Reader Question: Is It Time To Switch Credit Cards?

Filed Under: Advice, Credit Cards
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Reader Chris L. asked the following question in the Ask Lucky forum:

I hold a MileagePlus Explorer card from Chase, and today I received my letter about the upcoming benefits changes slated for 1 June. I also received an offer for a Delta branded Amex (Gold?) card, offering 60K miles after spending $1K in “eligible purchases” in the first three months. ($0 introductory, $95 annually thereafter.) I currently have about 85K miles banked with United. I don’t get to fly that much – a couple of trips to Europe (mostly the UK) every year, and an occasional flight elsewhere. Is it time to switch from United to Delta?

I’m guessing that to many readers, the below advice will be pretty obvious, so by all means skip this post if you’d like. However, I get questions along these lines all the time. People generally seem to assume:

  • Because they mostly fly one airline, they should have the credit card from that airline
  • If that credit card isn’t as good as it used to be, they should switch to another airline credit card

This advice hopefully goes beyond Chris’ specific issue — a vast majority of people shouldn’t be using an airline credit card for their everyday spend. You can easily get a card that’s more rewarding and also offers more flexibility without paying a higher annual fee.

I think Chris is largely right to want to ditch the United Explorer Card, but the solution isn’t to get a co-branded Delta Card. In these situations I try to give pretty specific advice so I don’t overwhelm people, and I think there’s a pretty easy solution here.

Does the Chase Sapphire Preferred make sense?

In my opinion Chris’ best bet here is to get the Chase Sapphire Preferred® Card. He can earn more points for his spend, and most importantly, earn points that are more flexible. Here’s how:

  • The Chase Sapphire Preferred offers double points on dining and travel, which is a better rewards structure than United’s card offers

The other benefit of the Chase Sapphire Preferred® Card isn’t just that you’re earning more points, but also you’re earning more valuable points. Chase Ultimate Rewards points can be transferred to any Ultimate Rewards airline or hotel partner. So you can continue to transfer those points to United MileagePlus if you’d like, though you can also transfer those points to other useful partners, like Air France KLM Flying Blue, Singapore KrisFlyer, World of Hyatt, and more.

The flexibility goes beyond that. Redeeming miles can be complicated at times, so rather than converting those points into airline miles or hotel points, you can just use the points as cash towards the cost of a ticket, at the rate of 1.25 cents per point. That’s not something you’d be able to do if earning United miles directly.

To me this is an absolute no brainer. For more on this card, see this post.

Also consider the Chase Sapphire Reserve

The Chase Sapphire Reserve® Card was introduced just under two years ago and has been extremely popular, as it’s the premium version of the Chase Sapphire Preferred® Card. I don’t want to overwhelm Chris here, and also don’t want there to be any sticker shock, because the card has a $550 annual fee. However, I think it could be well worth it in his case. What differentiates the Chase Sapphire Reserve® Card?

  • It offers a $300 annual travel credit that will automatically be applied towards any travel purchase
  • It offers triple points on dining and travel (rather than double points)
  • In addition to being able to transfer points to the same partners, you can redeem points for 1.5 cents each towards the cost of a travel purchase (rather than 1.25 cents each)
  • You’ll get a Priority Pass membership with unlimited guesting privileges, meaning you’ll have access to over a thousand lounges around the world

The $300 travel credit should more or less be worth face value to anyone who has the card, meaning the real out of pocket for the card is $250 per year ($550 minus $300), or $155 per year higher than the Sapphire Preferred. For that I think it can make a lot of sense to pick up the Chase Sapphire Reserve® Card so that you earn triple points, get a Priority Pass membership, and earn more valuable points.

For more on this card, see this post.

Bottom line

Navigating the credit card world can be complicated, and it’s only natural to assume that if you usually fly a particular airline that you’re best off having that credit card. However, I’d argue that’s usually not the case, especially when it comes to maximizing the value you get out of credit card spend. Nowadays the best way to earn points with a credit card is to use a card earning transferable points. Not only do these cards often award points at a faster rate than airline cards, but the miles themselves are also more valuable.

If Chris just wants a card with the same annual fee he’s paying now that’s better, then I recommend going for the Chase Sapphire Preferred® Card. If he’s willing to spring for a card that will cost him slightly more (while the annual fee is $550 you do earn a $300 travel credit, so I view the real cost of this card as being $250 per year), then the Chase Sapphire Reserve® Card would really help with not only earning as many points as possible, but with making those points as valuable as possible. The lounge access is the icing on the cake.

Does anyone have different advice for Chris in this situation?

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Comments
  1. Chris states that he doesn’t travel much, so beyond the first year wouldn’t he be better off with Citi Double Cash instead of a travel card like Chase Sapphire Preferred? 2% cashback would be worth more to me than unbonused Chase points sitting in an account, likely requiring hours of research to be used effectively.

  2. I keep my explorer card around just for the two United Cluh passes that I can use when traveling with family and friends (good deal to me for $95). Wouldn’t suggest getting any of the Delta AMEX cards due to the bonus because the 60,000 miles are with significantly less than either of the Chase Sapphire cards.

  3. One thing to note is that after the changes to the MileagePlus Explorer benefits you also get double points on restaurants and hotels (as well as flights). I imagine those categories are a bit narrower than the Chase Sapphire equivalents, but it does remove some of that advantage.

    Of course that huge signup bonus is hard to turn down.

