Reader Stephanie asked the following question in the Ask Lucky forum:
We’ve been exclusively using Barclays Mastercard as our every day spend and travel card. Hardly ever use Sapphire Preferred as we like to have one card that we both use as opposed to multiple cards. We have liked using this Mastercard. Is there any reason we should switch to Preferred or Reserve? What do you think of the Barclaycard Arrival Plus as THE primary card for everyday use?
This is an interesting question, largely because Stephanie talks about how she likes to have only one card that they use, rather than multiple cards. As I started crunching the numbers on this question, I was surprised by the conclusion I came to. I’ll share my thoughts on her situation, and see if I can’t slightly convince her to maybe use a two card strategy rather than one card strategy.
The Barclaycard Arrival Plus is a solid choice for everyday spend
The Barclays Arrival Plus® World Elite Mastercard® is a solid choice for everyday spend — the card has a reasonable $89 annual fee, offers 2x miles per dollar spent (in reality each “mile” can be redeemed for one cent towards the cost of a travel purchase), has no foreign transaction fees, and offers 5% of your miles back every time you redeem.
The way I view it, the card offers the equivalent of a ~2.1% return on your spend, give or take. That accounts for the 5% of your miles that you get back every time you redeem.
That’s a pretty solid return on spend, though at the same time the lack of bonus categories isn’t ideal, given how many points other cards offer on things like gas, groceries, dining, travel, etc.
Would the Chase Sapphire Preferred or Reserve be more rewarding?
- Points earned on the Sapphire Preferred can be redeemed for 1.25 cents each towards the cost of a travel purchase
- Points earned on the Sapphire Reserve can be redeemed for 1.5 cents each towards the cost of a travel purchase
In other words:
- With the Sapphire Preferred you get a return of 2.5% on dining and travel, and 1.25% on other purchases
- With the Sapphire Reserve you get a return of 4.5% on dining and travel, and 1.5% on other purchases
In my opinion you can get more value out of Ultimate Rewards points by transferring them to an airline or hotel partner, though the reality is that this isn’t how many (probably most?) people redeem their points. Given that Stephanie currently uses the Barclaycard Arrival® Plus World Elite Mastercard® (which is essentially a cash back travel card), I’m going to assume she’s seeking those kinds of rewards, so we’ll do the math based on that.
I’m actually surprised to be writing this, but as I do the math, I’m not convinced that the Chase Sapphire Preferred® Card or Chase Sapphire Reserve® Card would be a better option if the goal is to use a single card and maximize cash back travel rewards. Getting a ~2.1% return on the Barclaycard Arrival Plus seems more compelling than getting a return of 1.25% on everyday spend and ~2.5% on dining and travel, and given the higher annual fee of the Sapphire Reserve, I’m not sure she’d come out ahead there either.
How much better could you do with two credit cards?
Just for giggles, I think it’s worth mentioning that there are circumstances under which Stephanie would come out way ahead with the Chase Sapphire Reserve® Card if she were willing to get a second card. I’ve written in the past about the best credit card duo for maximizing points. The Chase Freedom Unlimited® has no annual fee and offers 1.5x points on everyday purchases, and if you have it in conjunction with the Chase Sapphire Reserve® Card, then you could convert those points into Ultimate Rewards points. If you had both of those cards you’d earn 3x points on dining and travel, and 1.5x points on everything else, and each point could be redeemed for 1.5 cents towards the cost of a travel purchase. That translates to a return of:
- 4.5% on dining and travel
- 2.25% on everything else
That’s an incredible return to get on your credit card spend, and to me it absolutely makes it worth complicating your credit card strategy slightly and picking up a second card. However, I understand that some people place a big premium on simplicity, and only want one card.
If you just want straight travel cash back rewards and only want a single credit card, then I think the Barclaycard Arrival® Plus World Elite Mastercard® is a great option (especially if you don’t spend a disproportionate amount of money on dining and travel). I’m actually surprised to come to that conclusion, given that I generally think that the Chase Sapphire Preferred® Card and Chase Sapphire Reserve® Card are near “one size fits all” products.
However, if Stephanie were willing to complicate her credit card strategy slightly, and get the Freedom Unlimited in addition to the Sapphire, then I think picking up the Chase Sapphire Reserve® Card becomes a no brainer.
Does anyone have a different take on this than I do?