Posted by Chuck on April 21, 2015
Credit Cards

Published on April 21st, 2015 | by Chuck

47

Thoughts on Keeping the Chase Sapphire Card

There’s been some talk recently in the blogosphere over the acclaimed Sapphire Preferred card from Chase and whether it’s worth keeping or just getting it for its great signup bonus of 40,000 points + 5,000, and then relegating it to the sock drawer.

Julian and Drew value the card only for its first year and its signup bonus, while Gary still loves the card. I just wanted to put down a couple of quick thoughts.

Card Usage

The real question here is how you use credit cards. We constantly write about credit cards and how you can maximize your benefits from them. That being said, most normal people in the world aren’t constantly opening and closing credit cards. Your average American may apply for a new card every couple of years. Maybe they’ll see an offer in a store to get 10% off that day’s purchase, perhaps a bottle of soda caught their eye, or maybe they’ll decide to change to a new card which suits their needs better. It’s not something constantly on the mind of the cardholder when to cancel one card and sign up for a new one.

I’d classify most people as Keepers of credit cards, versus the few of us who are Gamers of credit cards.

Keepers

A Keeper doesn’t have to be someone who will actually keep the card for years at a time; maybe when the annual fee becomes due they shake their head and say, ‘I’m closing this one’. The point is that when they sign up for a card they’re looking at it for its long-term value. When looking at credit cards from a Keepers perspective a signup bonus is just a push to get that card.

Looking at the Sapphire card: For someone who travels a lot the no-foreign-transaction-fee is a must, and the 2x points on travel and dining could really make the card more valuable than the Arrival.

Certainly we can debate how the Sapphire matches up with the Arrival and the Citi Premier (or Prestige). It would really depend on the consumer – what their main spend is and what kind of travel they do. But as a baseline, having one of these 3 cards would be the go-to options for any frequent traveler.

Gamers

Coming from a Gamers perspective, we need to evaluate the fact that the 45,000-point signup bonus can be had every 24 months or so. And that you can constantly rotate your Ultimate Reward-earning credit cards so as to never pay an annual fee.

Coming from that perspective, it probably wouldn’t have made sense to keep the Sapphire card going back a year either, despite certain redemption options which were better then. It would be hard to justify losing 45,000 points every ~2 years, when you could easily earn UR points with the INK card, or even earn with the Freedom card and wait until you have the Sapphire to redeem them.

For that matter, even if the Sapphire card didn’t have any annual fee it still wouldn’t make sense to keep the card, since as a Gamer it would be worth it to cancel so that you can apply again later. You would only keep it until the 24-month mark and no longer.

The reason we don’t hear much of canceling the Freedom in order to reapply is since the signup bonus is lackluster, plus it has nice quarterly category bonuses year round.

Final Thoughts

To be clear, I would categorize myself with the Gamers and I’ll be canceling my Sapphire unless I’m offered some nice retention offer. I’m sure many of our readers are in the same boat as me. But it’s hard to make that the end word on the value of the card.

In the final analysis, I consider the Sapphire a solid card for an ordinary credit card user. If someone (a traveler) would ask you advice on which single credit card to get, this would certainly be one of the possibilities that goes through your head.

Speaking of which…what would you advise someone if they asked you which single credit card they should get and keep (let’s assume it’s someone who travels internationally)? Let us know in the comments.



47 Responses to Thoughts on Keeping the Chase Sapphire Card

  1. Dustin says:

    I have this dilemma right now. But I’ll need to keep it for the fact Ill probably need to transfer to Hyatt later this year.

    With SW devaluing and United being Delta jr, I am starting to think the Arrival might be a better option. Chip + PIN and 2.2x on every dollar spent. Easy to redeem your mile plus no FTF.

    Even the fee free arrival earns 2.2x on travel and dining and no FTF. Not a bad option after year 1.

    • Chuck Sithe says:

      Yeah, it’s also easier to be able to book everything on you own terms and just get a statement credit, without having to deal with specific airlines, hotels, etc.

  2. Bill S says:

    i’ve been thinking about going the gamer route and dropping the CSP myself. If I drop the card can I transfer Fredom points earned to my wife’s CSP unto I get the card again?

  3. cheapblackdad says:

    My wife has the CSP, and I have the Freedom. I transfer points from my Freedom to her CSP account in order to get them to airlines. So if you are playing in “two player mode” one of you can keep the CSP, and the other can cancel.

    I personally think it’s wise to show some commitment to each issuer vs. just being a pure “gamer”. We’ve kept my wife’s CSP, I kept the Marriott card, and I use the Freedom ongoing. I’ve gotten thousands of dollars in travel, so I try to pay the occasional annual fee, downgrade, or have it waived.

  4. Ben says:

    What is the 24month rule with Chase? 24 months from sign-up? From bonus posting? What if I keep the card for 23 months, then cancel. Can I get a new CSP a month later?

  5. Lantean says:

    well, i am a gamer but even if i were not, CSP is the most overrated card out there. my guess is Chase is a paying a huge commission to bloggers so they keep pushing it.

