Chase Ultimate Rewards – My favorite program for earning and redeeming points

Anna-Lisa and I have been having a great time so far on our trip!  We’ve had some great experiences we’ve written about recently which you may have missed, such as our magical evening at the Chiang Mai Lantern Festival.   If you want to make sure you don’t miss any of our posts, you can subscribe on the top right to get an email every time we post.

One of my main goals for this site is to help others learn how they too can build up a cache of frequent flyer miles and hotel points to use for traveling.  All of our recent posts have been more about our trip and what we’ve done on it, so today I’m going to spend some time telling you about Chase Ultimate Rewards, my favorite program for collecting points.  The reason I like Chase Ultimate Rewards so much is twofold.  First, Chase offers multiple credit cards to sign up for which earn Ultimate Rewards.  You can actually get a signup bonus for each type of card, and you can pool the total points collected together.  Second, Ultimate Rewards (UR) points can be redeemed in a large variety of ways, including:

View of the many redemption options for Chase Ultimate Rewards

1. Straight up for cash:   1 UR point = 1 cent.  This is simple and sweet (but not recommended if you want to maximize the value of the points)

2. Shopping: Chase has an online mall where you can exchange your hard earned points for computers, giftcards, and a slew of other options (please don’t use this option ever! The best value I’ve seen is 1UR=1 cent, and usually its worse than that).

3. Chase Experiences: Want to overpay to play golf with a pro for the day, or snowboard with an Olympian? Then this option might be for you.

Night View of the Grand Hyatt Dubai

4. Travel: 1 UR point = 1.25 cents if for any airline, hotel, or auto rental done through their portal.  So far, this is the best option for maximizing the value of the points. IF you only plan to get the Chase Freedom Card, this will be the option you’ll want to use.

5. Points Transfers to Chase Partners: I’ve saved the best option for last.  If you have a Chase Sapphire Preferred and/or Chase Ink Bold or Plus card, then you are given the ability to transfer your points 1 for 1 to any of 10 different airline, hotel, and rail partners.  By far the best transfer options are United Airlines, Southwest Airlines, British Airlines, and Hyatt Hotels.  Each of their miles/points are worth at least 1.5 cents/point, and if you are smart with your redemptions it’s possible to get 2 cents or more worth of value.

As an example, while in Dubai we spent a couple nights at the Grand Hyatt Dubai.  A room here typically costs $300+ a night, but we were redeem to use 15,000 UR points per night to stay free of charge.  This equates to a value per UR point of about 2 cents.

The Chase Ultimate Rewards credit card options

Chase offers three flavors of cards which each earn Ultimate Rewards points in different ways.   Both the Chase Freedom card and the Chase Sapphire Preferred cards currently have the best offer I’ve seen available on them in over a year, so this is a great time to apply for the cards if you are interested in them!

Chase Freedom

This is a great first card to apply for if you don’t have amazing credit (see my post about getting started if you need to learn how to check your credit) and are just getting started with credit cards.  The rotating 5% categories which change every three months mean that you can build up a nice amount of extra points on regular spending.  The points also become more valuable if you also have a Sapphire Preferred or Ink card, since you can transfer your points to either of their Ultimate Rewards accounts and then redeem for partner travel.  By itself, your best redemptions would be for cash or to book travel at 1.25cents/point.  However, I suggest saving up any points you build up with this card until you are able to sign up for the Sapphire Preferred or Ink card.

Some card highlights:

• You would likely be accepted with a credit score of at least 675, and possibly as low as 650 (based on information from successful applications on CreditKarma.com)
• Currently 20,000 bonus points for signing up and then spending $500 within 3 months (usually bonus is only 10,000).  20,000 can be used for $200 cash rebate or $250 in travel credit.  Or save the points as I mentioned above.
• $0 annual fee
• Rotating 5 points/dollar categories for up to $1500 spend per quarter (currently Amazon.com and some other retailers)
• 1 point/dollar on all spending

Chase Sapphire Preferred

This was one of the first cards I signed up for when I started collecting points, and I highly recommend getting it right away if your credit score is high enough.  As noted above, all the UR points you earn with the card can be transferred to partners such as United and Southwest airlines. I highly recommend only redeeming your points by transferring to United, Southwest, Hyatt or British Airways in order to maximize your value.  The only negative is the annual fee, but it is waived the first year.  There are actually two versions of the card currently available.  The normal version only offers 40,000 bonus points, with a lower annual fee of $95.

