Helping A Reader Optimize Their Chase Card Strategy

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Spsqg asked a question in the Ask Lucky forum regarding how to optimize a Chase card strategy. While most people won’t have exactly the same question, hopefully the thought process that goes into this and general tips are useful for others. To summarize:

The questions are:

  • Could Spsqg‘s husband apply for his own Sapphire Reserve Card and be eligible for the bonus? If so, would he have to downgrade his Sapphire Preferred to a Freedom Unlimited prior to doing that?
  • If Spsqg‘s husband isn’t yet eligible for the Sapphire Reserve, would it make more sense to downgrade the Sapphire Preferred to the Freedom Unlimited to save the annual fee, and make him an authorized user on the primary Sapphire Reserve account?
  • If he becomes an authorized user on the Sapphire Reserve, would he be eligible for the card in his own name in the future?
  • Should Spsqg apply for a Freedom Unlimited directly regardless, since it has no annual fee?

To give some general advice based on these questions:

Being an authorized user doesn’t prevent you from getting a card yourself

It doesn’t matter what the credit card is — being an authorized user on a particular credit card doesn’t preclude you from getting the card yourself, and for that matter, it doesn’t preclude you from earning the welcome bonus on the card. So if your spouse has the Chase Sapphire Reserve® and you’re an authorized user on the card, you can still earn the bonus on the card yourself.

The best way to switch from the Sapphire Preferred to the Sapphire Reserve

Do you currently have the Chase Sapphire Preferred® Card but want to transition to the Chase Sapphire Reserve®? There’s definitely a right way to do this and maximize your points. As is suggested in the above question:

What’s the advantage of this? For one, you’ll be eligible for the generous sign-up bonus on the Sapphire Reserve Card. But much more important is that the Sapphire Reserve and Freedom Unlimited is the single best card duo out there, in my opinion. That’s because the Sapphire Reserve offers triple points on dining and travel, while the Freedom Unlimited offers 1.5x points on everyday spend. You can redeem points for a minimum of 1.5 cents each towards a travel purchase if you have both of those cards, meaning you’re earning a 4.5% return on travel and dining, and a 2.25% return on everything else.

There are two major restrictions here to be aware of:

  • You’re generally not eligible for any of these cards if you’ve opened five or more new card accounts in the past 24 months
  • You’re only eligible for the sign-up bonus on the Sapphire Preferred or Sapphire Reserve if you haven’t received a new cardmember bonus on either card in the past 24 months

The one alternative that’s worth considering is just adding him as an authorized user on your Sapphire Reserve. The way I see it, the out of pocket on the Sapphire Reserve is $150 per year, when you subtract the $300 annual travel credit. Instead you could add your husband as an authorized user on the Sapphire Reserve for $75, and in theory you’d come out $75 ahead. That might just be worth it. However, that wouldn’t get him the sign-up bonus, and also wouldn’t get him the Global Entry fee credit, and a few other perks.

Specific advice for the above situation

To answer Spsqg‘s questions:

  • In general your husband can get the sign-up bonus on the Chase Sapphire Reserve® in spite of being an authorized user on your card, though he’d need to downgrade his Chase Sapphire Preferred® Card to the Chase Freedom Unlimited® prior to doing that
  • The catch is that if your husband only opened the Sapphire Preferred in June 2016, he’d have to wait 24 months from when he earned the sign-up bonus, meaning he’d only be eligible around June-September 2018
  • I don’t think there’s much value in applying directly for the Freedom Unlimited if you’re already an authorized user on your husband’s card, unless it would somehow make your accounting easier; the card has no annual fee so you’re not gaining anything by doing that
  • If I were in your shoes I’d wait until your husband is eligible for his own Sapphire Reserve this summer, and then execute the Sapphire Preferred to Freedom Unlimited switch, and then apply for the Sapphire Reserve outright

I’m curious if other people would handle this situation differently?

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Comments

  1. Sorry Ben, but after reading your post, I have a different question:
    I am about to apply for the Chase Ink Business Preferred, and planning to start accumulating Chase Ultimate Rewards points. However, would it be advantageous to apply FIRST for either the
    CHASE SAPPHIRE RESERVE or the CHASE SAPPHIRE PREFERRED card – or it does not matter? Have you published your opinion on this before? Since the business card (as you said) does not fall under the 5/24, should I get one of the other two (Reserve or Preferred), and THEN apply for the Ink business? I am at 4/24. Thank you

  2. just one more question: are the 50k bonuses for the Reserve and Preferred are the highest we have seen, or were there better bonuses for these two?

  3. @Daniel B. You should absolutely try for the Ink Preferred first if you’re 4/24 because, as you referenced, it will not count against your 5/24 limitation.
    As for the bonuses, the initial sign-up bonus on the Reserve was 100k. However, most people agree that the chances of a public 100k offer returning are slim to none.
    Recently, Chase started offering a 60k bonus, but, unlike the 50k bonus offer, the $95 annual fee is NOT waived for the first year. Ask anyone in the hobby, though, and you’ll hear that paying $95 for 10k Chase UR is definitely worth it.

