Chase Sapphire vs. Chase Sapphire Preferred

August 5, 2011 7 Comments »
Chase Sapphire vs. Chase Sapphire Preferred

These days it’s pretty common to see two versions of a certain credit card. The “preferred” version and the “classic” version.

And perhaps one of the most popular credit cards doing the premium and standard version is the Chase Sapphire card.

While it’s great to have options, knowing what each card offers can be a bit daunting, especially with all that tiny fine print to comb through.

So today we’ll look at how the Chase Sapphire and Chase Sapphire Preferred stack up against one another, and help you decide which one you should choose based on your unique financial profile.

Chase Sapphire (for Average Joes)

The “regular” Chase Sapphire card comes with most of the bells and whistles you’ll find with the Chase Preferred card, minus a few bonus incentives.

You still get 2 points for every dollar spent on dining, and 1 point for every dollar spent on all other purchases.  But you only earn 2X points for airfare and hotel accommodations when booked through Chase’s Ultimate Rewards website.

However, points never expire and there’s no limit to how many you can earn. There are also no blackout dates or restrictions.  Points can be redeemed for travel, gift cards, standard merchandise, and cash back.

And when you call Chase via their dedicated phone line, there is no waiting – a representative will answer straight away.

Finally, you can also earn 10,000 bonus points when you make just $500 in purchases during the first three months from account opening.  That’s good for $100 in cash back or travel.

Chase Sapphire advantage: There’s no annual fee!

Chase Sapphire Preferred (for the Big Boys)

All that sounded pretty good, right? So what about the Chase Sapphire Preferred card? What makes it so “preferred” anyways?

Well, aside from everything offered via the standard Chase Sapphire card, you also get a number of other benefits.

Perhaps the biggest draw is the 50,000 40,000 bonus points, which you can earn after spending $3,000 in the first three months from account opening.

Note that at the moment they only offer a 40k point signup bonus, but it would not surprise me if that offer is bumped back up to 50k in the near future.

cash back

That 40,000 points is redeemable for $400 cash back or $500 in airfare. Why $500?

Well, another benefit of the Chase Sapphire Preferred card is that you get 20% off travel when points are redeemed via Chase Ultimate Rewards. So those 40,000 points would really be worth 50,000 points in that case.

On top of that, you also earn 2 points for every dollar spent on travel (and 3x points when you book airfare and hotel accommodations via the Chase Ultimate Rewards portal. By the way, ridesharing companies like Uber and Lyft are considered “travel” to Chase, so you can earn double points when using Sapphire Preferred to pay for Uber, Lyft, Sidecar, etc.

You also get a 1:1 point transfer, meaning 1,000 Chase Ultimate Rewards points equal 1,000 partner miles/points with frequent flyer programs such as British Airways Executive Club, Virgin Atlantic Flying Club, Korean Air SKYPASS, Southwest Airlines Rapid Rewards, and United MileagePlus, just to name a few.

This is where you can really squeeze a lot of value out of those points, assuming you can book a business class or first class ticket to Europe or Asia.

Additionally, the Preferred version comes with a 7% annual points dividend on points earned on purchases, even on points already redeemed, meaning your points are worth that much more.

Finally, you don’t pay foreign transaction fees when you use the Chase Sapphire Preferred outside of the United States, and the Preferred version has an embedded chip for global acceptance, unlike the standard Sapphire.

The downside: You must pay a $95 annual fee with the Chase Sapphire Preferred, though it’s waived for the first year.

So which one should you go with?

Well, if you’re a big traveler, the Chase Sapphire Preferred card makes a lot of sense because your points are effectively worth 25% more, you avoid costly foreign transaction fees, and the chip and signature system means your card will actually be accepted outside the United States.

The ability to transfer points to frequent flyer programs at a 1:1 ratio is also HUGE if you have specific plans to travel somewhere.

Additionally, you get that 7% annual points dividend.  You’d have to spend about $143,000 a year on the Preferred version to earn around 10,000 dividend points, enough to offset that annual fee entirely.

Although, if the Sapphire Preferred card were used primarily for travel, you could offset the annual fee that way as well.

There’s also the $400 cash back bonus to consider – that’s quadruple the initial bonus on the standard Sapphire card, meaning you’d come out ahead even after paying the annual fee for a couple years.

And because the annual fee is waived the first year, you could effectively apply for the Preferred version and cancel before the fee is ever charged.

But if you don’t spend too much, perhaps just a thousand or so a month, the standard Sapphire card is a solid choice as well.

You won’t have to worry about the annual fee, but you still get to take advantage of 2x points on dining, the Ultimate Rewards program bonus for travel, and that $100 initial cash back bonus if you meet the spending requirement!

Lastly, both versions of Chase Sapphire offer 3x points on dining at restaurants on “First Fridays” throughout 2014.  So if you pay with either version of Chase Sapphire on June 6, July 4, August 1, September 5, October 3, November 7, December 5, you get 3x points on dining!

For the record, the credit card APR is the same on both versions of Sapphire, as are all fees and penalty rates.  Take a look at the condensed list of benefits of each card below:

Chase Sapphire Benefits

  • 10,000 bonus points after spending $500 in first 3 months
  • 2,500 more bonus points if you add an authorized user and they make a purchase in first 3 months
  • 2x points on dining and point per dollar on all other purchases
  • 2x points on travel booked via Chase Ultimate Rewards portal
  • No annual fee

Chase Sapphire Preferred Benefits

  • 40,000 bonus points after spending $3,000 in first 3 months
  • 5,000 more bonus points if you add an authorized user and they make a purchase in first 3 months
  • 2x points on dining and travel purchases
  • 3x points on travel booked via Chase Ultimate Rewards portal
  • 1:1 point transfer to leading frequent flyer and hotel rewards programs
  • No foreign transaction fees
  • 7% annual points dividend
  • 20% off travel when points redeemed via Chase Ultimate Rewards
  • $95 annual fee waived first year

As you can see, there are a lot more benefits to going with the Preferred version, though if you don’t actually spend a lot of money, you won’t realize those benefits.

Still, with the annual fee waived the first year, I’d opt for the Preferred version because you can get so many more points so much quicker (and use them much more effectively).

Check out some other standard vs. preferred versions of credit cards, including the Amex EveryDay Credit Card and Blue Cash Everyday Card.

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7 Comments

  1. Sheldon February 19, 2014 at 4:48 pm -

    Sounds like a no-brainer to go with the Chase Sapphire Preferred and get the $400 cash back. Then cancel the card before they charge the $95 fee. Even with the fee, you’d be good for a year or two.

  2. Vik February 21, 2014 at 8:29 pm -

    Go with the preferred version and cancel after a year if you don’t want to pay the fee. That huge bonus is worth the credit ding.

  3. Stefanie February 23, 2014 at 12:55 am -

    Other than the initial bonus, I don’t see the point of paying for the preferred version of this card. Unless you spend a ton of money each year, which I do not.

  4. Rhea March 4, 2014 at 10:52 am -

    yeah but that initial bonus is huge and you can cancel before they charge you the fee.

  5. Sheryl June 27, 2014 at 7:44 am -

    It’s easy to meet the spending requirement and get the bonus with the preferred version. do some digging and you’ll see.

  6. Dewey June 29, 2014 at 2:19 pm -

    Only the preferred version of Sapphire allows you to transfer points through Ultimate Rewards. That’s the main distinction!

  7. K.D. July 23, 2014 at 1:11 pm -

    I don’t think Chase Sapphire offers that 7% points dividend any longer. It might be grandfathered in for existing cardholders but also phased out in a year or two.

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