No More 7% Dividend on Points, but Primary Rental Coverage With Chase Sapphire Preferred

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From today, when you apply for the Chase Sapphire Preferred card you will no longer get a 7% dividend on the points you earn each year.

And if you already have the card, this benefit is ending after 2015.  So after you’ve completed your spending for 2015, you’ll get your final 7% dividend in early 2016.

But the Chase Sapphire Preferred is also improving 2 of its benefits.

No More 7 Dividend On Points But Primary Rental Coverage With Chase Sapphire Preferred

2015 Will Be the Last Year You Can Cash in Your 7% Dividend on Chase Ultimate Rewards Points Earned With Your Chase Sapphire Preferred Card. And New Cardholders Won’t Get This Benefit.

I’ll give you a suggestion to get a 10% dividend on your Chase Ultimate Rewards points instead of the 7% that’s being phased out with the Chase Sapphire Preferred card.

The End of the 7% Dividend, the Start of Enhanced Travel Benefits

Link:   Chase Sapphire Preferred

I’m not happy that 2015 will be my last chance to earn an extra 7% on all the Chase Ultimate Rewards points I’ve earned with the Chase Sapphire Preferred card for the year.  But card benefits come and go so it’s up to us to adapt to find the best new deal.

So while new applicants to the Chase Sapphire Preferred will not get the 7% dividend and current cardholders will see this perk expire at the end of 2015, there are 2 new benefits being added today.  These may not quite make up for losing the 7% dividend, but they are better than nothing!

Note: Chase is rolling out these changes over the next 2 weeks so if you call or visit a branch, folks might not be up-to-date just yet.  So please be polite and patient.

Primary Coverage for Auto Rental Collision Damage

When you pay for your rental car with the Chase Sapphire Preferred card, Auto Rental Collision Damage Waiver coverage will now be primary when before it was only secondary.  (Secondary coverage means that if you have your own personal or business vehicle insurance, you would have to file a claim with your insurance company first.)

Remember, primary rental car coverage with a credit card only pays for damages to your rental car, NOT damage to the other car, property, or injuries.  And liability for personal injuries could cost millions of dollars.

So don’t rely on your credit card’s rental car insurance if you’re not comfortable with the risks.  The primary coverage with the Chase Sapphire Preferred card is intended to protect you only against theft and collision damage to your rental car.

I’ve written more about using your credit card for rental car insurance and the difference between primary and secondary rental car coverage.

Trip Cancellation & Interruption Coverage Doubles

Trip Cancellation & Interruption Insurance coverage is increasing to a maximum of $10,000 up from the previous $5,000.

So in certain circumstances such as severe weather or sickness, you can be reimbursed for your pre-paid, non-refundable travel expenses such as airline tickets, hotels, and tours.

Chase is notifying cardholders of these changes from now through September.

“I’m Really Going to Miss My 7% Dividend! What Should I Do Now?”

Link:   Chase Freedom

When you have a Chase checking account, you get a 10% bonus on all the Chase Ultimate Rewards points you earn each year with the Chase Freedom card.

I already have both so I’m effectively earning at least 1.1 Chase Ultimate Rewards points on each $1 I spend on the Chase Freedom card.  And I earn 5X points when I use my Freedom card on the bonus categories each quarter.

This quarter’s bonus categories are gas stations and Kohl’s where I plan to buy gift cards to other stores and restaurants.

You can open a Chase checking account online or in a Chase branch.  You could search for a promotional coupon on eBay.

The updates to the Chase Sapphire Preferred card won’t change how I use it until 2016.

But for folks applying now or in the future, if you’re focused on earning Chase Ultimate Rewards points, you may want to use your Chase Sapphire Preferred card for

  • Restaurants to get 2X points.  But use the Freedom when it has a 5X restaurant quarterly category bonus. 
  • Travel purchases such as airline tickets, hotels, cruises, rental cars, taxis, etc. because you get 2X points
  • Purchases outside of the US because there’s no foreign transaction fee

And use the Chase Freedom card for your other purchases because you’ll get a 10% year-end bonus on all the points you’ve earned with the card when you have a Chase bank account.

