September 19, 2013
Chase’s Ultimate Rewards program is hands down my favorite loyalty program. Through incredible sign-up bonuses, generous category bonuses, and the often lucrative Ultimate Rewards Mall, it is easy to earn oodles of points quickly. And, with any of Chase’s premium Ultimate Rewards cards (such as the Sapphire Preferred, Ink Plus, and Ink Bold cards), there are many ways to use points. Here are some examples:
- Book any travel for 1.25 cents per point value.
- Transfer points to Southwest Airlines and use points for approximately 1.9 cents per point value (see “More value from Southwest points“)
- Transfer points to United Airlines and book luxury international business or first class trips. For example, a one-way first-class flight from North America to Asia costs only 70,000 miles (when saver awards are available).
- Transfer points to Hyatt and stay at some of the top properties in the world for only 22,000 points per night.
- Transfer to Amtrak and ride their sleeper cards at very reasonable rates (when booked with points).
- Transfer to British Airways and use on BA partner airlines (the one’s where BA doesn’t charge fuel surcharges). Example redemptions include short hop flights on American Airlines for only 4500 points each way; and flights from L.A. to Honolulu for only 25,000 points round trip.
A roundup of cards
The most common Chase cards that earn Ultimate Rewards points are listed below:
- Sapphire®: 2X points dining. No annual fee.
- Sapphire Preferred℠ Card: 2X travel and dining. 3X dining, first Friday of each month. 7% annual dividend (bonus) on all points earned. No foreign transaction fees. $95 annual fee.
- Freedom®: 5X rotating categories up to $1500 spend each quarter. 10% annual bonus on all points earned when cardholder also has a Chase checking account. No annual fee.
- Ink Plus® Business Card: 5X office supplies, cellular/landline/cable (up to $50K spend on 5X categories); 2X gas and hotels. Complimentary LOUNGE CLUBTM Airport Lounge Access (first two visits per year are free). No foreign transaction fees. $95 annual fee.
- Ink Bold® Business Card: 5X office supplies, cellular/landline/cable (up to $50K spend on 5X categories); 2X gas and hotels. Complimentary LOUNGE CLUBTM Airport Lounge Access (first two visits per year are free). No foreign transaction fees. $95 annual fee.
- Ink Cash® Business Card: 5X office supplies, cellular/landline/cable (up to $25K spend on 5X categories); 2X gas and restaurants. No annual fee.
- Ink Classic® Business Card: 5X office supplies, cellular/landline/cable (up to $25K spend on 5X categories); 2X gas and hotels. Two free LOUNGE CLUBTM Airport Lounge visits first year of card membership. No annual fee.
All of the above cards are excellent options in their own right and each is at least slightly different than the others. The question I intend to answer here is how to get (almost) all of the benefits with the lowest annual fees…
All of the perks with fewer fees
Without regard for sign-up bonuses, I think that the following collection of cards would give a family the most perks for the least cost:
- Sapphire Preferred℠ Card: Pay the $95 per year for this one since it is the only card that offers 2X (2 points per dollar) on all travel spend. You only need to pay for one card per family, though. Give your significant other their own authorized user card from your account for no additional fee. Use the Sapphire Preferred cards for all dining and travel expenses (2X) and for international use.
- Ink Cash or Ink Classic (or both): By signing up for the no annual fee Ink Cash or Ink Classic card you can earn the same 5X and 2X bonuses available through the Ink Plus and Ink Bold cards, but without the annual fee. If you need more than $25K of spend within the 5X categories, then get both of these free cards. Use these cards to get 5X for all office supply purchases, cell phone and landline charges, and cable charges (internet and TV). And, use these cards to get 2X at gas stations.
- Freedom: Get a separate account for each adult member of your household. That way, you can spend more than $1500 per quarter on its rotating 5X categories (if you want to). Open a Chase checking account, too, to get the 10% annual bonus on all points earned. Also, when logging into the Ultimate Rewards Mall, always pick the Freedom card account to log into. That way, all bonus point earnings will be inflated by 10% at the end of the year thanks to the Freedom’s 10% annual bonus!
