Why I Don’t Prefer Chase Sapphire Preferred

To Amex SPG, that is. I have already touched upon the fact that Chase Sapphire Preferred (or CSP for short) is probably not the best choice for most middle-class families in America HERE   and    HERE

Don’t get me wrong, the sign-up bonus is great and worth the inquiry. You can read more about it in my “Best credit card deals for family” page. Full disclosure: Both Chase Sapphire Preferred and Amex Starwood Preferred Guest cards pay me commission when you apply through my site.

I hear very often how CSP is absolutely worth renewing and paying 95 dollars each year. And I just saw it mentioned again in “View from the wing” post HERE how  it is overall best choice for most people if you just want one card. Since the site got 1 million unique visitors last year, I’m sure some of them were average Joes and Janes like myself.

I said before that I welcome a good challenge! So, let’s ignore the fact that over 50 percent of US population will do better with Amex Blue Cash Preferred and Sallie Mae Barclaycard and assume the author was talking about those, who are after flexible points instead of cash back.

I simply have to disagree that the notion of Chase Sapphire Preferred being the “one”  holds true for low spenders. The annual fee is the giant elephant in the room and there is no way of ignoring it. Last week I mentioned how sometimes it makes sense to collect flexible points instead of cash back. So, once again, let’s make  a comparison to Amex SPG:

1) How widely is the card accepted? CSP wins hands down. Amex is still not accepted in few places.

2) How do the annual fees compare? Amex has 65 dollar fee while CSP has 95 dollars. Amex wins.

3) Which card offers better protection and benefits? Amex wins. Occasionally they offer extra transfer bonus on your miles on top of the one you get on 20000 points. Plus Amex runs promotions constantly which can potentially make up for the fee. CSP offers travel insurance but its not comprehensive IMO to make it all that worthwhile.

4) How easy is it to redeem the points? SPG partners with many airlines but none guarantee availability. Plus, transfers are not instant. But you can redeem for hotels if needed. CSP Ultimate Rewards transfer to Southwest where you are guaranteed to be able to use the points. So, this one IMO is a tie.

5) How much value does one point get? I already declared  Amex SPG a winner over Southwest point in my prior comparison. So that leaves British Airways Avios program. Because of 5000 miles bonus with every 20000 miles transfer SPG card provides better value. Also, CSP does not have any hotel programs that would even come close to SPG lowest categories(2000 and 3000 points per night on weekends). Amex wins.

6) How easy is it to earn the points?  Ultimate Rewards can be earned from Chase INK or Bold cards. SPG point can only be earned from Amex SPG cards other  than staying in their hotels. SPG point is harder to acquire= more valuable. IMO it also makes SPG point less likely to devalue. Amex wins.

7) Can the points transfer to cash? You can redeem 15000 Ultimate Rewards for 150 dollar credit. 14000 SPG points convert to 150 dollar Amazon gift card. Since the best  discount you can find for that retailer is 5 percent off, IMO SPG wins here as well.

8) How do the fees compare when making airline redemptions? CSP wins because of Southwest option. Currently that airline does not charge for checked bags and you cancel tickets close to departure and get your points back.

9) When it comes to family friendly redemption options, how many choices are there? This one is probably  a tie. For CSP it would be Avios, Southwest, and for some Amtrak and United. For Amex it would be Avios, AAdvantage, low category hotels and possibly Lufthansa for 12000 one-way redemptions on United.

10) How much does the point cost? Ultimate Rewards point costs 2.75 cents each and SPG point 3.5 cents. SPG point is more expensive, which means CSP wins. 

Originally, I pegged Amex as the winner but Gary Leff made a good argument so I changed it.  See my explanation in the comments below on why. I have decided to remove that point from my previous comparisons because most of the time buying points is not a good value proposition.

11) How does the earning structure compare? That’s where CSP shines. It give 2 points for dining and travel purchases and has no Forex fee.  Plus it gives 7 percent dividend on your yearly spending. Amex only gives 1 point on everything but SPG hotels and charges Forex fee. CSP wins.