Some card highlights:

• You will likely need a credit score of at least 700 (if not even 10 to 20 points higher) to be accepted
• Currently 50,000 bonus points for signing up and then spending $3,000 within 3 months (usually bonus is only 40,000).
• There is also an extra 5,000 bonus for adding an authorized user.  (I recommend adding a loved one and then cutting up the card with their name when it arrives, unless you actually want it)
• $125 annual fee, but waived the 1st year
• 2 points/dollar on all travel and dining spending (this makes this card a great option for regular daily spending)
• 1 point/dollar on all spending

Chase Ink Plus Business

Once you’ve been approved for the Sapphire Preferred, I would suggest that you apply for this card as well (assuming you are sure you’ll be able to meet the spend requirement to complete the bonus).  Anyone with a business can apply for this card.  Have you sold something on Ebay in the past? Then you have a business.  Many people assume that because they don’t own a company with employees, they can’t apply for business cards.  With that thinking, you are leaving a lot of points on the table.  Simply apply as a sole proprietor and use your social security number when asked for your Tax ID.  As an example, I was approved last year when my business income from my new consulting business was only a couple hundred dollars.  One word of caution about business cards; they don’t have the same protections as consumer cards, so make sure only to use them at reputable locations.

Some card highlights:

• You will again likely need a credit score of at least 700 (if not even 10 to 20 points higher) to be accepted
• Currently 50,000 bonus points for signing up and then spending $3,000 within 3 months (usually bonus is only 40,000).
• $125 annual fee, but waived the 1st year
• 2 points/dollar on all travel and dining spending (this makes this card a great option for regular daily spending)
• 1 point/dollar on all spending

Some Strategy Discussion

Now that I’ve given you the basics of each of these cards, here are some thoughts on how to maximize the benefits.

• Chase typically only accepts one application per month, but if you do a 2nd one and call their reconsideration line, they may approve you for the 2nd card if you can give them a good reason to need both (for example, if you apply for a business card at the same time as a personal card, its because you want to keep your business expenses separate).  Once you get accepted, they don’t care what expenses you put on the cards as long as you pay them off.
• If you get accepted for the Sapphire Preferred and the Freedom card, once you make the spend requirements to collect your bonuses you’ll have close to 75,000 UR points.  If you transfer to United, thats more than enough points for a round trip to Europe or South America.  Or three round trips in the United States.
• Make sure to sign up for the United mileage program right away if you aren’t already a member.  Chase also has a United miles credit card which usually offers 30,000 mile bonus for signing up, but sometimes members get an offer for a 50,000 mile bonus (I got one a few months ago).  Wait to get one of those before signing up.  If you manage to combine that offer with the three Ultimate Rewards card bonuses over a period of 6 months, now suddenly you have over 125,000 miles and lots of options for places to go.
• If you have a significant other, ideally both of you will have decent to good credit.  You can then both apply for each offer, so that you both accumulate the same amount of points.  That way you’ll have twice the points.  This also becomes very useful once you start applying for hotel cards, since in effect you’ll be able to get twice as many free nights.
• For some people, especially students, it will be challenging to spend enough money to meet the bonus requirements.  DON’T sign up for a card unless you are certain you can meet the requirements.  If you can’t just wait for later.  That said, here is an excellent post from one of my favorite bloggers, MillionMileSecrets, on 40 ways to meet your spend.

This is just the start, but should give you a good idea of what to consider.  I would love to answer any questions any of you might have.  We will be off the grid for a couple days on a short trip to Laos, but will be back on Friday.

Finally, if you enjoyed this post, feel free to share it with your friends.  I would love for more people to be able to travel more.