The above collection of cards will give you almost all of the possible Ultimate Rewards perks for a minimal annual cost. To get the most out of your points, with this configuration, transfer points from your Freedom and Ink accounts to your Sapphire Preferred account so that you can then use points in the valuable ways outlined above.
If you use your cards regularly for business purposes, there might be an argument to be made to keep the Ink Plus or Ink Bold. With my plan, above, you would miss out on the following:
- Ink Plus / Ink Bold primary rental car insurance in the U.S. when car is rented for business purposes.
- Ink Plus / Ink Bold 2 free Lounge Club visits per year.
- Ink Plus / Ink Bold 5X and 2X earnings internationally. Both cards have no foreign transaction fees, but the Ink Cash and Ink Classic cards do charge foreign transaction fees.
A fictional example
Imagine a couple named Jack and Jill. After learning to avoid the hazards inherent in going up hills to fetch pails of water, they create a successful pail fetching service and they sign up for a few credit cards. Let’s now assume that they get the combination of cards shown above and they spend as follows (this is completely made up):
- Restaurants and travel: $500 per month. With the Sapphire Preferred 2X earnings and 7% annual dividend, they would earn 12,840 points per year.
- Office supplies, cell phone service, cable, and internet: $500 per month. With the Ink cards’ 5X earnings, they would earn 30,000 points per year.
- Gas: $400 per month. With the Ink cards’ 2X earnings, they would earn 9,600 points per year.
- Feedom 5X categories: $3000 per quarter ($1500 per Freedom card). With the Freedom card’s 5X earnings and 10% annual bonus, they would earn 66,000 points per year.
- Ultimate Rewards Mall: Let’s say they earn 2000 bonus points per month and always log into their Freedom account when shopping. With the Freedom card’s 10% annual bonus, they would earn 26,400 points per year.
- Miscellaneous 1X spend: Perhaps Jack and Jill have about $500 per month in spend outside of the categories listed above. In that case, they should use their Freedom cards so as to earn the 10% annual bonus. In total, they would earn 6,600 points per year.
In total, without counting sign-up bonuses, Jack and Jill could earn 151,440 Ultimate Rewards points each year. That’s a nice haul!
This post is not about maximizing sign-up bonus points. There is no question that the Ink Plus and Ink Bold card bonuses are among the best available across all banks. So, it still makes sense to sign up for these cards to get the bonus and the first year free. Then, you have a year to assess whether the cards are right for you. If not, you can always sign up for the no fee Ink cards instead.
Converting from current state
Let’s say you already have a mix of Ultimate Rewards cards that does not match the mix shown above, but you want to move to this configuration. One option is to simply sign up for each card that you want, and cancel each card you no longer want. Another option, in some cases, is to call to downgrade from one card to another. For example, if you and your spouse each have your own Sapphire Preferred card, it is trivially easy to call and downgrade one of them to the Freedom card. Similarly, one could downgrade the Ink Plus to one of the no annual fee Ink cards. Unfortunately, the Ink Bold cannot be downgraded because it is a charge card (which must be paid in full each month) whereas other cards in this roundup are credit cards.
The advantage of applying anew is to get the signup bonuses. The advantage of calling to downgrade cards is that you can keep your prior account number and do not incur a hard inquiry on your credit report. It really depends on your own situation as to which is better.
With the mix of cards I outlined above, I purposely ignored the fact that you may do better in some categories of spend with other non-Ultimate Rewards cards. For example, there are cards with better earnings at gas stations, grocery stores, etc. For some great examples, please see “Best Category Bonuses.” And, there are cards that do better than 1.1X for non-category spend. Please see “Best rewards for everyday spend.” So, one could certainly do better than the mix of cards I outlined above, but I think that what I presented is an excellent strategy for anyone who wants to focus primarily on earning Ultimate Rewards points.
Related posts and links
- Best credit card offers
- Best Category Bonuses
- Best rewards for everyday spend
- The single best credit card and why my favorite cards didn’t make the list
- How to sign up for Chase Ink cards