Amex SPG is the overall winner, beating CSP 5 to 4. Here is my final conclusion. Yes, Ultimate Rewards are valuable as well as flexible. But it’s very hard for me to justify paying 95 dollars per year for the privilege of having flexibility. Especially for low spenders. While transfers are instant, you don’t get any bonus. Unlike Amex, Chase does not run any promotions like the recent discounts on Amazon purchases and Small Business Saturday.

If you are mostly after Avios miles, Amex IMO may be a better choice. Even though the transfers are not instant, you get a  bonus on each 20000 points plus an ability to redeem for low category hotels. And if you are mostly after Rapid Rewards, you would be better off to go with Chase Southwest Visa, which gives 6000 points upon renewal. Since they just announced devaluation, your points should be fine for the next few years. Or better yet, go with Fidelity Amex that earns 2 percent on everything, which would beat Southwest Visa any day.

There are a few instances where CSP might make sense. That is if you have to fly certain United or American(bookable with Avios) routes, which are very expensive with cash but affordable with miles. Or if you regularly use Amtrak, where point redemptions provide good value. If your plans are not flexible and you insist on instant transfers that can  make an argument for CSP.

Also, you may consider CSP if you spend a good amount on dining and travel which I would argue does not describe most regular families. But that would offset the annual fee significantly. Though overall, if you are after flexible points in this game, IMO Amex SPG is the winner. For my family CSP is simply NOT the best thing since sliced bread.

P.S. You may  also want to read this post on the newly introduced Amex cards and how they stack up compared to CSP card.

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Picture credit goes to adityaviyer.com

15 thoughts on “Why I Don’t Prefer Chase Sapphire Preferred

  1. There are some arguments here that simply make no sense — Starwood charges more to buy SPG points, and that translates into the value proposition of the SPG Amex how exactly? It’s a complete non-sequitur.

    The SPG Amex is a great card, I have carried it for more than a dozen years.

    Starwood points also have far more airline transfer partners.

    But there are five real strengths of the Chase Sapphire Preferred that you ignore, and one relative strength of the Starwood program that also bears mentioning.

    For Chase:
    * Earning power. The Chase Sapphire Preferred earns double points on all travel and dining. SPG Amex bonuses only Starwood spending.
    * No foreign currency transaction fees.
    * 7% annual bonus on points earned.
    * POINTS TRANSFER INSTANTLY IN MOST CASES TO PARTNERS. Compare that to SPG Amex where transfers can take days or WEEKS.
    * No daily transfer limit, compared to SPG where they won’t post more than 99,999 miles per day but de facto you don’t want to transfer more than 60000 to maximize bonuses.

    For SPG:
    * 25% bonus when transferring SPG points into 20,000 miles.

    I’d also take issue that Chase doesn’t partner with any hotel programs whose redemptions are as good as Starwood’s, Hyatt has a very strong award chart and certainly for pricier redemptions Hyatt better options. The lowest point prices aren’t inherently the ones that best match ‘families’ either — aspirational resorts can be low priced in points (because they are in inexpensive but far flung parts of the world) while basic hotels can be high priced in points (because they are in expensive cities). If a family wants to go to New York, the price of hotels in points is going to be high — and SPG isn’t really better than Hyatt here even on a 1:1 basis… but the CSP is better for these since CSP earns points at a faster rate.

    These are both good products, it’s worth analyzing the benefits as they apply to each person’s situation, but if there is one card that is simple and earns quickly and is accepted everywhere… a good intro card.. I still suggest CSP.

