Is there an “ultimate” credit card combo for travel? There just might be with 2 new credit cards that surfaced this year!
It is true – 2016 has been a tough year with many issuers changing up their rules for new cards and getting cards again. But, it is also showing itself to be one of the best years for credit card rewards as well (which is what I mentioned many months ago when these crackdowns started). We have seen new credit cards and some all-time high bonuses on existing cards.
The “Ultimate” Credit Card Combo for Travel Value
The two cards in this credit card combo are actually both issued by Chase but you may only need to apply for one of them! One of them will be great for everyday spending and the other one will be great for the redemption side.
I know there are many people already employing this credit card combo and it is also true that there are some single cards that may give you an equal return on your spending in cash/statement credits. But, if you value flexibility for your travel needs, this credit card combo gives that to you while covering a lot of bases!
The Chase Freedom Unlimited
Unveiled earlier this year, the Chase Freedom Unlimited is a no-fee card that earns 1.5% cash back on every purchase! This 1.5% cash back actually converts to 1.5 Ultimate Reward points per dollar when the points are combined in an account of an Ultimate Reward earning card (see: How to Unlock Your Chase Freedom Points for Full Value).
That is a great earning potential – 1.5 Ultimate Reward points for every dollar you spend! Of course, there are more lucrative category bonuses on other cards (for things like office supply stores and grocery stores) but for a single card to have in your wallet and to use for all (or almost all) of your purchases, you cannot go wrong with the Chase Freedom Unlimited.
Regular Sign-Up Bonus
This card does have a sign-up bonus of $150 cash back (or 15,000 Ultimate Reward points) but you may want to consider changing one of your Chase cards to this card instead of applying. The Chase Sapphire Preferred can be downgraded to it as well as the regular Chase Freedom card can be converted. The reason you may want to convert a card is so that you do not get a new account that could put you over/near the Chase 5/24 rule.
If you upgrade/convert, you will not receive a sign-up bonus but you will get the no-fee card and will earn 1.5 points on every dollar you spend!
Chase Sapphire Reserve
The second card in our credit card combo is the newly released Chase Sapphire Reserve. This card has the fantastic 100,000 Ultimate Reward point bonus and many other fantastic perks (see: The Chase Sapphire Reserve Details). It also comes with excellent new benefit of bumping up the value of your Ultimate Reward points when you redeem them for travel through the Ultimate Reward portal.
Instead of receiving the 1.25 cents per point that the Chase Sapphire Preferred gives you, you will receive 1.5 cents per point when you redeem your points with the Chase Sapphire Reserve card. Yes, you can still transfer your Ultimate Reward points out to UR partners at a rate of 1:1 (the key being the flexibility) but you can now also get a solid 1.5 cents per point value on all booked, paid travel when using your points through the Chase Sapphire Reserve card.
Regular Sign-Up Bonus
This card currently comes with a sign-up bonus of 100,000 Ultimate Reward points which is really great. It also comes with a $450 annual fee that is charged to the first year. But, it also comes with travel credits of $300 per year as well as some other beneficial perks.
It is possible to upgrade your Chase Sapphire Preferred to the Chase Sapphire Reserve card (see: Why You May Want to Upgrade to the Chase Sapphire Reserve) but you will not get the 100,000 point sign-up bonus. Still, you will be able to get this card this way even if you are blocked from getting the card due to the Chase 5/24 limit or any other reason. If you can, it is better to apply, but it is good to know you can upgrade to still get the redemption value.
The “Ultimate” Credit Card Combo Math
So, now let’s put it together. If you have/get both the Chase Freedom Unlimited and the Chase Sapphire Reserve, you will want to use your Chase Freedom Unlimited for all spending but travel and dining (the Chase Sapphire Reserve gives 3 points per dollar in those categories) if you are sticking with a 2 credit card combination.
The 1.5 points per dollar earned with the Chase Freedom Unlimited will be able to be converted to the UR account of the Chase Sapphire Reserve. That will let you either convert them to any of the UR partners (like United, Southwest, Hyatt, and more) or use them for travel through the Ultimate Reward portal at a rate of 1.5 cents per point redemption.
2.25 Cents Per Point
When combined, that means you will be able to receive 2.25 cents per point value on your purchases. If you were to spend $20,000 per year on your Chase Freedom Unlimited, that will convert to $450 in travel bookings when using this credit card combo. That is a really nice redemption value while retaining the flexibility of transferring your points to traditional frequent traveler programs for award redemptions.
What About the Chase Sapphire Preferred?
If you currently have the Chase Sapphire Preferred and neither of these two cards, I would definitely try to apply for the Chase Sapphire Reserve first. If you are unable to get it (for whatever reason), I would then consider upgrading to the Chase Sapphire Reserve (while understanding you will not get the 100K sign-up bonus).
But, if you can get the Chase Sapphire Reserve, I would then downgrade the Chase Sapphire Preferred to the Chase Freedom Unlimited. This is the road we took and we are looking forward to getting some nice value for our spending and redeeming.
The credit card reward world can be a confusing place. It is nice that you can boil many great rewards down to a credit card combo that would allow you to earn at an increased rate over other cards and redeem at an increased rate above other cards – with just two cards.
Yes, you can most certainly gain more value by using other cards in certain categories and buying gift cards from office stores. But if you are looking for a simple, straightforward method of earning and redeeming points for travel at a great redemption value while retaining the ability to transfer to award programs, this “ultimate” credit card combo could be just the thing for you.