Categories: Credit Cards

Chase Ultimate Rewards

Posted on Mar 9, 2016 by JakeA
Updated on Sep 1, 2016

- Continued from the credit cards rewards programs section which I recommend you to read first -

Updated Sep 2016 for the Chase Sapphire Reserve

This is the rewards program I initially started with and have been loyal to. These are the cards that are most recommended to people especially if they go all-in on the Ultimate Rewards program due to a large number of transfer partners with transfer rates usually at a 1:1 ratio. If you plan to participate in more than one rewards program, I would suggest starting with Chase due to their 5/24 rule in that Chase will disallow you from applying for their cards if you've signed up for five or more cards in the last 24 months.

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Chase Sapphire Preferred: This is usually the card recommended first for most people as it's 2x points on travel (air fare, buses, taxis, travel agencies, cruises, Uber, etc) and restaurants (including GrubHub and Foodler). No foreign transaction fees also makes it a great travel card. Annual fee is $95 (explanation on break-even spend below).

Chase Sapphire Reserve: Released in August 2016 amid overwhelming anticipation and excitement, even Chase was wholly unprepared for how many people wanted this card with some having even applied a week before the Reserve's official release through a leaked application link that was still under development. What's with all the excitement for a $450 annual fee card? A 100,000 point sign up bonus, a 3x point bonus for travel and dining purchases, priority pass lounge access for the primary member and a guest, primary rental insurance for up to $75,000 (it no longer restricts certain car models unlike the Sapphire Preferred), and a $300 automatically redeemable annual travel credit makes it a no-brainer for people with large travel and dining expenses. The $300 annual travel credit effectively reduces the actual annual fee to $150, so this card also makes sense for holders of the Sapphire Preferred which has a $95 annual fee since they just need to make enough purchases to at least break even with the $55 difference. Considering the Reserve exceeds the Preferred's benefits, I've converted my Sapphire Preferred into a Freedom card after receiving my Sapphire Reserve.

Chase Ink Plus Business Card: This is often the next recommended card to have once you have the Sapphire because this then earns you 5x points per $1 on the first $50,000 you spend in a year in combined purchases at office supply stores and on cell phone/landline, Internet, and cable TV bills. Since most people spend money on these categories (some more than others), this is a no-brainer for most people. If you don't shop often at office supply stores, you can even make your 5x purchases go further by buying gift cards at an office supply store to places you don't get bonus points for. For example, I make a lot of purchases at Amazon so every now and then, I stop by a Staples to buy Amazon gift cards to load into my Amazon account. If you redeem your Chase points even at a very low $0.01 per point, that gives you a 5% discount on all Amazon purchases. Redeeming Chase points for travel through their Ultimate Rewards portal gives you $0.0125 per point which translates to a 6.25% discount on Amazon. Since I try not to redeem Chase points for less than $0.018, I effectively get at least a 9% discount on Amazon purchases. Annual fee is $95 (explanation on break-even spend below).

A note on getting business cards: If you have an established business, then you're set. If you're not instantly approved, you may have to talk to one of their representatives and they'll ask you details about your business. Although some people consider Chase to be less lenient than American Express on issuing business cards to people who don't actually run viable businesses, many people report success on getting this card. I suppose technically, anyone can be a "sole proprietor" who just hasn't made any money yet. If you happen to run a small side business or you're a part-time blogger, try your luck with this card.

Chase Freedom Card: This is billed as a cash back card but you can actually convert your cash back into points if you own a Sapphire Preferred, a Sapphire Reserve, or a Ink Business card. The value in this card is the 5% cash back (5x points in our case) on up to $1,500 in combined purchases for select categories depending on the time of year. For example, you may earn 5% on gas stations from January - March, grocery stores from April - June, restaurants from July - September, or "holiday shopping" from October - December. This is a great card to have in conjunction with the Sapphire Preferred or the Sapphire Reserve just for the 5x category bonus and no annual fee.

Chase Freedom Unlimited Card: This is a popular Chase card for non-bonus spending. It's a no-limit 1.5% cash back card on all purchases. Just like the regular Freedom card, you can convert 1.5% cash back into 1.5 points if you own a Sapphire or Ink card. Why are people excited over a 1.5 point per $1 card? Because if you value and redeem Chase points at $0.02 per point, you effectively get back $0.03 per $1 you spend when you earn 1.5 points per dollar ($0.02 x 1.5 points = $0.03 per $1). That's essentially a 3% discount on your purchases. For reference, redeeming Chase points at $0.0133 per point would make this card comparable to a 2% cash back card (0.02 / 1.5 points = $0.0133). No annual fee.

Annual fee break-even spend

Note that two out of the four of these cards have an annual fee. It's a little harder to calculate your break even point than with a cash back card but if you value a Chase point at $0.02 each, then it's a little easier to figure out. For example, 2 points per $1 in travel or dining purchases with the Chase Sapphire Card translates to $0.04 per $1 so you need to spend $2,375 in dining and travel a year to break even with Sapphire's $95 annual fee ($95 / $0.04). As for the Chase Ink Business Card with its 5 points per $1 bonus category, that works out to $0.10 per $1 so you only need to spend $950 a year in the 5x bonus categories to break even with the Ink's $95 annual fee. Of course, all of this is dependent on the $0.02 per point valuation. Value is relative so you'll need to figure out on your own how much a Chase point is worth to you based on their transfer partners and redemption options. Redeeming Chase points through their Ultimate Rewards travel portal is worth $0.0125 (1.25 cents or 1.5 cents if you have the Reserve) per point so we at least know that the floor is $0.0125 ($0.015 if you have the Reserve) per point but you can often find a better value when transferring to one of Chase's partners. Check out the "Redeeming your points" section below for a recommendation on good transfer partners.

