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Why The Chase Sapphire Preferred Offer is Really Too Good

Written by Charlie

The current 100,000 point Chase Sapphire Preferred offer is so good that it is ridiculously expensive for Chase. Here is how this is such a good offer.

Currently, there is a fantastic offer for the Chase Sapphire Preferred, undoubtedly a long-time favorite of many. This offer is for 100,000 Ultimate Reward points after spending $4,000 in 3 months. It is the best public offer ever available online and is definitely one people should consider, if they are eligible (see this post to see if you are eligible).

The Chase Sapphire Preferred Offer is Really Too Good

Link: Chase Sapphire Preferred 100,000 Point Offer (this is a personal referral offer that will give me points as well – thanks for the support!)

Edit: If you go into a Chase branch, you can apply with one of their bankers to get the same offer with the $95 annual fee waived the first year and the $50 grocery credit from the previous offer. That equals $145 in more value from the public, online offer!

The Current Value of the Chase Sapphire Preferred Offer

Here are the details on the current Chase Sapphire Preferred offer (and, yes, I do get an affiliate commission if you are approved!):

  • Earn 100,000 points after spending $4,000 in the first 3 months
  • 2x points on dining and travel
  • 25% more in redemption value when redeemed for travel or for Pay Yourself Back in rotating categories
    • Right now, those categories are dining, grocery stores, and home improvement stores
  • Annual fee is $95 and not waived the first year
  • Transfer to travel partners at 1:1 rate
  • Annual fee (not waived) – $95

So, if we add it altogether, the minimum value you can get from this card is $1,205. That is because you will earn a total of 104,000 points after meeting the spending. From that, we value the points at 1.25 cents each since that is what you can redeem them for as Pay Yourself Back or for travel and then we subtract the annual fee of $95.

This Chase Sapphire Preferred Offer is Very Expensive for Chase

Let’s come to the reason why this offer is really too good. It is costing Chase a lot of money! The acquisition cost for them is huge compared to the value they can get back from many customers. Let’s break it down.

  • $1,300 in Ultimate Reward point redemption (base value)
  • $60 in Peloton statement credits
  • Total redemption value for the customer – $1,360

Now, in return, Chase gets:

  • $95 annual fee
  • Around $100 in transaction fees on the minimum spending

Now, thanks to their partnership with Peloton, I would imagine they are getting some kind of discount or similar with those statement credits so it is not a full $60 out of Chase’s pocket. But, if the customer redeems the Ultimate Reward points for grocery purchases, for example, that is a full $1,300 that Chase is paying back to the customer.

But, wait, there is also the affiliate commission that Chase is paying out to affiliates (like this site). The range is different but let’s just say it is between $150 – $300 per approval for the Chase Sapphire Preferred. That is another big item that is out of Chase’s pocket on this card.

So, if a customer spends only the minimum $4,000 and cancels the card after the first year, Chase has lost at least $1,255 on that customer! This offer is really a great one and very expensive to Chase.

Obviously, they are hoping many people sign-up and do not meet the bonus minimum. They are also hoping that people pay interest on this card going forward as that is another 15-25% that they will get. This is where they will get the money back.

This offer is obviously a calculated assessment by Chase that the US economy and travel are rebounding. I could also see them raising the annual fee on this card in the future and/or adding some new benefits to keep the new customers that are applying now. One thing is for sure – Chase needs the Sapphire Preferred to be the primary card in new customers’ wallets and for it to be the basis of a long relationship with Chase.

Great Deal, But…

For now, any person that is eligible to get the Chase Sapphire Preferred stands to get a huge bonus! And Chase is ok with paying out this much right now so definitely take advantage of it! However, you should make sure you do not get sucked in to this offer because it is so good – if you are not able to comfortably meet the spending without overextending. There are plenty of ways to meet the spending, which requires $1,333 per month for 3 months, but you should be cautious to not spend more than you are comfortable with or else Chase is going to start getting that money back from you in a hurry, in the form of interest payments.

Some of the links on Running with Miles are affiliate links that pay a commission if a purchase is made. Running with Miles is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

About the author

Charlie

Charlie has been an avid traveler and runner for many years. He has run in marathons around the world for less than it would cost to travel to the next town - all as a result of collecting and using miles and points. Over the years, he has flown hundreds of thousands of miles and collected millions of miles and points.
Now he uses this experience and knowledge to help others through Running with Miles.

1 Comment

  • You forget that the competition (Amex Platinum, Capital One) is offering similarly high bonuses. Chase has no choice but to match

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