bonus might be offered for a limited time like the way Chase offer 100K BA miles.

  14. @CanadianMillionMiler
    Chase Sapphire Preferred did have a limited time 100K bonus point sigh-up last year. I believe it was after the BA bonus. It was for a very limited time though and if memory serves me Emily was able to send a secure message to Chase after she got the 50K Sapphire sign up and got a match for the 100k limited offer.

  15. D,

    Come on, you know what I mean, and it wasn’t about you holding the cards instead. Having a picture of all of the cards last time followed by a picture of the Chase SP (we all know about that card right now) just brings some sort of extra attention to the cards themselves that is a bit tacky.

  16. Thanks for the update! I applied for the Chase Sapphire about a month ago and am working on hitting my $3k. Once I do, I’ll need to go back and review your suggestions on how best to maximize the points. I’ve never used a generic award card, only airline and hotel ones.

    Will you let us know how you do your March app-o-rama, please?!

  17. CanadianMillionMiler

    @Corinne – Thanks, in that case I think I’ll wait to see if I can get the 100K offer for the Sapphire Preferred card.

    Cheers!

  18. OK, I pulled the trigger (used your link). Instant approval and a data point: last Chase credit card application was in August 2011 (Southwest), which followed a June 2011 application (Continental). After the August application, I fought with Chase until October to get the card approved (it was eventually approved)… after that, I decided on having 6 months in between my Chase applications… For this iteration, I was holding out for the 100K offer but oh well – if it does come around soon, I’ll ask for a match :)

  19. Pingback: Is the Credit Card Bubble About to Burst? | InACents: Save Money, Travel More

  20. @Mike – It really depends. If you apply for only 3 or 4 cards in a year, I don’t think it matters when you apply (if they are all from the same bank you may want to space them out). But if you apply for a batch of card regularly, you’re better off doing it every 3 or 4 months so that the credit inquiries fall off from your credit report.

    @CanadianMillionMiler – Readers have emailed me links to the 50K offer from the Chase website, so I’m not sure why I got the 40K offer. But nice to know that the 50K offer is still available. It doesn’t hurt to wait if you’d like the 100K offer – the trade off is that you’d (potentially) lose 10K points if the offer goes down to 40K, but would gain 50K points if you snag the 100K offer. Last year, Chase matched (only for a few days) folks who applied for the 50K offer to the 100K offer, because there was a targeted 100K offer floating around.

    @corinne – Thanks for helping out! You’re right – Emily sent a secure message and got matched to the 50K offer.

    @Dan - Thanks for the feedback! I like including Emily in the blog, but will mull over your feedback.

    @KateFromCA – Thanks for using our link! I applied for it as well, but no instant approval. Here’s hoping for a match!

  21. @Anjum – You can transfer points from the Chase Sapphire to a few hotels and airlines (the best options are Hyatt, United, and possibly British Airways for short distance flights). I’ll keep you posted on the March App-O-Rama!

  22. Pingback: Chase to Report Credit Card Benefits as Taxable « Points Envy

  23. As a newbie to this game I am always excited to get a new card with points and don’t see anything tacky about Emily presenting her cards with the same enthusiasm. Thanks for doing what you do.

  24. @dp – Thanks for your feedback!

  25. I just applied for a Chase Sapphire Preferred using the link provided, and was told that the app was pending. I called the reconsideration line, and the guy there said that he couldn’t approve me for the card since I hadn’t had a very long history with them—I just got my first Chase card in my name in February (the Southwest 50k, applied in January…been an auth. user on another card for a long time) . I told him I wanted it since I would be travelling abroad for both work and pleasure quite a bit in the upcoming months, but he said they just didn’t want to give me an extra 5000 in credit before they saw some more history with the current 5000 I had. I asked to reduce the credit on the WN card and transfer half that to the Sapphire, but no dice.

    Should I call again? Should I just follow the rep’s suggestion and wait a few months and apply again?

  26. @Stan – It doesn’t hurt to call a few times and emphasize how your travel pattern has changed. But, you do have a very short history with Chase, so I wouldn’t be surprised if they tell you the same thing again.

  27. I was planning to apply for this card in the nearest future, but decided to apply today. Instant approval! Thanks, Darius! (I used your link, btw)

  28. Hmm, I shall do so. Would it help to let them know that my company has offered to reimburse my expenses but not the forex fee (my boss specifically said to just get a card that doesn’t charge a forex fee)?

    Thanks for all the help, D. Great blog, keep up the good work!

  29. Pingback: 50,000 point Chase Sapphire Preffered | Million Mile Secrets

  30. Sergey – Thanks for using our link. Emily and I really appreciate it!

    @Stan – Any information which you can provide to let them know why you want the card will help!

  31. Pingback: Chase Offer Matching – $300 Freedom, 60,000 Mile United Explorer, 60,000 Mile Continental, 50,000 point Southwest, 70,000 Marriott & 80,000 Priority Club | Million Mile Secrets

  32. Pingback: Chase Sapphire Preferred Removal | Million Mile Secrets

  33. Pingback: 50,000 point chase sapphire preferred | Million Mile Secrets

  34. Pingback: Chase Ink Bold Sign-Up Bonus Reducing to 25,000 Points (from 50,000) for Most Folks? | Million Mile Secrets

  35. Pingback: United Club Card | Million Mile Secrets

  36. FYI, I signed up for the 40,000 offer a few weeks ago and when I called to activate my card I just said “I saw somewhere a 50,000 offer, is there any way to match that and provide the extra 10,000″ the woman put in a request, and said I would find out by a letter. Anyway, I just checked my account there were 10,000 points in there. I called, got someone right away and they said it was because of my request and that the 40,000 is still available on top of it when I meet the 3k threshhold spending. Amazing, all because I asked just on a whim and they gave me an extra 10k points.

  37. @Steve – That’s great. Thanks for sharing!

  38. Pingback: Citi Hilton Reserve | Million Mile Secrets

  39. Pingback: Chase Hyatt Credit Card | Million Mile Secrets

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