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

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

Million Mile SecretsNo More 7% Dividend on Points, but Primary Rental Coverage With Chase Sapphire PreferredMillion Mile Secrets Team

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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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Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards

More Info

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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…

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?

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.

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.

Author
Million Mile Secrets

@YL – You should get 2 points for using the CSP and the additional portal bonus.

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

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