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Updated on Thursday, March 31, 2016
Chase has two very different offers for cash back rewards, both valuable in their own right. Chase Freedom® rewards you for everyday spending and Chase Sapphire Preferred® Card rewards you for spending on travel and dining. Which one should you choose? Here’s what you need to know about each option and why you should consider using both cards.
The Chase Freedom® is a popular cash back credit card. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. Earn a $150 Bonus after spending $500 on purchases in your first 3 months from account opening.
You can redeem cash back for statement credit or make a cash deposit into a checking or savings account. You can also redeem using Chase Ultimate Rewards® for gift cards, travel and more.
Chase Freedom® converts your cash back into points. For the 1% cash back category, you get 1 point per $1. For the 5% cash back category, you get 5 points per $1.
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card offers 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide.
You can read a full Chase Sapphire Preferred® Card review here.
Points are 25% more valuable when you redeem for travel (airfare, car rentals, hotels, cruises, etc.) through Chase Ultimate Rewards®.
If you choose to take a gift card or cash the value of one point is $0.01. If you redeem for travel through Chase Ultimate Rewards® the value is $0.0125 per point.
You’ll also Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. You can earn an extra 5,000 bonus points if you add an authorized user to your account within 3 months of card opening as well.
One huge benefit of the Chase Sapphire Preferred® Card is you can transfer points earned to participating frequent traveler programs and the points will have full value.
Participating travel rewards programs include:
- British Airways Executive Club
- JetBlue TrueBlue
- 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
The annual fee for the card is $95. There’s a $0 foreign transaction fee for the card.
Pros and Cons
Now, it’s time to go over the pros and cons of both cash back programs.
Pro: Bonus categories that cover the basics. The revolving categories include everyday needs so you won’t have to alter your spending habits each quarter to cash in.
Pro: Redeem points your way. You can use through several options to redeem your cash back. You can get cash through statement credit or check. Or you can choose from a bunch of other rewards from Chase Ultimate Rewards®.
Pro: Attainable signing bonus. Earn a $150 Bonus after spending $500 on purchases in your first 3 months from account opening.
Con: Activating the bonus category. You need to activate the bonus every quarter.
Chase Sapphire Preferred® Card
Pro: A break on foreign transaction fees. There’s a $0 foreign transaction fee; perfect for frequent travelers. You’ll also avoid the annual fee for the first year ($95). But, if you travel regularly the savings from foreign transaction fees may justify the cost.
Pro: Increased value for Chase Ultimate Rewards®. You’re able to transfer your points to participating travel rewards programs without sacrificing point value. If you’re a member of a partnering rewards program you can build up points for larger purchases.
Pro: A good sign up deal for avid travelers. The sign on-bonus, Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. This seems pretty high but could be easily attainable for cardholders that hop on flights often or entertain for work.
Con: Limited travel rewards partnerships. The big selling point of the Chase Sapphire Preferred® Card is your ability to transfer points to your other travel rewards programs. If your preferred travel rewards program isn’t on the list of partners you won’t be able to benefit from this perk, unless you sign up for a new program.
Other Cash Back Card Options
The Nusenda CU Platinum Cash Rewards Credit Card also has revolving quarterly categories similar to the Chase Freedom® card. This card gives you 5% cash back in the bonus category and 1% cash back on all other purchases. Aside from the recurring program, you’ll get 2% cash back on purchases outside of the bonus category for the first 90 days.
The 5% categories include:
- January to March – Groceries and gas expenses
- April to June – Home improvement, movies and restaurants
- July to September – Gas and education expenses
- October to December – Restaurants, hotels and airfare
The Citi PremierSM Card has a rewards program comparable to the Chase Sapphire Preferred® Card program except you earn a higher amount of points for travel. The card lets you earn 3X Points on Travel, Including Gas Stations, Earn 2X Points on Dining Out & Entertainment, Earn 1X Points on All Other Purchases.
The annual fee is $95.
Which Card Will Benefit You the Most?
The Chase Freedom® and Chase Sapphire Preferred® Card offers are very different, which presents an opportunity for you earn points with both. If you’re interested in choosing one, the Chase Freedom® makes more sense if you travel sparingly, but spend more in the revolving categories.
Chase Sapphire Preferred® Card is probably not worth the $95 fee ($95) if you’re not going to be maximizing the cash back benefits.
But, if you travel and dine out regularly the Chase Sapphire Preferred® Card should be at the top of your list because you can transfer rewards to other travel programs and stack your points.
The information related to Chase Freedom®, Chase Sapphire Preferred® Card and Citi PremierSM Card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.