  4. @TomD Yeah I think Lucky should provide more details on the MileagePlus Explorer for comparison. It’s a much more competitive card after 6/1/18 when the new benefits kick in. I’m keeping mine (and I have a CSR).

  5. Are the same changes coming to the BUSINESS version of the United MP Explorer card?
    I’ve only seen references to changes coming to the PERSONAL version of that card.
    Thanks.

  6. @Jim Agreed, although to be honest I need it for the PQD waiver anyway so an easy decision for the first $25k for me anyway.

    @Aldo The letter specifically states these changes are only for the personal card. But I’m not really sure why they wouldn’t change the business version to match at some point. Unless its popular enough that they don’t feel the need to be more generous?

  7. One benefit to not discount from the Delta card is the free checked bag and boarding in zone 1. Traveling with my family, we easily get the annual fee back from a single trip.
    That said, I rarely put any spend on my Delta card, other than perhaps a drink onboard.

  8. If you dont fly often enough to qualify for a frequent flyer tier, but more than twice a year, the airline credit card is worth it due to the free bags + priority boarding

  9. I wouldn’t drop the United Explorer Card because of the extra award space available. At that point, either the Citi DoubleCash or CSP would be a good addition.

  10. @Daniel Hennessy, he says he travels a few times a year to Europe. Definitely not a road warrior, but he could still benefit from a points card. If he mostly flies United, the free checked bag and earlier boarding could be useful. If he isn’t loyal to an airline, he can still get more out of Chase’s convertible points by transferring to their partners.

  11. I’d be careful with the Delta AMEX cards if you’ve got a redemption in mind to be used soon…I completed my spend requirements in October on the platinum card and am STILL waiting to receive my bonus miles and $100 statement credit. I’ve been in contact with them every month for updates, and every time I get the same runaround. Finally, a customer service agent was honest with me and explained that due to a “glitch” in their system, AMEX has had to manually credit over a million customers with the bonus miles and statement credits, so it’s taking them an exorbitant amount of time to get this done.

  12. cap one venture visa beats all 2 points for every purchase, any airline, any ti e and you get mikes for buying the ticket which you can use towards a free flight.

    i have a small business and charge EVERYTHING..EVERYTHING, EVERYTHING.

    then i pay the card every week. never paid a cent in fin charges in my life and everyone takes visa.

    as for a delta card..oh what a pile of garbage that is. more blackout dates and no avail seats on most flights..UNLESS …OF COURSE THERE IS A CATCH…YOU CAN GET A SEAT JUST USE MORE MILES DELTA IS HORRID. AVOID LIKE THE PLAGUE. THEY ARE BIGGEST RIPOFF GOING.

    last year i flew emeriates business class from cape town to dubai..3 day layover and Dubai to Jfk. ticket cost $2950 i got 5900 miles for buying flight, redemed my mikes and flight cost was $000.00

  13. I only fly about twice a year, and since I have no status, I keep my UA Explorer card for the extra award space available, the free checked bag (if I need to check one), the 2 lounge passes (for when I’m flying economy), primary car rental insurance, and next month, it will cover Global Entry fee, so when it’s time to renew, my DH’s CSR will cover his fee and my UA card will cover mine. Since we fly UA or other Star Alliance partners way more than Delta, it’s worth the $95.

  14. I took Lucky’s advice and got the Chase Sapphire about 3 weeks ago. Just booked 3 flights LAX to Seattle for my husband and sons using the bonus points. Booked the flights on American so also get the miles. I loved the interface for flight purchases better than a lot of the airline mileage awards sites. This is significantly better than having an airline card. I’m a convert. Thanks Lucky!

  15. QUESTION – We had the Chase Freedom for over 10 years, but want to switch to Chase Sapphire Reserve. Chase claims we cannot receive the 50K bonus as we’re existing customers. Is that true??? I thought the 5/24 rule meant we were OK?

  16. @ Gina Mak — You’re absolutely eligible for the bonus if you don’t yet have any Sapphire Card, but rather just have the Freedom Card. Let us know if you have any other questions. 🙂

  17. @lucky – Just the response I’m looking for! Is there any website that says we should be eligible? The rep on the phone claims that we are not… If we can’t work this out, what’s the next best credit card for dining and travel? THANK YOU FOR YOUR HELP!

  18. @ Gina Mak — The application itself says it. See here:
    https://onemileatatime.com/go/sapphire-reserve/

    When you look at the rules, you’ll see the following:
    “The product is not available to either (i) current cardmembers of any Sapphire credit card, or (ii) previous cardmembers of any Sapphire credit card who received a new cardmember bonus within the last 24 months. If you are an existing Sapphire customer and would like this product, please call the number on the back of your card to see if you are eligible for a product change. You will not receive the new cardmember bonus if you change products.”

    As you can see, this specifically says that only Sapphire cardmembers are excluded, and not those who had other cards. I can promise with 100% certainty you’re eligible for the bonus if you don’t currently have any Sapphire Card, and haven’t had one in the past 24 months.

  19. @trabellover – if you think the venture is the best card than there’s not much to say to you other than why are you reading this blog. It’s a glorified 2% cash back card. Get the citi double cash and save yourself the AF.

  20. Just to let you know, closing a card and opening a new one will lower your credit score. Something you should think about. Lucky is only interested in getting a commission from the credit card company and doesn’t care about your personal credit. Just look at how many articles here are about getting people to sign up for credit cards. Something for you to think about.

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