Why I’m Falling Out Of Love With The Sapphire Preferred Card

Filed Under: Advice, Credit Cards
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I’ve been following the credit card rewards space for a long time (well over a decade), and I remember how excited I was when I got approved for my first credit card at the age of 18.

The space has evolved significantly, and credit cards have truly never been more rewarding, between the welcome bonuses, the perks, and the bonus categories for spending.

Nowadays I’m earning an average of more than 3x points for my everyday spending, which is something I could have never imagined a decade ago.

In this post I wanted to take a critical look at the Chase Sapphire Preferred® Card, which is a card that changed the credit card landscape at the beginning of this decade, but that has largely been resting on its laurels since.

Now don’t get me wrong, the card still has a lot going for it, and I still recommend it as the best beginner card for people getting started with miles and points. But I think it’s fair to say the Sapphire Preferred is also not what it once was.

So let’s take a closer look at that — what made it so special, why isn’t it as special anymore, and what could be done to improve it.

The credit card landscape back in the day

Back when the Sapphire Preferred first launched, the credit card landscape was completely different. About a decade ago I’d say Amex dominated the credit card rewards space:

  • The Starwood Preferred Guest Amex was the most lucrative credit card for everyday spending, as the card offered one Starpoint per dollar spent, and you could transfer those points to airline partners at a 1:1 ratio, with a 25% bonus for every 20,000 points transferred
  • The Amex Premier Rewards Gold Card was popular for earning Amex points, as it offered 3x points on airfare, and 2x points on gas and groceries in the US
  • At the time all but the Amex Platinum charged 3% foreign transaction fees, so there wasn’t even a great rewards card for international purchases

At the time if you had told me that Amex would one day revamp the Premier Rewards Gold Card as the American Express® Gold Card, and it would offer 4x points on dining purchases globally and 4x points on supermarkets purchases in the US (up to $25K per year) with no foreign transaction fees, I would have thought you were nuts.

The Sapphire Preferred was a market disruptor

I remember in 2011 when the Sapphire Preferred came out with a splashy welcome bonus (40,000 points was a huge deal back then), a shiny metal card, customer service reps who answered the phone on the first ring, and a brand new transferrable points currency, it was a game-changer.

The card also included many of the same benefits it has now:

  • 2x points on travel and dining
  • No foreign transaction fees
  • Access to a lucrative shopping portal
  • The ability to transfer points to partners, or redeem them for 1.25 cents each towards travel

There were a few other benefits that have since been removed, like an unheard of (at the time) 3x points on dining for the first Friday of the month, and the 7% annual dividend on earned points.

There was simply nothing like it, and the Sapphire Preferred blew the competition away.

Not only that, but conveniently for Chase, the launch of the Sapphire Preferred coincided with:

  • Aeroplan hugely devaluing their award chart and adding fuel surcharges to most partner awards (Aeroplan was one of the best Amex transfer partners)
  • The end of the relationship between American Express and Continental, due to the merger with United
  • A revamp of the British Airways award chart (another one of Amex’s best transfer partners)

At the time, all of this contributed to the relative devaluation of Membership Rewards over the new Ultimate Rewards.

Other credit cards got way more competitive

While the Sapphire Preferred moved the bar for the credit card market in the US, over time, other issuers and co-brand cards have caught up. Features that we’d never have imagined in 2011 are now effectively table stakes:

Nowadays some credit cards offer up to 5x points on dining

Not to mention Capital One, Citi, and even Brex now allow points to be transferred to airline partners.

At the same time, American Express has worked to expand the Membership Rewards program, adding new redemption partners, continuing to have transfer bonuses, and has more or less completely revamped their card portfolio with enhanced earnings rates and benefits.

Meanwhile, the Sapphire Preferred is essentially the same card as it was in 2011. The 7% annual dividend has gone away, and primary rental car coverage added, but the card has maintained the fundamental value proposition of earning 2x on travel and dining, with the ability to redeem directly through the portal or transfer to partners.

What would make the Sapphire Preferred more competitive?

Given how other cards have evolved a lot and the Sapphire Preferred seemingly hasn’t, what could be done to make the card more compelling again? A few things come to mind — some are specific to this card, while some are general improvements that could be made to the Ultimate Rewards program, which in turn would change my feelings about this card.

Transfer bonuses

While Amex, Capital One, and Citi, frequently offer transfer bonuses when you convert points into airline miles or hotel points, Chase doesn’t. They’ve only ever had a single transfer bonus that I can recall.

This is something that could add a lot of value for cardmembers, especially given the increasing overlapping partners between transferable points currencies.

