I HAVE BOOKED eight one-way domestic flights this year, as well as multiple hotel nights—and I’ve done it all with the rewards points from my three Chase credit cards.
For those interested in earning rewards, you can’t go wrong with the dependable duo of Chase Sapphire Reserve and Chase Freedom Unlimited. Small business owners might also pick up Chase Ink Business Preferred.
The Chase Sapphire Reserve, the “premium” card of the trio, first made waves in August 2016 when it offered a 100,000-point signup bonus for those who spent $4,000 in the first three months. While that bonus has since dropped to 50,000 points, it’s still a worthwhile card. The annual fee is $450, but there’s a $300 annual travel credit that is automatically applied to your account, effectively reducing the fee to $150.
On top of the signup bonus, Sapphire Reserve offers other benefits. You earn triple points on all travel and dining spending. When redeeming points on Chase’s rewards portal, you also get 50% more value for each point. For example, your 50,000 point bonus would technically be worth $750 when redeemed through Chase’s Ultimate Rewards portal. Sapphire Reserve also offers a $100 credit when you apply for TSA PreCheck or Global Entry.
The Points Guy, a popular website, generally values Chase Ultimate Rewards points at 2.1 cents each. That means 300 points from a $100 travel or dining purchase is valued at $6.30. Not bad. Ignoring the signup bonus, that means you’d have to spend about $2,380 on travel and dining a year, or $198 per month, to cover the $150 annual fee. Everything beyond that is gravy.
The next card you should pick up is Chase Freedom Unlimited. While Sapphire Reserve gets triple points on travel and dining spending, and one point per dollar on all other spending, Freedom Unlimited gives you 1.5 points on every purchase. Result: You’ll want to use Freedom Unlimited for all spending, except travel and dining.
One added benefit of coupling Freedom Unlimited with Sapphire Reserve: You can transfer your Freedom Unlimited points to your Sapphire Reserve card, earning that 50% bonus when redeeming points through the Ultimate Rewards portal. Chase Freedom Unlimited has no annual fee, and also offers a $150 signup bonus after spending $500 in your first three months.
The last card of the trio, Chase Ink Business Preferred, only applies to small business owners. Since freelancers now account for 35% of workers, I think it’s worth mentioning. Ink Business Preferred comes with a whopping 80,000 point bonus when you spend $5,000 in the first three months. The card also offers triple points on a range of business purchases, including travel, shipping purchases, internet, cable, phone services, and advertising spends on social media and search engine sites. The card has a $95 annual fee, but the signup bonus and rewards quickly cover the cost.
What can you do with all these Chase points? You could either use them to book hotel rooms and flights directly through Chase’s rewards portal or transfer them to a long list of partners. Generally, transferring to rewards partners like British Airways, Hyatt or United Airlines is considered the best way to maximize value, according to The Points Guy. But with the 50% bonus when redeeming through the Ultimate Rewards portal, I’d recommend shopping around before deciding how to redeem points.
After picking up these three cards, you can take your rewards strategy in whatever direction makes sense for you. The Points Guy has plenty of lists of top credit cards, depending on whether you prefer cash back, hotel nights or airline tickets. Signup bonuses are the biggest opportunity to pile up points, so consider signing up for one or two new credit cards each year to keep your rewards points topped up.
Steven Aguiar’s previous blogs include Site Seeing (Part I) and Small Changes, Big Dollars. Steve is the founder of BlueWing, a B2B digital marketing agency. He majored in Economics and Hispanic Studies at Brown, and is a big fan of compounding interest.
Limited time offer: Get the audiobook version of Jonathan Clements's "How to Think About Money" at the special pre-release price of $12—a 40% savings. For more information, click here.