I have alluded recently to my next move in the credit card game. Being the millennial that I am, I am never satisfied — I need to own every company I work for, and there is absolutely no way I am paying for any travel. I also intend to sit first class and stay in a presidential suite.
On that note, it has probably been too long since I added another credit card to my arsenal. I have talked about my inventory in other posts, but a quick recap..
The Chase Sapphire Reserve.
I obviously didn’t just jump in with the premier Chase card, but this is the only card I put any spend on. I have the Wells Fargo Visa Signature, and the Delta Gold AMEX — one of which I got to develop credit, and the other to get a hefty sign up bonus. The one thing I knew I needed to do was upgrade my Ultimate Rewards earnings. The one big problem was that this would put me at ‘5’ with Chase’s 5/24 rule, so I’d have to wait till next March to apply again (I have another Wells Fargo card I got in college). So choosing the right card would be crucial.
I have decided that as a young ‘travel hacker’ I need to focus on one rewards program and grow it as large as possible.
I considered the Chase Ink Business Preferred card, but my claim for owning a “business” isn’t totally legitimate — yet.
I considered the Chase Freedom Unlimited but wanted some sort of sign-up bonus.
I considered a co-branded card like Hyatt or Southwest but didn’t want to commit to one brand — and I’ve expressed my waning loyalty to co-branded credit cards.
Then it hit me. It was sitting right in front of me. The Chase Sapphire Preferred. For some reason I thought that since I had the Chase Sapphire Reserve I couldn’t get the Preferred. Ironically, that is true now, but when I applied there was no restriction.
With some incredible luck I had my card. But now the question is, do I keep the Reserve or the Preferred?
If I had waited to apply for the card a week later, I would not have been approved. But I wasn’t — and here we are. I am now in possession of of my Preferred card and hopefully hitting my 50,000 point bonus soon.
But what about after I hit my spend? Once I receive the sign-up bonus, there is really no benefit to having both cards. They both earn on the same categories with the Reserve garnering 3x points versus the Preferred’s 2x. Ultimately the question is whether I want to continue paying the $450 fee and reaping the benefits of the Reserve, or keep the Preferred and only pay $95 (excluding the first year).
And my decision is made. I am going to keep the Reserve. Maybe I have some special connection to the card because it is my first true travel rewards card, but in reality I think the card easily pays for itself. I easily spend $300 in travel, so that puts the annual fee at $150 after the travel credit. At a comparison of $150 vs $95, I see a ton more value in the Reserve. I am able to use the Priority Pass membership quite often, dining and travel is a majority of my spend, and 50% more on Ultimate Rewards can mean huge savings.
I know that I am going to keep the Reserve, but I still have questions about what to do with the Preferred.
Once I hit the minimum spend on my Preferred card I have a big decision to make. (Remember as a millennial we forget about global warming and world hunger, and focus on the important decisions…) I want to downgrade the card so that I am not paying an annual fee, but there are two good options with Chase — the Freedom and Freedom Unlimited. Many talk about the Chase Trifecta — having both Freedom products and either the Reserve or Preferred. So my ultimate goal is to have all three, but right now I am above 5/24 so I cannot apply for another card. But downgrading a card does not count as another “strike” against 5/24.
I need to decide soon though which card brings me the most value, then down the line hopefully add the other. So let’s look at the basics of each card..
The basic difference in the cards is that the Unlimited offers 1.5% cash back on all purchases, while the Freedom offers an incredible 5% back on rotating categories, only up to $1,500 in spend (so a potential of 7,500 points back per quarter — 30,000 per year!). I travel for work, so a majority of my spend is on dining, but besides that is gas, grocery and what I would call miscellaneous spend. If you look at the categories for this year’s Freedom (it tends to remain somewhat constant year to year) it somewhat aligns with my spending habits, but I really do not put close to $1,500 in any one of those categories in a 3 month period. But does that matter, 5% is a big boost?
This is something that I will continue to ponder. I think I know where I am leaning, but I plan to look at my spend over the past few months and calculate the best options, stay tuned.
I am interested to hear other opinions. Is that 5% cash back too good to pass up?