Earning Free Travel With These Three Chase Cards
Earning Points / / Feb 23, 2016
Until recently, Chase has been the #1 bank for people who are looking to rack up free travel by opening new cards for their massive signup bonuses. This recently became of the case when Chase came out with a rule that people in the space are calling the 5/24 rule. This rule essentially means that Chase will not allow you to open any new lines of credit with them once you have opened 5 new lines of credit with ANY bank in the 24 months prior to application. This is a devastating blow to people playing this game because Chase offers so many great cards with extremely lucrative signup bonuses.
There are many data points that show that Chase may be enforcing this more selectively than they publicly let on, but in the interest of strategy it should be assumed that this is accurate so you can plan your applications accordingly. There are no other known lenders at the time of publication with a similar application filter so if you’re new to the game you should consider opening the Chase set of cards before moving onto cards from other lenders.
Let’s take a high level look at what Chase offers in terms of cards, earning strategies and redemption options:
Chase, like most lenders, offer their cards in two flavors, consumer and business. The cards they issue to each type of borrower is different based on their classification into one of the above types. Instead of covering all cards they offer, I’ll be focused on covering my favorites and why.
This card is extremely straightforward and one every beginner should have in their wallet. This card offers you the ability to earn 1 point on every dollar you spend and 5 points per dollar when you are spending on a category that earns a bonus. These bonus categories are set quarterly and you have to register for them before you start earning at the accelerated rate. The categories tend to vary, here you can see the bonus calendar for 2016:
The quarterly bonuses typically cap out at $1,500 in spend, netting you 7,500 points as opposed to the 1,500 you would have typically earned if you manage to max out that spend.
Chase will sometimes offer a limited time promo outside of their normal earnings calendar. For example, at the end of 2015, they offered 10 points per dollar spent on Amazon up to $1,500.
This card comes with NO annual fee – ever. You can open this card and keep it in your wallet or in a drawer somewhere and only use it when you’re earning 5% back and it won’t cost you anything! At the time of writing, this card is offering $150 cash back (15,000 points) if you spend $500 on it over 3 months. That’s a walk in the park even for a beginner.
You’ll notice that on any Chase collateral about the Chase Freedom Card they refer to it as a cash-back card and make it reasonably clear that it is earning at the flat rate of 1 cent per dollar or 5 cents per dollar as opposed to 1 and 5 points respectively. So why do I keep converting all of the earning potential of the card into points?
When you have the Freedom card you are technically only able to redeem for cash-back or gift cards at the rate of 1 point = 1 cent. However, the real fun of this card comes into play when you transfer those points into Ultimate Rewards, something you’re not able to do if you only have the Freedom card in your Chase account. Transferring the points to Ultimate Rewards and then transferring them to travel partners will make the points tremendously more valuable, meaning you’re in essence earning well over 1-5 cents per dollar spent.
How do you manage to transfer those points into Ultimate Rewards if your Freedom card alone doesn’t let you do so? That brings us to our next card.
Chase Sapphire Preferred:
I love this card so much more than I ever realized I would and I’m confident you will too. The Sapphire Preferred earns 1 point per dollar on all purchases the same way the Freedom does, though it offers 2 points per dollar on any travel or restaurant related expenses. There’s no limit on the 2 points per dollar on these bonus categories and they’re year round so if you like to dine out or book a lot of travel this is an amazing card to have in your wallet.
The Sapphire Preferred comes with a $95 annual fee, which is waived for the first year the card is open. Opening the card and spending $4,000 over the first 3 months you have it open will earn you a whopping 50,000 points. If you have a significant other or someone you trust tremendously, you can add them as an authorized user of the card where they will get their own card to charge expenses to your account. Adding this user will bring in another 5,000 points. Assuming you have that person in your life, this is an absolute breeze to earn 55,000 points.
So here’s the most important part of why this card needs to be in your stack, especially if you have the Freedom card. The Chase Sapphire Preferred is a card that will let you redeem the points you earn on it through what’s called Chase Ultimate Rewards. The Ultimate Rewards portal is where you transfer points, often in a 1:1 ratio, to hotel or airline specific rewards programs for redemption with that brand.
The reason this is so valuable is that these partners redemption options typically let you cash in your points in their program of well over 1 penny per point. On the LOW end is one of my absolute favorite redemption options, Southwest, which typically values a point at 1.67 cents per point. For argument’s sake this is what I’ll typically use as a baseline when I’m discussing how much Ultimate Rewards points are work, although this is the absolute lowest redemption option I have found when using a transfer partner.
On the higher end of the spectrum, you can transfer the points to Singapore’s KrisFlyer program and if you redeem the points on First / Suites class travel, you’re looking at a redemption rate upwards of 4 cents per point. See the potential?
Now, when you have both the Chase Freedom and Chase Sapphire Preferred in the same Chase online account you get an incredible new option. You’ll have the option to transfer points you’ve accumulated on the Freedom into your Sapphire Preferred account which will let you transfer them to the Ultimate Rewards partners. (You can technically transfer them from the Sapphire Preferred to the Freedom but there’s no upside to doing this.)
Chase Ink Plus for Business:
This card is specifically slated for businesses and if you want to apply for one you’ll have to be prepared to give information about your business to get approved. No business? Usually this isn’t a problem as long as you conduct some type of business activities you can explain this and get the card for those purposes (for example, if you run an Etsy shop, sell on eBay, do any type of consulting, etc.) I’ll put together a full post down the line that will explain how to get approved for a business card even if you don’t believe you run a business but for now, here’s a high level overview of the benefits of this card.
The card comes with a $95 annual fee which is not waived for the first year. The signup bonus is a whopping 60,000 points once you spend $5,000 on the card within three months of open. By the conservative estimate of 1.67 cents per point, is worth over $1,000 in travel just for opening and spending on this card.
This card, like all others here, earns 1 point per dollar on all spend but also offers some incredibly generous category bonuses that make it extremely valuable to have in your stack.
The first bonus category is office supplies and phone/internet/tv service. Any dollar you charge to the card, up to $50,000 per year combined will be rewarded with a whopping 5 points per dollar. Even if you don’t think you spend that much at office supply stores, I’ll explain later how to shift some of your everyday spend so it is billed as taking place at an office supply store and nets you the full 5 points per dollar.
The second bonus category is 2 points per dollar spent at gas stations and hotels, also capped at $50,000 per year in spend. If you drive, this is a really easy way to earn a ton of miles from filling up at the pump.
Over the next few weeks I’ll flesh out dedicated posts about each of these cards and some of my favorite Ultimate Rewards transfer partners.