Then when you want to move your points to partner airlines or hotel programs, transfer your Freedom points to the Chase Sapphire Preferred.

Bottom Line

New applicants to the Chase Sapphire Preferred card will NOT get a 7% dividend on all the points they earn with the card each year.  Current cardholders will lose this perk after 2015.

But the Chase Sapphire Preferred has doubled its Trip Cancellation and Interruption Insurance coverage to a maximum of $10,000 and Auto Rental Collision Damage Waiver coverage is now primary instead of secondary.

As an alternative to the 7% dividend that’s being phased out, you might consider opening a Chase checking account to get a 10% bonus on all the Chase Ultimate Rewards points you earn each year with the Chase Freedom card.

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36 responses to “No More 7% Dividend on Points, but Primary Rental Coverage With Chase Sapphire Preferred

  1. If you open a Chase checking account, make sure you use a coupon code. You can easily find $200-$300 in bonuses that way as well.

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  3. If I’m an AU on my wife’s Freedom card and I open a Chase checking in my name, will we get the 10% bonus or does her name have to be on account?

  4. Does anyone know the “covered” severe weather terms. I called Chase and they send you to their carrier whom state you have to send an e-mail to the underwriters, including the first 6 digits of your card number, in order to get an e-mail back with an answer. Living on the east coast, I’d like to know what the trip interruption benefit will do despite of the increase.

  5. Can points from my husbands chase freedom card be transferred to my saphire account?

  6. Well, I tried to check into a Chase Checking account, however, the zip code I live at is outside Chase’s service area for checking accounts so they don’t offer it. Strange, as I have 3 different Chase CCs!

  7. Gonna dump CSP when the AF hits for a different card…hate when companies water down cards.

  8. Does the Chase Freedom 10% bonus apply to points from the Ultimate Rewards Mall, or is it just on purchases?

  9. Hmm. My wife and I have a joint Chase checking account and she has a Freedom card but it doesn’t look like we are earning that 10% bonus. I guess I need to send them a secure message.

  10. Is the primary rental car coverage effective immediately?

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  12. @Thomas-I thought the feature ended a while ago as well; I remember receiving a notice and confirming with Chase. Am I losing my mind??

  13. @Emily – they also used to also give a flat 10 points per transaction, or something like that.

  14. Is the Auto Rental Collision Damage Waiver coverage the same as the one offered by Chase Explorer Card?

    I get the Chase Explorer card because of this benefit. I may just cancel it if it is the same new coverage from the Sapphire Card.

  15. Is the new primary rental car coverage the same as the Auto CDW coverage from the Chase Explorer credit card?

  16. First, thank you for all your research–it’s been so helpful! I see that you wrote that you’ll be purchasing gift cards from Kohls and I’m curious if they sell gift card for other stores or restaurants.

    Thanks in advance!

    Amy

  17. The 7% isn’t a huge deal for me. Even earning 100,000 points a year, that’s only 7,000 lost (starting in 2016). Even without the 7% the CSP plus freedom (and possibly ink or bold) is powerful. I don’t think the primary coverage or increased insurance replace the 7%, but it is nice to have those benefits.

  18. Chase freedom can own 10% extra with chase checking account, this sounds a good deal. Is this something new? I have chase freedom and chase checking and saving already, do I still qualify?

    thanks

  19. Does the primary car rental insurance start today even if my card is 2 years old? Or does that only apply to new applications?

  20. If I closed the chase sapphire preffered visa card a year ago and received the sign up bonus, could I sign up and get the bonus again?

  21. Does the primary coverage covers loss of use? If any one knows please?

  22. This is a great new perk. Quick question on the rental car primary insurance: first would it apply to current chase sapphire preferred cardholders? Second, if I have used the fairmont card to book a car rental, can I subsequently use the chase sapphire preferred at the time of reservation and still get primary insurance coverage? Or do I need to stick with fairmont in order to be covered?

