The new Chase Freedom benefits are making me take the Sapphire Preferred out of my wallet
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The card that’s been in my wallet the longest will live in a sock drawer in two weeks.
After six wonderful years, I’m putting to pasture one of my biggest workhorse credit cards, the Chase Sapphire Preferred® Card. I’m going to miss the fella; it’s been the triple crown thoroughbred of my wallet since the beginning of my miles and points journey. Don’t get me wrong, I’m not making glue out of it — the card still serves a vital purpose in my miles and points strategy — but it’ll be lucky to see a dime of my spending in the near future.
The reason? The Chase Freedom credit cards are getting an upgrade so good that it would be careless to use my Chase Sapphire Preferred for anything other than for a few types of purchases.
Chase Freedom cards are the new best cards for spending
The math is easy. The upcoming Chase Freedom Flex and Chase Freedom Unlimited® cards are getting a boost in spending on travel (through the Chase Travel Portal), restaurants, and drug stores. The Freedom Flex is also becoming a World Elite Mastercard, which means it’ll receive World Elite card benefits (cell phone protection, ShopRunner, Lyft credit, and more). The Chase Sapphire Preferred can’t compete in a few of these categories.
Looking strictly at earning rates, here’s a table comparing the no-annual-fee Chase Freedom cards and the Chase Sapphire Preferred. The Freedom Flex card launches on Sept. 14 and the new earning rates for the Freedom Unlimited begin Sept. 13.
|Earning rate||Chase Freedom cards||Chase Sapphire Preferred|
|Restaurants||3% cash back (3x points)||2x points|
|Airfare (through the Chase Portal)||5% cash back (5x points)||2x points|
|Hotels (through the Chase Portal)||5% cash back (5x points)||2x points|
|Rental cars (through the Chase Portal)||5% cash back (5x points)||2x points|
|General travel (Rideshares, transit, etc.)||1% or 1.5%* (1x or 1.5x)||2x points|
|Drugstores||3% cash back (3x points)||1x points|
|Grocery stores||5% cash back (5x) on up to $12,000 in the first year of cardmembership (excluding Target & Walmart)||1x points|
|Rotating bonus categories||5% cash back (5x points) on up to $1,500 in purchases per quarter**||N/A|
|Everything else||1% or 1.5%* (1x or 1.5x)||1x points|
* The Chase Freedom Flex will earn 1% cash back (1x points) on all non-bonus category purchases while the Freedom Unlimited will earn 1.5% cash back (1.5x points) on non-bonus category purchases.
** The Chase Freedom Flex will have rotating bonus categories that change every three months. It will earn 5% back (5 Chase Ultimate Rewards points) on up to $1,500 in eligible purchases per quarter, which will also handily beat the Chase Sapphire Preferred. You’ll have to activate the bonus each quarter. Past rotating categories have included purchases made through Paypal, gas stations, Amazon and more.
So why keep the Chase Sapphire Preferred?
1) Two specific purchases
While Freedom cards are the king of earning points, they simply cannot compete with the Chase Sapphire Preferred in terms of travel benefits and perks. Yes, the Chase Freedom earns more than my Sapphire Preferred in almost every conceivable scenario. But I’ll still blow the dust off my Sapphire for two reasons: Airfare and rental cars.
- If my checked bags are delayed for six hours or more, I’ll receive up to $100 per day (for up to five days). I’ve received $500 from this benefit in one trip
- If my trip is delayed for 12 hours or more, or if my delay requires an overnight stay, I can receive up to $500 back per ticket. Chase has paid for my hotel and food multiple times
- If I damage my rental car, Chase will cover the expense. I don’t even have to tell my insurance provider about it. This means I don’t have to buy the expensive in-house insurance from the rental agency (often $15+ per day). This particular benefit has saved me over $2,500 over the years
The only “catch” is that you have to pay for your airfare and rental car with your Chase Sapphire Preferred. It’s worth losing out on a couple of points per dollar to know that I’ve got the might of Chase travel insurance behind me.