The Shop through Chase portal

You should also look at their Shop through Chase portal for ways to earn points with their partners. For instance, I regularly have wine shipped from wine.com which happens to be a Shop through Chase partner. At 5 points per dollar when I shop on wine.com through the Chase portal, that's effectively a 5%-10% discount on wine purchases I had already been making. They have a slew of merchants available through the portal as varied as West Elm, Nike, Apple, Microsoft, Newegg, and Art.com. Just click on Chase's Shop Now link which leads you to your merchant's regular shopping page but with a Chase tracking cookie in your browser. I recommend going through their list of merchants to see if there are any that you regularly shop at to earn their bonus points. Just make sure that when you click on their referral link, you make your purchase on the same page that it leads you to or risk wiping out the Chase tracking cookie that awards you the bonus points after your purchase. Also, do the math before getting blinded by bonus points. If the product you want to buy is cheaper elsewhere but without bonus points, make sure the bonus points actually covers the price difference or else you're better off just getting it at the cheaper price.

Redeeming your points

The Chase Ultimate Rewards current transfer partners are:

  • British Airways Executive Club
  • Korean Air SKYPASS
  • Singapore Airlines KrisFlyer
  • Southwest Airlines Rapid Rewards®
  • United MileagePlus®
  • Virgin Atlantic Flying Club
  • Hyatt Gold Passport®
  • IHG® Rewards Club
  • Marriott Rewards®
  • The Ritz-Carlton Rewards®

Before we continue, it's important to note that you're guaranteed a 1.25 cents (or 1.5 cents if you have the Sapphire Reserve card) per point value when booking travel on Chase's Ultimate Rewards portal. You can often get better value than this when transferring to one of Chase's partners but you can use $0.0125 (or $0.015 if you have the Reserve) as your baseline to determine whether or not a redemption at a partner is a good deal.

I usually get good value at Hyatt, United, Korean Airlines, and Singapore Airlines (especially on business or first class on their own flights). Make sure you're also considering the use of points on booking with airline alliance partners. For example, transferring Chase points to British Airways for use on their own British Airways flights are not generally considered a good deal but it could potentially be a good value on short haul flights on its Oneworld alliance award partners (I used British Airways Avios miles to fly domestic on JAL while in Japan). You can also find good value transferring your points to Korean Air SKYPASS to either book Korean Air flights or flights operated by their SkyTeam alliance partners. For me, Korean Air is a great Chase point redemption for travel from U.S. (Los Angeles or San Francisco) to Japan (Tokyo or Osaka) since I regularly find redemption values of around $0.035 (3.5 cents per point) for business class fare as long as you don't mind the stopover at Incheon airport. Otherwise, Singapore Air is decent for travel from LAX (Los Angeles) directly to NRT (TokyoNarita airport). On the other hand, although using Chase points on Singapore Airlines tends be a good value for flights they operate themselves, you may have to investigate its value a little more when redeeming flights on their Star Alliance partners (you also have to actually call them to book or upgrade flights with their award partners).

Transferring Chase points to Marriott Rewards is usually a terrible idea if you're only using the points to book on Marriott since Marriott points are valued much lower than Chase points but where it starts to become a great deal is when booking Marriot's RewardPlus Hotel + Air package. For instance, spending 200,000 points at a category 1-5 Marriot can get you 7 nights + 55,000 miles to United airlines. That's better than the 1:1 Chase transfer rate to United due to the 10% bonus that Marriot gives you for the same points! Not only that, the Marriot travel package also opens up 1:1 point transfers to airlines you ordinarily wouldn't have access to with Chase like the valuable Alaska Airlines miles program. I've also found that the value per point on the room itself tends to be at or greater than $0.02 per point which is usually much better than booking a Marriot room outside of this 7 night package. Since Marriot points are generally considered low value because using them to book Marriot stays tends to be at less than $0.01 per point, using them on their 7 nights + miles travel package instantly boosts their value. If you're already a Marriot Rewards member with a substantial amount of points and raring to go on a 7 night getaway somewhere, it's certainly worth checking to see if you'd also like to transfer some Chase points to your account to take advantage of the Marriot transfer partners in this package.

As always, do the math to see if you're getting a good value when redeeming your points.

Which of these cards do I own?

Personally, I own the Chase Sapphire Reserve Card, the Chase Ink Business Card, the Chase Freedom, and the Chase Freedom Unlimited. The Sapphire Preferred is a good card to have barring the Reserve and is the card I used to use most frequently before converting it into the Freedom once I received my Reserve. I regularly spend five figure sums on travel and dining each year so the Reserve card makes sense for me. I also regularly spend five figure sums on the Chase Ink bonus categories each year which makes the Ink card especially rewarding for me at 5x points per $1. Lastly, I use the Chase Freedom Unlimited card for all other spending on categories my other cards don't give bonuses for. The Chase Freedom card is a great card to have because of the rotating 5% categories (might as well get 5x on restaurants instead of the 2x on the Preferred when you can get it) especially when there is no annual fee.