Credit Cards

My Open Relationship with the Chase Sapphire Preferred

Written by Dustin

I have been back and forth about keeping or canceling my Chase Sapphire Preferred. I think I have found a card that (temporarily) can make that happen.

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The Chase Sapphire Preferred was my first travel reward credit card I opened. It has a special place in my wallet for that reason and for few years it was worth the fee. Over the last couple of years, I have began to wonder if this card is worth the fee anymore.

When asked about paying annual fees, I always tell people they need to do the math to make sure the benefits outweigh the cost. It’s a pretty simple process when it comes down to it. Are you receiving enough value from the card to justify spending the money the bank requires to hold that card? I think the Sapphire Preferred has moved into the “fee greater than benefit category.”

My Open Relationship with the Chase Sapphire Preferred

For the longest time Ultimate Reward points were my “go to” currency. They are easy to earn and a few years ago bonuses were plentiful. They have some solid transfer partners and for many they are the best currency around.

I have always had a open relationship with my Sapphire Preferred, we were never mutually exclusive. There was even that one time I received a retention offer, and downgraded the card. I eventually had to upgrade my card back to the Sapphire Preferred to utilize the transfer options.

The Sapphire Preferred was my gateway card for better rewards. I had to have Sapphire Preferred or Ink Plus, to utilize those transfer partners we all love to hear about.

Once we move to Bangor, the only partner I utilized was Hyatt. We really enjoy Hyatt, but we have been finding ourselves using Airbnb more. Especially during longer travels, because we can usually pack less and use washing machine at our location.

Since I had plenty of points to use ( for transfer partners), it was worth paying the $95 per year on the Sapphire Preferred. The amount of money we saved on one redemption made the fee worth it. Since we moved and my strategy has changed, I have felt more disconnected to Ultimate Rewards. Not to mention I’m so far over 5/24, I’m not wastingmy time applying for their cards.

Looking at a breaking point on the annual fee, I would need to spend about $7,600 on the Sapphire Preferred to make the $95 fee ($7600*0.0125= $95). I don’t put much spending on my Ultimate Reward earning cards anymore and I have been busy with spending requirements. If I’m not working on spending requirements, then American Express has been my go to card.

The Turning Point

Towards the end of last year, I used the rest of my Ultimate Reward points (sad day, right?). The thought of having a zero balance on those valuable points makes me cringe, but it hasn’t been bad at all. At this very moment I have about 5,600 Ultimate Reward points. In addition, I have no real plans to increase that balance.

I have been on a card opening frenzy which has mainly been focused on American Express, but the other day I was approved for the Merrill Lynch card with a nice 50,000 point bonus.  Over the last few months  I have been aggressive in opening cards, because I feel banks are going to tighten up even more by the end of the year. Before banks restrict bonuses even more, I want to earn as many bonuses as possible..

Sapphire Preferred

I’m not someone who wants to squeeze every last drop of value from points.  I plan my trip and use the form of point that cost the me least amount. I would be perfectly happy cashing this out for $500, if that was the best option. My gut tells me I’ll be able to get around $750-850 from it. That would mean this bonus would give me a return around 25% to 28%, which is great in my eyes.

With my main currency being Membership Reward points and other forms of cash-like currency to pay for my airfare, Ultimate Rewards have lost their shine for me. They are very valuable, but have little value to me.

So with no real plans to increase my Ultimate Reward Balance, low amount of points in my Ultimate Reward Bank, and a $95 fee for a card that doesn’t carry it’s weight anymore. I was looking for an opportunity to cut out an annual fee. This made the Sapphire Preferred expendable if the right opportunity came around.

Once I was approved for the Merrill Lynch card, I felt was the opportunity to cut the $95 fee.

Why the Merrill  Lynch Card?

There were 3 features of the Merrill Lynch card that made the Sapphire Preferred expendable:

  • No annual fee
  • No foreign transaction fees
  • Travel delay insurance

The last 2 bullet points both the Merrill Lynch card and the Sapphire Preferred share. When comparing their travel delay insurance they are slightly different, but the insurance is there. This is a benefit I haven’t had to use in the past, but for some reason it is a benefit I want in the card I use to pay for airfare. It’s more for a peace of mind.

I receive both no foreign transaction fees and travel delay insurance, with no annual fee! The no annual fee was the deciding factor was the fact to cut my Sapphire Preferred from my line up of cards.

I fully understand that the Merrill  Lynch card earns 1x on all purchases and those points aren’t “as valuable” as Ultimate Rewards. In the big picture, the Sapphire Preferred fee has outweighed it’s benefits for me.

I’m fairly certain the Merrill Lynch card will only be a bridge to my next reward card that will benefit me even more. Is it the best travel card on the market? Definitely not, but I am more than happy to shave $95 off my annual fee list.

Conclusion:

Is the Merrill Lynch card that amazing? I would say no, but the bonus is worth quite a bit. Most importantly the bonus is flexible as well. Take into account some of the travel benefits of the card with no annual fee and this card has made it easier for me to downgrade my Sapphire.

In the end, I am saving $95 on a card I find no longer gives me $95 in benefits. Who knows, maybe Chase will add a partner that will benefit me here in Bangor. If they do, I’ll look at upgrading back to a Sapphire Preferred, rekindling my relationship with it.

What cards have you cut out of your wallet? Do you agree with me removing the Sapphire Preferred from my wallet?

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About the author

Dustin

After completing 6 years of pharmacy school, I finally had the time to travel. I started investigating ways to travel for less and when I redeemed my first award flight for my honeymoon, I knew I was hooked! Fast forward a couple of years and places I had never dreamed of visiting like Budapest, Honolulu, Bermuda and many other places where all within my reach, and for little to no money out of my pocket. Now, I have collected well over a million points and miles, and try to help people travel for less on their wallet.

2 Comments

  • Why do you think things will get tighter? AMEX just upped Plat bennies, had the highest-ever SPG Business card bonus, and Chase is currently offering the highest-ever United bonus. On top of that, the recent article indicating that airlines make big profits on selling miles makes me think this is a lucrative business. This is before we even consider the likely significant numbers of people who sign up for cards like these but carry balances and incur other fees.

    • Hey Loose,

      If you don’t mind, I will actually answer this in a post. The response would be quite lengthy, but I will give my full explanation to your question next week.

      Thanks for reading!
      Dustin

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