  4. @Daniel B Ink Preferred first. You need to be 0/30 and below 5/24. Ink Preferred will not account against your 5/24 afterwards.

    i think CSP highest was 70k. was a long time ago.

  5. @Ben

    With Chase offering mobile payments and groceries for q2 and mobile and gas for q1, do you still prefer FU over freedom?

  6. I need to clarify a point made in the article. I currently have a Chase Sapphire, opened in September, 2015 and a Freedom card, opened in January, 2016. If I downgrade my Sapphire to a FU and apply for the Chase Reserve, will I qualify to earn the bonus on the Reserve?

  7. If you’re under the 5/24 rule and already have a Reserve or Preffered card why not out right sign up to Freedom Unlimited? You can get 15,000

  8. @James N. chase bonus is 24 months on when u got your bonus, so assuming u got it in Nov 2015, I’d probably apply in Dec 2017 just to be safe.

  9. I know I’m going to get reamed for this by certain people, but…remember when this site used to also be about Trip Reports? And not about constant referral pimping? Whatever happened to the new Singapore first class review?

  10. My wife and I are in a similar situation. Before we got married, I had her apply for the Sapphire Preferred. I too had this card. Once we got married, I had her downgrade her CSP to the Freedom Unlimited. I opted for this and its 1.5x points over the Freedom since we spend a lot at Costco and the 1.5x would be reliably lucrative. The plan was to have her apply for the Sapphire Reserve but this is where we had a little speed bump. While she was under 5/24, I did not realize that her status as an authorized user of several of my accounts showed up on her credit report and Chase rejected her application. We are waiting that one out now and we will try again soon. Does anyone know if I drop her as a user on any of my cards that she rarely uses if those cards disappear entirely from her report?

    As for me, I just came into compliance with 5/24 and jumped on the Ink Business Preferred. I am almost finished with my initial spend for the whopping 80k UR points. My plan is to downgrade my CSP to the Freedom so that, between my wife and I, we have both the Freedom and the Freedom Unlimited. I will then apply for the Reserve. I have avoided signing onto her Freedom Unlimited as an authorized user for fear of messing up my 5/24 status! Frankly, once I get the Reserve, I am ready to stop worrying about 5/24. There are some additional cards out there I want to purpose but have limited myself to business cards for almost a year and a half to get back in the good 5/24 graces of Chase! It’s frustrating to have to ignore numerous attractive offers!

  11. Lucky, what is the best duo for those living abroad? Freedom has foreign transaction fees, no? So is CSR/SPG the way to go?

  12. So I have had the Chase Sapphire Preferred for 3 months now, already have gotten my sign up bonus. If I simply want to get the Chase Sapphire Reserve, is it possible to upgrade immediately? Or do I have to downgrade to a Freedom Unlimited and then apply? I was told that I have to wait at least a year to get the Reserve, and if I want the sign up bonus for the reserve I have to downgrade and wait 2 years after the downgrade.

  13. So how long do you have to wait after you opened a Preferred to upgrade or sign up for the Sapphire (after downgrading to Freedom)? I got my preferred in December 2017 and have already received my sign up bonus

  14. Hi, not sure if I am looking up the wrong card, the Chase Freedom Unlimited says it’s 1.5% cash back, as opposed to earning 1.5 points. Is there 2 versions to this card?

  15. Chase does still offer the Chase Sapphire when downgrading – no annual fee.

    I have a CSR and just downgraded my CSP to a CS so could still get the opening bonus on the Freedom Unlimited (I have a regular Freedom).

  16. Hi Lucky,
    Not related to the post (sorry!) but I have found a long haul lie-flat business class product that you may not be aware of: Aigle Azur. They are a French airline based in Paris Orly, and will be recieving their first widebody jets, two A330s, in April, and they will feature a lie flat business class. Currently, their longest route for this plane is ORY-BKO, which is only about 5 hours, but they are apparently using their new aircraft for ’longhaul expansion’, so we may see more routes in the future. Just thought I’d let you know!

  17. [quote]The catch is that if your husband only opened the Sapphire Reserve in June 2016, he’d have to wait 24 months from when he earned the sign-up bonus, meaning he’d only be eligible around June-September 2018[/quote]

    You mean Sapphire PREFERRED in June 2016 here right? The earliest anyone got the reserve was 8/16

  18. @ CM — Generally speaking you have to wait 12 months before doing any sort of a product change.

  19. @ D — The problem with the SPG Amex is that Amex isn’t accepted abroad in many places, so an Amex might not be ideal. I’d say a better option for non-bonused spend might be something like the Barclaycard Arrival Plus.

  20. @ Alex Z — You certainly could. Personally I’m not sure that’s worth the effort/inquiry/losing the age of your account given that 15K points isn’t that much. However, others will certainly feel differently.

  21. @ James N — You should be, since it has been over 24 months since you got the bonus on the Sapphire.