  6. calwatch says:

    I would go with Fidelity AMEX despite the 1% foreign transaction fee unless overseas charges were a significant percentage of all charges. With the 2% cash back, the cash back rate outside of the US is effectively 1%. And there’s no annual fee.

  7. XP1 says:

    Doesn’t Chase ban you if it finds out that you are churning under the new terms?

    • Lantean says:

      i was once banned for about two years (it was about 5 years ago) but then the ban lifted.
      now i keep a lot of money with Chase so i guess they don’t mind that i churn.
      plus, you can always close cards via SM if you’re uncomfortable on the phone that way there is less confrontation and they are much less likely to ban you. 😉

    • Chuck Sithe says:

      There is such a language in the terms, but it would depend on your churning velocity. Also, category abuse is a factor there as well.

  8. Paul says:

    Your fundamental analysis is the same as mine.

    I opened my CSP and Freedom on the same day in 2014.

    They both have the same number of Ultimate Rewards points right now. And my CSP was spotted a 35K lead in sign up bonus. Even if your personal situation has the CSP at 2x your Freedom, factor in the fact that you’ll be grabbing another CSP 2 years from now. There’s really no logical argument within the main consumer bell curve for paying the CSP annual fee and permanent retention. In fact, your “downgrade” option of another Chase Freedom may be equal or better.

    Bottom line: this card is heavily incentivized for affiliate bloggers and they’re not only going to push the CSP for sign up bonuses but argue for its subsequent retention since any mention of churn will jeopardize their affiliate status. I don’t begrudge them, but let’s call a spade a spade.

  9. Neil says:

    I’ve been thinking of swinging over to the “gamer” camp. I think my CSP annual fee was last November. Do you know if Chase gives a pro-rated refund upon cancellation?

  10. Jesse says:

    If you’re a serious churner then:
    1) There should be very few purchases that don’t fall under some card’s category bonus
    2) For nearly every category there are most likely several cards that give bonuses in that category
    3) Much of your spending will be spending to meet spend requirements for the new cards you’re churning every few months
    3a) Of course, if you’re doing a lot of MS then you may have cards that you justify keeping on the basis of MS possibility, like the FlexPerks or Old BC or whatever
    4) For that sliver of spending that gets no bonuses on any card, you should probably have an Arrival or Citi DC or other flat 2% card

    Given all that, and given that the Sapphire is hardly unique in its bonus categories, it makes absolutely no sense to me to hang on to it. However, if one is either just dipping their toes into multiple cards, or doesn’t have time for more, or somehow has reason to generate many thousands in restaurant spend doing client lunches for their job or whatever, then CSP might make sense. But all things considered that seems like a pretty small number of people.

    Cards with no foreign transaction fee are a dime a dozen. It should stop being treated as a selling point and start being treated as a mark of shame, certainly for any card with an annual fee, not to waive them.

    • Jesse says:

      Short version: If one were only going to have one or two credit cards, CSP would be an excellent choice. But since hardly anyone reading blogs like this is in that position, it’s surprising to see people advocating keeping it long term. Especially if you stagger having the CSP, United, SW, Hyatt and BA cards from chase. that way even when you don’t have CSP you’ve either recently gotten or will soon get a generous bonus one of the top UR transfer partners and you can patiently keep earning points on the Freedom until your next UR-eligible card comes along. .

    • andreas says:

      my thoughts exactly! There are better cards for the large majority out there, gamers, keepers, rich, middle class or frugal.

      I think a lot of keepers don’t want hassle, and let’s be honest, it takes a lot of work if you want to maximize the value from CSP or any miles/points. For those who don’t want to put up with the hassle of miles, going with cash back is a much better decision. Hotel rewards involve less hassle so I like pairing that along with cash back cards. I like the Hyatt card there.

      I think many typical middle class households will have these expenses
      $5000 groceries
      $5000 restaurants
      $5000 travel
      $2000 gas
      $10000 other non bonused categories

      Amex BCP makes a lot of sense for the groceries and gas category
      Citi double cash for non bonused spend is pretty good
      Hyatt card for the non forex fees & airline/restaurant bonus is good too

      So you paid $150 in AF and average around $800 in CB/hotel rewards for a net benefit of ~2.5% Arrival will get you benefit of ~1.9% as the AF eats up some cost.

      CSP does makes sense for only a small minority. I think I happen to be one because:
      – I like redeeming for park hyatts
      – I book lots of award tickets and I can get travel insurance with paying taxes with CSP. Not with other cards.
      – I rent cars several times a year and the primary insurance is good
      – I will keep the card for 22 months, and get another so I paid only $42.5/yr

    • andreas says:

      I think you have nailed the reasons.

  11. SJ says:

    Unless you are 100% sure of being automatically approved, I would not recommend this. A credit analyst smartly pointed out during my last Chase reconsideration call that I was smartly going through all credit cards they had and getting all signup bonuses. He asked questions like oh, why did you cancel the united explorer … I had legitimate reasons, so no issues.
    But I think if its clear that you closed a card and reapplied just to get another bonus, not sure how that would fly. Sure, its allowed, but Chase can twist the terms to their advantage anytime.