Ultimate Rewards needs fresh partners

We’ve seen the major transferrable points currencies add partners over the years, and in some ways, Ultimate Rewards has become less competitive. Chase lost Korean Air as a transfer option, which was one of their most valuable partners.

I’d argue that at this point Ultimate Rewards is a program for earning Hyatt points, and perhaps in some cases, an argument could be made for transfers to United (though less so than before, given the recent MileagePlus devaluation).

Aside from that, though, there’s lots of overlap with other transferable points currencies, and other currencies have more frequent transfer bonuses.

I primarily convert Chase points into Hyatt points nowadays

Improved category bonuses

It goes without saying that improved category bonuses would go a long way to improving the Sapphire Preferred. Nowadays some of the cards competing with the Sapphire Preferred offer 3x points on many purchases, while the Sapphire Preferred is capped at 2x points.

For example, the American Express® Green Card was recently revamped, and now offers 3x points on dining, travel, and transit. That card has a reasonable $150 annual fee (Rates & Fees), and offers up to $200 in annual credits that offset that.

I do recognize that revamping the Sapphire Preferred bonus categories might be challenging, given that the Chase Sapphire Reserve® Card offers up to 3x points on dining and travel purchases, and they don’t want to cannibalize that card.

So any change in bonus categories would need to be coordinated between the two cards.

Annual credits

We’ve increasingly seen card issuers add annual credits, which can come in a variety of forms. Presumably, some of these credits are pretty low cost to the card issuers (like the $100 CLEAR credit on the Amex Green), so it would be nice to see Chase add some sort of credit to this card.

The Amex Green Card offers a $100 annual CLEAR credit

Who is the Sapphire Preferred still right for?

While I think the Sapphire Preferred is no longer in a league of its own, that doesn’t mean the card isn’t worth considering. Quite to the contrary, I think the card still makes sense for some/many.

There are two circumstances in particular where I think this card makes a lot of sense.

The best travel protection on a sub-$100 annual fee card

Taking the rewards structure out of the equation, one thing is still industry-leading about the card. In my opinion, the Sapphire Preferred offers the best travel protection and car rental coverage of any personal credit card with an annual fee of under $100.

For someone looking for that protection on a card with a reasonable annual fee, the Sapphire Preferred is tough to beat.

An easy entry into the Ultimate Rewards ecosystem

The Sapphire Preferred can be worth having as a way to get into the Ultimate Rewards ecosystem. While individual Chase cards may in some cases not be as lucrative as they used to, combined the entire portfolio of cards still is industry-leading.

If you have the Sapphire Preferred then points earned on the following no annual fee cards can be converted into full Ultimate Rewards points at 1:1 ratio:

The overall Ultimate Rewards ecosystem is still tough to beat

For someone who doesn’t spend that much on dining or travel, and for someone who doesn’t value lounge access, the Sapphire Preferred could be a better option than the Sapphire Reserve.

Personally I think the single best card for getting into the Ultimate Rewards ecosystem is the Ink Business Preferred℠ Credit Card. The card also has a $95 annual fee, but has so many amazing perks — an 80K welcome bonus, 3x points in select categories, cell phone protection, and more.

Bottom line

The Sapphire Preferred was groundbreaking in so many ways when it was first introduced, but now it seems like it’s mostly just chilling.

While the card is still very well rounded in terms of the travel protection it offers, the reality is that it’s almost not worth putting spending on the card anymore.

At this point the Sapphire Preferred is most useful as a card that allows you to pool Ultimate Rewards points, should you want to use Chase’s excellent no annual fee cards to earn rewards.

What are your thoughts on the Sapphire Preferred compared to the competition these days?

The following links will direct you to the rates and fees for mentioned American Express Cards. These include: The Blue Business® Plus Credit Card from American Express (Rates & Fees), and American Express® Green Card (Rates & Fees).

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Comments
  1. And yet I was declined today as trying to get into UR, when I have $100K+ spending coming up, and 2/24.
    Well done Chase.

  2. It’s still a decent $95 fee card.

    1) Most consumers aren’t getting business cards, so its best to leave all of them out of this discussion

    2) Many consumers don’t want to pay $450 up front for a card (even if you get $300 back)

    3) Sapphire Preferred, paired with a Freedom Unlimited, covers a lot of ground for a $95 card. Many people may not prioritize lounge access 2x dining, 2x travel, 1.5x everything else.

    4) United and Southwest transfers are critical for those that actually fly a lot of paid travel with those airlines. Citi only has JetBlue ass a domestic airline partner, which makes it a bit niche for a lot of people

    5) It is more difficult to get the CSR straightaway these days. A good way to get the CSR is to apply for the CSP, keep it for a year, and then upgrade.