  23. Thanks for the news about Chase Sapphire Preferred now to cover primary on auto rentals. For me, this is HUGE good news. I trust too there’s no distinction between personal and business purpose for the car rental.

    I got burned badly last year with a rental and used the Chase SW business card. My trip DID include a business purpose, but it also had a personal angle. I was honest about that, and the whole thing got scrambled.

    Apart from that, I was mad that I was even being charged by National Car Rental for damage that I contend didn’t happen when I had the car. I had returned the car just before midnight…. inspected it carefully and all was fine. But then returned it to a small airport, one man operation….. and they did not check it that night. But they DID 15 hours later, and claimed there was an undercarriage dent…… grrrrr….. I couldn’t “prove” it didn’t happen on my time with the vehicle…..

    Two lessons: NEVER, EVER return a car to a rental agency without someone actually inspecting it when you return it. and second, yes, it really DOES help to have a card with primary coverage.

  24. Applied for the CSP on 7/19 and the welcome email I just received does still reference the 7% dividend

  25. @david, I also applied for CSP on 7/19 but app was placed into review. Called on Mon 7/21 to resolve and was approved then (verbiage used by the rep: “application was finalized today (7/21)). Received welcome email today Wed 7/23, and it also references the 7% dividend. I hope it’s true!

    I’ve been trying to get an answer on this and haven’t yet succeeded, so any advice would be most welcome: Being new to the points game, between my wife and I we are planning to compile this portfolio – CSP, Chase British Airways Visa, Chase Ink Plus, Citi AA Advantage and Chase UA MileagePlus. Is it possible to earn Ultimate Rewards Points AND BA Avios/AA miles/United miles simultaneously by making purchases with these cards on the UR portal? Or are UR points earned on the portal only if you use a UR Chase card?

  26. Wow, I applied and was instantly approved for Chase Sapphire Preferred on July 20. Received Welcome email on 7/22 with NO reference to 7% dividend. Looks like I’m out of luck, but I’ll give them a call tomorrow.

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  28. Daraius,

    If I’ve had the Chase Sapphire Preferred for over a year, has the new primary insurance perk kicked in yet? I’m renting a car over the next week and want to be sure. Thanks.

    • @Annie – You sure do!

      @Dave – New cards are also eligible.

      @ Paul – It does cover existing users and the card you use when you pay is what counts.

      @ havai – It covers personal use as well!

      @ Ben – It should be active!

  29. My sapphire is not offer a primary one. it’s visa signature. But My UA does, it’s not visa signature

  30. What if I purchase accommodations via UR? E.g. hotels.com now offer extra 5pts, if I use CSP, do I earn these 5 extra pts on top of the travel bonus already offered by CSP, which makes it to 7 pts total, or just 5pts like I use Freedom to make the same purchase on UR? If it’s the same, given that Freedom+checking offers 10% bonus, it should be meaningless to make any purchase on UR using CSP.

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  32. I hate to tell you, but they’re also discontinuing the 10% Freedom bonus for having a checking account… so they’re all going away.

  33. I noticed Chase is going to stop offering the 10% annual bonus through Freedom if you have a checking account with them. What other offers do you think Chase Freedom will offer in its place?

  34. I have a question that I hope someone will answer. I’m moving to Spain for a few months, and will be renting a car every once in a while for weekend trips and such. Spain has required liability coverage that is included in all rental cars: “Required Coverage: Fire and third party liability insurance is mandatory and is included in all rentals. Third party liability coverage is unlimited in Spain in case of damage or injury to people or property outside of the rental car.”

    Would this, plus my chase sapphire preferred card cover me? It sounds like CSP offers everything but liability, which is covered by the car rental companies in Spain. Anyone know if this is right? Seems too good to be true…