  22. @ Jeremy — It all depends on how much you spend. For non-bonused spend the Freedom Unlimited is still much more lucrative. Personally I have the Freedom, Freedom Unlimited, and Sapphire Reserve, and find them all to be worthwhile.

  23. @ Lucky – I have a question not related to this topic. Would you spend $200 on 2 hotel nights just to meet the IHG Accelarate bonus 25,500 points? 25,000 points would allow me to get a free in Hotel Indigo Tel Aviv, if I’d pay cash it would be $280 with tax and fees

  24. Lucky, you don’t have to use the awkward and grammatically incorrect “their” in your story headline. The person is a woman, so just write, “Helping a reader optimize *her* Chase card strategy”. There’s no need to vague-ify it when it’s perfectly reasonable to use the correct word.

  25. @ erick schmitt — It’s 2018, and it’s not safe to assume anymore that someone with a husband is a woman. I’ll have a husband later this year, and I’m not a woman. It’s one thing if there were cues in the post indicating that the poster was a woman, though I didn’t pick up on any of those? That’s why I went with the awkward grammar over “his/her.”

  26. Thanks for your thoughtful reply. And of course this is not the ideal place to have a deep discussion about the matter, so understand if we leave it be. While I can get your consideration for all possibilities, in reality if someone refers to a husband, the simple demographic probability is that they’re likely to be a woman. And if the person asking you didn’t make it a point to say that he/she is not a woman, it seems a little overly sensitive / non sequitur to make it become a point by neutering the words. Of course you’re more in tune with this than most, but it’s not always necessary to feel that ordinary words are going to offend everyone under the sun. That leads to silliness like: http://www.independent.co.uk/travel/news-and-advice/qantas-gender-neutral-language-flights-lgbti-manual-cabin-crew-training-a8240191.html In fact, the person posting the question ought not to have used the term “husband” at all either under this logic!

  27. Thanks for your reasonable reply. And of course this is a sub-optimal place to have a deep conversation about it, so I’m happy to leave the point here. But I would just add that the demographic reality is that someone writing to you as a stranger about a husband is highly likely to be a woman, and to turn it into a gender neutral possibility when the person hasn’t made a point about it seems a bit of non-sequitur / overly sensitive. Of course you may be more in tune with these issues than others, but I would say that to go out of your way to assume a totally gender neutral stance when not warranted is unnecessary. Taken too far it leads to silliness like the Qantas gender neutral issue (google for the headline last few days). If the person asking the question was gay and would have been so offended, he himself should have avoided using the term husband to begin with! Anyway, thanks for your informative articles.

  28. @ Lucky –

    I don’t agree with your analysis.

    It depends on where the couple also frequents for getting the points besides Chase. This is the missing important information.

    I agree that the higher end Freedom card is good for every day purchases, but there may be other cards earning points elsewhere that is better for everyday purchases depending if you want the points there. This being said, for a Chase card for everyday purchases it is the best one.

    With this said, I am not sure that the reader’s spouse should necessarily have his or her own card. The card is pretty expensive, so while there is the $300 travel credit and a priority pass, I am not sure that spending all of that money in annual fees is justified. They may do just as well or better to use one account with an authorized user and to push all of the points in that one account.

  29. @ Lucky – thanks for your response. I found the answer I was looking for in your previous article.
    BTW, thank you for being sensitive to NOT assuming anyone with a husband is a woman in this day and age. I respect that very much. I still “sigh” every time when a hotel front desk person assume my husband and I checking into the same hotel room with one bed as an “error”.

  30. Hi Lucky!
    Thanks so much for the detailed response! This post was very helpful in answering all of the questions that I posed. I actually geeked out a bit when I read this.

    Just a follow up question regarding @Alex Z and your response. My husband/spouse* and I are happy sharing ultimate rewards points, as we jointly pay for all of our accounts. If he were to add me as an AU on his downgraded FU account, we would receive $25 cash back to that account. Or I could open my own for the 15k reward. You mentioned it not being worth the effort or “losing the age of my account”. Could you clarify that? When you open any new Chase card, does it erase all previous longstanding history with the Bank? I am planning on maximizing other offers and opening other future Chase and non-Chase accounts at some point as well, if that factors into your answer.

    *@erick schmitt Plot twist…I am, in fact, a woman! I had a good chuckle that after my crazy long post, my gender was up for debate. I did not even realize my post was vague on my personal gender. It wasn’t intentional, but I think Lucky’s awkward grammer/gender neutral response was appropriate.
    @Lucky, congrats on the upcoming nuptials!

  31. Hi Lucky,
    Whew! Finally we are both on the cusp of attaining 3/24! Considering the Sapphire family as well as Hyatt in the Chase offerings. Would you have an order in which to proceed if we both want to maximize points for both the preferred and reserve cards, as well as the hyatt card? My husband (yes, I am female, LOL) does not yet have the Marriott card, but I do. Would like to add that to his portfolio as well. Love the blog. Everyday reader.
    Cheers,
    LLD

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