    Even with all that said, I kind of agree with your points. I have been debating downgrading to the Chase Sapphire preferred, but the math doesn’t work. Why?

    5) The single most useful feature of UR nowadays is the 1.5 cents travel redemption, which is only available on the CSR. I know you don’t redeem UR this way but it is more and more useful in the days of discounted first class, JetBlue Mint, etc. Chase as a bank also continues to have the broadest dining and travel categories. 1.5 cents per redemption is alone a good reason to keep UR points in general

  3. Glad to see you finally admit that the CSP is noncompetitive these days. The only reasons to get it are: (a) for the large signup bonus with the intent of product changing to the CSR after a year, or (b) as a downgrade from the CSR for somebody transitioning out of the UR ecosystem but still has URs to redeem.

  4. I disagree with you very much. $95 per year is a steal considering I get primary car rental insurance. I don’t need the more expensive card since my buddy has me on his Reserve so he can transfer Hyatt Points to me (Globalist Guest of Honor ) so I get Priority Pass. All I care about is that Primary rental car insurance and 2x on travel and dining.

  5. Re: discussion of value of UR and current transfer partners.

    A lot depends on where you live and what airlines you use the most, of course. One interesting thing to note about their transfer partners is the geographic alignment of the DC/Baltimore and Bay Area regions. Both have the same big airlines, offering a ton of service out of hub airports: United and Southwest- United at IAD/SFO, and Southwest at BWI/OAK. And both are UR transfer partners. Also note that those are the two highest income regions, per capita, in the US. So it’s a pretty good alignment for Chase, at least in those two regions.

  6. @ Ben — Didn’t stop you from including four referral links to the card. I guess it must still be pretty good.

  7. Right now i’m carrying CSP, Citi premiere, Amex plat, Chase Bonvoy, CO Venture and United Mileageplus.

    I’m in a united hub and use them for most of the domestic travel or overseas rewards on star alliance so the amount of wifi alone that i buy with their 25% discount easily pays for that card.

    Bonvoy is on the chopping block as i view their points as least valuable and the ones i have i will try to use for transfers to book ANA, JAL or Korean air F cabin.

    Citi premiere is my new fave < $100 annual fee given the return on hotels.

    Amex plat is with me for the long haul.

    After Bonvoy it'll be between CSP and CO Venture on the chopping block as i'm struggling to find much use for either given my travel patterns.

  8. In my opinion, CSR has killed CSP; It’s the same card but better in every aspect
    -CSR’s effective annual fee is only $55 more than CSP, and you can close that gap quickly with 3x travel and dining (I mean, you’re getting a travel rewards card because… you travel, right?)
    -1.5x travel redemption is killer, if you fly economy (the majority of the flying public do not care for redeeming some weird middle-eastern First Class itinerary), and on a purchased fare, so we still get qualifying miles and dollars
    -I agree, other rewards cards have caught up

    If they remodel CSP to be like AmEX Gold, with, say a 3x grocery/2x gas bonus or something, and make it available to CSR users, then UR will be the undisputed best points ecosystem

    PS: Never had issues getting approved with CSR as my first Chase card

  9. I got it because it was offered in my login, so despite my 11/24 status I got approved. I will be upgrading to Reserve as soon as I hit the one year.

  10. If Amex didn’t have such wacky/convoluted credits/perks, Chase would be dead in the water. The Green/Gold is a powerful, simple, and lucrative enough earning combo for most people.

    I’d drop Chase all together, but Amex’s bonuses and credits have zero appeal (they could offer $1,000 towards Away luggage and I would still refuse to use that overhyped, overpriced “Ooooh look at me on Instagram!” bag)

  11. I feel like you could write something similar about the CSR. Amex makes it easier to earn points all the time with their Rakuten partnership, far superior Amex Offers and higher bonus categories. The transfer partners and transfer bonuses are also superior. CSR/CFU is a nice way to earn Hyatt points, and that’s about the only advantage they have for me.

  12. Yeah I agree. It’s a great starter card, but for those of us who have the Amex Plat, Citi Prestige, Amex Gold, what have you, it’s just not a factor

  13. They offer more points per dollar nowadays, comparing to beginning of the century, simply because all the points are worth less now.

    5x, 6x, 7x is on the way, call me nuts if you want. lol

  14. The card has lost value for me as well. If your only transferring points to Hyatt, why not just have the Hyatt card? Hyatt’s bonus categories overlap with the CSP, with more bonus for gyms, etc. I already have the Amex cards for airlines purchases, and generally only stay at Hyatt. Amex is getting the travel protections after the new year, so really have no reason to keep the card. Mine is getting downgraded to a 2nd freedom card.