  12. andreas says:

    for people who read miles points blogs, paying AF on CSP makes no sense. I think your arguments along with the commenters are pretty clear.

    The other category of people are keepers who don’t do MS, don’t want hassle of miles/points and dont’ want to manage a lot of cards, they can pair amex bcp for groceries with another card to get aroudn 3% cashback on their overall spend.

    The other pairing card depends on how much they spend. some good options would be
    sam’s club for 3% at restaurants
    fidelity 2% or double cash for 2% with no AF
    boa 1.5 % travel card for no FT with no AF.
    chase hyatt: $75 AF but 2x hyatt points on airline, restaurants and no FT fee. Hotel points involve less hassle in redemeing than airline points.

  13. Jon says:

    I constantly recommend the arrival plus, its gotten me the must continual rewards and its the only card I put actual spend on. The CSP was one of the first cards I got, and Im still sitting on points. I will be canceling before the annual fee.

  14. andreas says:

    One thing that is not discussed often is the insurance & protection benefits that come with premium cards. If I’m going to return something or need warranty, I usually put it on an amex card (protections are virtually identical on all cards so I use SPG ).

    The travel insurance provided by chase sapphire is the best I know of. AFAIK, Amex does’t have any meaningful trip cancellation/interruption insurance. The purchase protection benefits on CSP as just as good as amex. That’s another reason I can justify the CSP. The $95 is not a big deal if you make it up elsewhere in the hobby.

    The card protection benefits that come with arrival and c1 venture are rather weak and therefore I don’t use them for shopping high value items. They are good for pay for non personal items like a car wash, laundry bill, netflix, phone bills etc.

    • Steven says:

      Sorry but it’s laughable comparing amex purchase protection with Chase purchase protection.

      I know from personal experience and check out the Internet of people’s horrible experience with Chase, amex on the other hand makes it extremeley easy

      • andreas says:

        yes. I’d agree that amex was an easier process. Amex purchase protection is only upto $300 per item. CSP is $500 per item. My experience has been positive with both. YMMV.

        i don’t think amex has any trip interruption insurance. Even if they did, since most of their cards have FT fees, I wouldn’t really be using them for my trips. I was reimbursed $1700 for a trip that i put on my CSP.

    • Chuck Sithe says:

      Definitely a valid point about the travel insurance.

      I also found interesting that you had nice experiences with CSP purchase protection. I’ve had great experience with Amex, but it hasn’t yet come up for me to try Chase.

  15. Carole says:

    My husband and I travel a great deal, both internationally and domestically. I have the Chase Sapphire Preferred, Arrival and Citi Thank You. The Thank You is new, and I’m not sure how to use it. We’re leaving for a month long trip to Europe and I’m thinking I should use the TY because it gets three times on travel. I have used the Arrival to pay for travel expenses, and have about 600,000 UR points, and a Sapphire card that still gets 7% at the end of the year. Which card should I use on this trip, or should I use all three?
    Thanks.

  16. Carole says:

    I had a $45.00 item stolen in Cambodia and was quickly reimbursed by Arrival.

  17. Mike says:

    Timely discussion for me, since my CSP first annual fee falls due this summer. Any tips from those with experience getting an Ink card using a start-up business?

  18. Joel says:

    Why is gaming the system so important. Every time you apply for a new Chase card Chase will look at your entire portfolio – both number of cards issued and utilization of the cards. The people at Chase are not dumb. The assumption that you will be able to churn Chase cards forever is crazy! Don’t you think that the executives at Chase read these blogs?

    If a card works for me I don’t mind paying a reasonable price for it. The CSP card gives me about $4,000 in savings on trip cancellation insurance on cruises that I book (7% of the trip cost is the average savings amount).

    My wife and I have over 30 Chase cards (business and personal). I don’t mind supporting a good company, certainly when they provide excellent customer service.

    By the way there are no retention bonuses on the CSP card!

    Those of you who game the system – risk being barred from the system. You will have no method of appeal!

    • Chuck Sithe says:

      Yeah, it could be it gets difficult eventually. I don’t have data on that.

      I think it’s reasonable to be a good customer and pay fees for a company you want to stay on good terms with, as you suggest.

  19. Alex says:

    For me, it’s not entirely about the points. For me, the CSP’s worth it due to the various travel insurance programs, flexibility (points can usually be redeemed for > $0.01/point, esp. with upgraded tickets), and real live American customer service. Ideally, you never have to contact customer service. In reality, when things go wrong it’s refreshing to NOT deal with overseas script-readers who aren’t allowed to do anything other than read scripts to you and ultimately can’t help you.

  20. James says:

    If anyone is thinking of applying for the chase sapphire preferred, here is my link and I’d really appreciate is even one person is willing to use it. thanks! 😀

    https://applynow.chase.com/FlexAppWeb/renderApp.do?PID=CFFD2&SPID=FGKQ&CELL=6RLH&MSC=1517938244

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