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

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

Million Mile SecretsReader Tip: Chase Sapphire Preferred reduced to 40,000 points (from 50,000) on Chase websiteMillion Mile Secrets Team

We devote thousands of hours of research to help you get Big Travel with Small Money. You support us by signing-up for credit cards through partner links which earn us a commission. Here’s our full Advertising Policy.

Update:  This offer is no longer available.  Check our Hot Deals for the latest offers.

@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.

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.

Or like me on Facebook or follow me on Twitter.

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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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.

Author
Million Mile Secrets

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

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!

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)

Author
Million Mile Secrets

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!

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?

Author
Million Mile Secrets

@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.

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.

Author
Million Mile Secrets

@dp – Thanks for your feedback!

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