2) Chase transfer partners and the Chase Travel Portal
As long as I still have my Chase Sapphire Preferred, I can turn the rewards I earn with my Chase Freedom cards into Chase Ultimate Rewards points — one of MMS’ favorite points currencies. We estimate the average Chase points value is 1.7 cents each. That means earning 3x points at restaurants is like earning 5.1% back.
See, once I pool my points from my Freedom cards to my Sapphire, I can:
- Use them to “buy” travel at 1.25 cents each (for example, 10,000 points are worth $125 in travel)
- Convert them into airline miles and hotel points with valuable Chase transfer partners
This second option is the real power of Chase points. You can get 2+ cents worth from your points, depending on how you use them. For example, I transferred 90,000 Chase points to Hyatt for three nights at the Andaz Maui. The stay would have otherwise cost $2,000, so I received a value of 2.2 cents per point. Or, you could fly from the West Coast of the U.S. to Japan in ANA business class for as little as 90,000 Virgin Atlantic Miles round-trip (Virgin Atlantic is Chase transfer partner). That ticket can easily cost $4,000 or more, giving you 4.4 cents worth per point.
Chase Freedom cards are better than high-annual-fee cards
There are a handful of high-annual fee credit cards to compare with the Chase Freedom line, but let’s choose one.
I know several miles and points enthusiasts that continue to pay the $495 annual fee on their Citi Prestige® Card, largely because it comes with 5 Citi ThankYou points per dollar on both airfare and dining. This is insane.
Yes, the card comes with a couple of other benefits, like Priority Pass Select lounge access (available on less expensive cards), and two fourth-night-free credits annually (which are less helpful than they sound). The best benefit of the card is its annual $250 statement credit towards travel. That effectively lowers the annual fee to $245.
The absurdity of paying $245 per year for the privilege of earning 5 points per dollar is accentuated by the new Chase Freedom card benefits. Again, for no annual fee, you’ll earn:
- 5% back (5 Chase points per dollar) on airfare when booked through the Chase Travel Portal
- 3% back (3 Chase points per dollar) on dining
The Chase Travel Portal usually prices flights no higher than anyone else, so that category is a wash. But it’s true that the Citi Prestige gets earns two more points per dollar on dining. So is it the better card?
Remember, you’re paying $245 more per year for this card. That means you’d have to spend $12,250 on dining each year to negate the $245 annual fee and overtake the no annual fee Chase Freedom cards. That’s a LOT of spending that could otherwise go on other credit cards to meet minimum spending requirements.
In other words, if you don’t spend at least $12,250 annually on dining, you’ll do better by using a Chase Freedom card.
- Both Citi ThankYou and Chase Ultimate Rewards points can be worth up to 1.25 cents each through their respective travel portals, but you’ll also need to hold another $95 annual fee credit card to achieve this (Citi Premier® Card for ThankYou points, Chase Sapphire Preferred® Card for Chase points). ThankYou points will be worth a flat 1 cent through the portal after April 10, 2021
- The Citi Prestige can transfer points directly to transfer partners. Chase Freedom cards cannot — you’ll need an annual fee card to do that, like the $95 Chase Sapphire Preferred® Card. This post assumes you already have that card, because everyone should have that card. The Chase Sapphire Preferred is probably the best first credit card to should open.
In short, a no annual fee Chase Freedom is more valuable to most than a $495 annual fee card. Think about that.
The information for the Citi Prestige has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
The Chase Sapphire Preferred will actually serve me better in a dark drawer. I’ll instead use my powerhouse Chase Ultimate Rewards earning cards, the Chase Freedom Flex and the Chase Freedom Unlimited. And as long as I don’t cancel my Sapphire Preferred, I can transfer those points to Chase transfer partners for potentially thousands of dollars in savings in travel each year.
I’ll only use my Chase Sapphire Preferred when I need travel insurance.
Let me know if you’re pursuing a similar strategy with the new Freedom cards. And subscribe to our newsletter for more credit card strategies and travel tips like this delivered to your inbox once per day.
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