  15. I agree with the take that UR are largely useful for Hyatt redemptions at this point. I used to use them for United, but lately the combination of dried-up availability and higher award prices it’s just not worth it for me. I fly Air France a lot, however, so I do find the Flying Blue transfers useful for upgrading flights.

    The Amex ecosystem is far more compelling at this point, and the only reason I haven’t switched over fully is because I’m temporarily living abroad, which makes a lot of the perks useless for me because they are restricted to the US (Uber and airline credits for Platinum, supermarket bonus and dining credits for Gold, CLEAR membership for Green). So for now, I’ll stick with the Sapphire Reserve, but that could change if/when I’m back in the US.

  16. Chase needs to up the multiplier on the CSP to 3x and perhaps increase the AF to $150.
    Concurrently, Chase needs to up the mulitplier on the CSR to 5X and perhaps increase the AF to $550.

  17. It’s still great for beginners and is where I’ve started. I’ve talked friends into getting one who would never go for the higher annual fee without seeing value first.

  18. Difficult to make major changes to the card without potentially cannibalizing consumers of the Sapphire Reserve card. I think Chase has to walk a fine line here between offering something that has enough value to pay $95/year for but not too much value that people will give up the Reserve – a difficult balancing act.

  19. Don’t forget back in the day you would get 10 UR points every time you swiped your Chase Freedom card if you already had a CSP and a Chase checking account!

  20. Compared to Amex, Chase has a decisive advantage: it’s Visa. So so so so much wider accepted. The main reason for me to keep this card at this point.

  21. Oops, I’m wrong. You didn’t need a CSP to get the 10 points per transaction on the Freedom card, just a Chase checking account.

  22. CSP is a good card. CSR is just so much better barely anyone should get the CSP.

    @Lucky likes to rehash this topic every few months. Public consensus still agrees the same.

    @DaisyO
    For those who are old enough, and the time where influencers/bloggers haven’t break the credit card yet. Back in the day card for me was the Citi PremierPass Elite. You earn bonus points up 100,000 per year on “miles flown”. Sadly it existed only back in the day. I doubt bloggers won’t break that card even harder than CSR today.

  23. Yeah, Primary Rental Insurance is the only reason I carry this. Wish they add at least 10 priority passes like Amex Surpass does to make it more compelling

  24. All the CSR lovers out there. Great card, yes, but no one has mentioned the $75 AF for authorized users. Those add up in a household where you don’t need several CSR’s.

    CSP wins when our AMEX cards don’t code correctly or pretty much anywhere else in the world, making it still quite relevant in my eyes.

  25. Being over 5/24 I’m stuck with the Chase cards I already have (SW, CICx2, and CSP). None of my other reward cards are Visa, so I use CSP typically for Costco. It’s also the only card I have that has primary CDW coverage.

  26. It’s nice to hear someone criticize or discuss the cons of this card for once. While I get bloggers need to make a living, the constant “Why I Love The Chase Sapphire Preferred” posts have gotten out of hand. I sometimes wondered if Chase had elevated the referral bonus on these or that simply the odds of approval (and receiving a referral bonus) were better.

  27. Please please please don’t suggest that Chase add credits! If they add credits they will increase the annual fee!
    This is a solid card, if you don’t like it, get the CSR?

  28. I agree with what everyone else says: why get a CSP when you can get a CSR?

    But there’s a few niche cases, in our case, my partner and I keep separate finances, but have a single card for shared expenses, which is usually dining (which is, in our case, most meals). It would cost us $225 per year for the CSR (because of the $75 authorized user fee) per year, and I did the math and concluded the extra point on dining wasn’t worth it compared to just using a CSP. Though, as I type this, I’m reconsidering.

    And, as for the value of Ultimate Rewards versus what Amex and Citi offer, I think a huge selling point for us is the ease of combining our points.

    Chase could really use some new transfer partners, though.

  29. As I need Delta for status and BA for short haul AA F awards, most of my spend is on AMEX and most of the excess is on a 2% card. I have CSP for the primary car rental insurance and for contactless transit purchases. I have about 20 rentals a year, so $5/rental is an easy fee to pay.

  30. The incremental pt on dining and 1/2 pt on everyday purchases not enough for me to switch away from Chase entirely. My travel patterns focusing heavily on Europe, Japan and India makes UR satisfactory. I als have an Alaska account permitting The occasional Emirates flight.

  31. I just requested Chase for a Letter of Coverage and noted that the CSP no longer have Primary Coverage for car rentals in your country of residence.

  32. This blog is so much better than the points guy that hacks this stupid card nonstop just because it has a massive affiliate bonus whereas the CSR has almost none. Writing articles like these adds legitimacy to the OMAAT brand that you guys aren’t just in it for the bonuses and can write impartial articles.

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