We’ve seen card issuers add a variety of temporary perks to cards, in light of current circumstances. This has especially been the case on premium travel cards, given how few people are traveling right now.
A few days ago Chase announced some limited time benefits for the two Sapphire Cards, and in this post I wanted to take a closer look at the “Pay Yourself Back” feature, and discuss the value proposition of it.
Chase “Pay Yourself Back” basics
The Chase Sapphire Reserve® Card and Chase Sapphire Preferred® Card are two popular travel rewards credit cards. Historically there have been two ways to maximize the Chase Ultimate Rewards points earned on these cards:
- You could transfer them to the Chase Ultimate Rewards airline and hotel partners
- You could redeem them for 1.25-1.5 cents each towards a travel purchase through the Chase travel portal
While there have been other ways to redeem Chase points (for example, at one cent each towards statement credits), those are by far the most efficient options.
For a limited time, Chase has added the “Pay Yourself Back” feature, whereby you can efficiently redeem points for non-travel purchases. In other words, you can redeem points towards your daily expenses at the same rate you could redeem them towards travel.
What can you redeem Chase points for?
With Chase’s temporary “Pay Yourself Back” feature, you can redeem Ultimate Rewards points for statement credits against purchases in the following categories:
- Grocery stores
- Dining, including restaurants, takeout, and eligible delivery services
- Home improvement stores
How much value can you get per Chase point?
The value you can get using this feature depends on the most premium card you have:
- If you have the Chase Sapphire Reserve® Card (review), you can redeem Ultimate Rewards points for 1.5 cents each towards eligible purchases
- If you have the Chase Sapphire Preferred® Card (review), you can redeem Ultimate Rewards points for 1.25 cents each towards eligible purchases
How long is this feature valid?
Chase’s new “Pay Yourself Back” feature is valid through September 30, 2020, as of now. That’s based on when you request reimbursement, and not based on when the purchase was made.
How recent do purchases have to be for reimbursement?
With the Chase “Pay Yourself Back” feature, you can redeem points for any eligible purchases that posted to your account within the past 90 days.
Is there a minimum number of points you have to redeem?
Nope, you can redeem points with this feature for either all or part of the cost of an eligible purchase. For example, this means that you can:
- Redeem 100 points to get $1.25-1.50 reimbursed
- Redeem 1,000 points to get $12.50-15.00 reimbursed
- Redeem 10,000 points to get $125.00-150.00 reimbursed
Is this feature available on other Chase cards?
As of now this feature is only available on the Chase Sapphire Preferred and Chase Sapphire Reserve. That being said, Chase lets you combine all your Ultimate Rewards points.
This means in conjunction with either of the Sapphire Cards you could also redeem your points earned on the Chase Freedom, Chase Freedom Unlimited, Chase Ink Preferred, Chase Ink Cash, and Chase Ink Unlimited this way.
How does redeeming Chase points impact points earning?
Here’s an interesting — and perhaps unexpected — wrinkle to this redemption opportunity.
For context, the Chase Sapphire Reserve offers 3x points on dining and travel (and through June 30 the card is even offering 5x points on groceries). Ordinarily if you wanted to redeem those points towards a travel purchase at the rate of 1.5 cents per point, then you’d be forgoing Ultimate Rewards points on that purchase.
In other words, if you redeemed 10,000 points towards a $150 travel purchase, then you wouldn’t also earn the 3x points on that $150, since you’re not actually “spending” $150, but rather are redeeming points.
However, anecdotally it would appear that you’re still earning points as usual when reimbursing Chase transactions through the “Pay Yourself Back” feature. At least that’s the case for the transactions I’m seeing.
In other words:
- Say you spend $150 on groceries
- You’d earn up to 5x points, meaning you’d earn 750 Ultimate Rewards points
- You could then redeem 10,000 Ultimate Rewards points to wipe out that purchase
- Chase doesn’t seem to reverse the 750 Ultimate Rewards points you earned, meaning your net “out of pocket” is 9,250 points for a $150 purchase, which is 1.62 cents of value per Ultimate Rewards point
At least that’s how it seems to be working as of now, though that can certainly change (and if anyone has conflicting data points here, please let me know).
How much are Chase points worth?
This is highly subjective, but personally I value Ultimate Rewards points at 1.7 cents each. This is based on the ability to transfer the points to airline and hotel partners, where I get outsized value (under normal circumstances) for first and business class flights and luxury hotels.
Step-by-step guide to Chase’s new redemption feature
How does redeeming Ultimate Rewards points using Chase’s new “Pay Yourself Back” feature actually work? Just log into your Chase account and go to the Ultimate Rewards homepage, and then in the dropdown you’ll see the option for “Pay Yourself Back.”
On the next page you’ll see all eligible transactions, starting with those closest to 90 days ago (meaning the most recent transactions will be displayed last). You’ll also see the amount of each transaction listed, along with how many points it would take to wipe out the purchase.
When you select a particular transaction you’ll have the option of choosing how many points you want to redeem towards a transaction. You can redeem for anywhere from one cent to the entire purchase amount, depending on how many points you have and want to redeem.
Then the next day you should see your statement updated to reflect the statement credits for all the purchases.
Is this a good use of Chase points?
Let me start by saying that historically I’ve primarily redeemed my Chase Ultimate Rewards points by transferring them to airline and hotel partners, rather than redeeming them at 1.5 cents each towards travel purchases.
I’m still not sure whether I’ll take advantage of this, though I do have a few thoughts.
First of all, I consider this to be a much better value on the Sapphire Reserve than Sapphire Preferred. That’s because with both programs you can transfer points at a 1:1 ratio to airline and hotel partners, while the values are different when redeeming to offset a purchase.
Second of all, I think this is a better value than redeeming points for 1.5 cents each towards travel purchases for a few reasons:
- It appears that you still earn points for the purchases with this redemption option, which you don’t when redeeming towards travel
- I far prefer having purchases reimbursed after the fact, rather than having to book travel specifically through the Chase portal, which is restrictive
- With so many schedule changes in the airline industry I’d generally avoid booking travel through an online travel agency (including the Chase portal) because it only adds another layer of complication if you need to change or cancel a flight
It’s nice to see Chase create lucrative non-travel redemption options on the Chase Sapphire Reserve® Card and Chase Sapphire Preferred® Card. Chase’s “Pay Yourself Back” feature is a straightforward and valuable option to offset your everyday expenses, especially during this tough time.
I’m not sure this is a slam dunk redemption option for those of us who usually transfer points to airline and hotel partners, though I do consider this to be a better option than redeeming points towards the cost of travel purchases, for the reasons outlined above.
If you usually redeem Ultimate Rewards points towards the cost of travel purchases, you should absolutely take advantage of this. If you usually transfer points to partners, then it’s perhaps a tougher decision.
What do you make of the new Chase Sapphire redemption feature, and do you plan on taking advantage of it?