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  2. First, thanks so much for taking the time out of your busy schedule and commenting here! To be honest, I don’t think either card is the best choice for most middle class families, the fact I mentioned at the beginning of the post. My pick would be Sallie Mae Barclaycard as the “one”, since its accepted everywhere.
    As far as SPG point being more expensive to purchase, you may be right. I added it, because sometimes a person may need to top off an account to get a specific reward. But IMO Amex would beat CSP card even without it.
    Also, I did mention the 25 percent bonus in my third point. Thats actually one of the reasons I think SPG card is superior. They also ran a 20 percent bonus on Avios transfers not too long ago, which was on top of the 25 percent built-in bonus.
    Hyatts are great, but not for family like mine. We usually get 2 or 3 rooms, because we travel with in-laws. Which is why we usually get a condo or rental on VRBO. But you can’t argue with 2000 or 3000 points redemptions through SPG program. No other hotel program comes close.
    But back to CSP being the “one”. I just don’t see how it can make sense for most low spenders. That 95 dollar fee will eat a god chunk of your rewards value. By comparison, Sallie Mae card can get you more than 2 percent back with no annual fee. There is no question, that CSP is a good card, but it mostly makes sense for high spenders who are after premium redemptions and yes, Hyatts. Not that there there is anything wrong with that!

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  3. If you included SPG points purchase ‘because sometimes you need to buy points to top off’ then that would suggest their being more expensive would be an argument AGAINST SPG not for it.

    I’d say that if you don’t redeem for Hyatts, and just want to travel in domestic coach, it’s hard to beat the no fee Fidelity Investment Rewards American Express 2% cash back card.

    If you want international trave, CSP as the simple intro card wins.

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  4. Actually, once I wrote about purchasing SPG point, I thought the same thing! 🙂 My logic is a bit convoluted, but here it goes. Basically, lets assume you have Amex SPG and are thinking about switching to CSP card. In case you need to make an SPG redemption in the future and are short on points, you will have to buy them at an expensive rate. So it may be best to stick to Amex SPG card and put all your “eggs” in that basket. But, yeah, you kind of got me there, I admit! I tend to overcomplicate things.
    As far as Fidelity Amex, I think its a good choice for average families. But as you brought out, it may not be accepted everywhere, therefore Sallie Mae recommendation. And don’t get me wrong, I think CSP is a great card, just not for people like me. Though as I mentioned in my post, it can make sense for some regular families, especially on short BA routes and Amtrak. But its an exception rather than the rule. Thanks for your comment, I truly appreciate it.

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  5. I guess it really depends on how the individual uses it. For families, the key to these annual fee cards is how can you justify the value proposition of keeping it every year. Is the flexibility worth that annual fee? What happens after 1 year is up and I deem the value proposition isn’t there anymore? What if I do not want to redeem all the points I have accumulated. For CSP, you can park it with a no annual fee card like Freedom. For AMEX, there isn’t a choice unless you switch back and forth the personal and business version every year which might not be a bad thing as you can get the sign up bonus again. I personally have no preference for either and kept both for just a year and cancelled it. I always have the option through Chase ink cards or other AMEX MR cards that replaces most airline programs that I’m interested in. As always, individual preferences differ and my philosophy has always been to apply for as many products as I can knowing full well that no debt will be incurred doing it.

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  6. @Kenny Thanks for stopping by! Looks like there was a duplicate comment created. Yes, I always stress that each person needs to assess the value proposition for themselves. Its impossible to recommend that “perfect” card for everyone. And actually I believe CSP can make sense even for some low spenders. But it probably would be an exception rather than the rule.
    I just constantly see in this industry that renewing CSP is a no-brainer, how its worth 95 dollars and then some. And I simply disagree on that. As far as SPG points, there is always an option to redeem for Amazon gift card if needed. Not ideal, but its there.
    And I agree with you, the best value is achieved from signing up for different cards and collecting bonuses along the way. Thats all I do at the moment. So I will be canceling my Amex SPG, so at some point I can sign up for it again and get another bonus.
    Occasionally I do these type of posts for those who can’t churn for whatever reason. I think its helpful to compare the programs. IMO for middle class family SPG Amex is the winner, though with some drawbacks.

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  7. I love grudge matches like this! CSP vs. Amex SPG. I’ll thrown in my $.02 here as well.

    CSP Negatives:

    1) Almost all of the benefits of CSP most people throw around are not CSP benefits, but rather UR benefits. Transfer partners: UR benefit. Hyatt for hotels, UR Benenfit. Southwest: UR Benefit. The only two real CSP benefits are travel insurance and 2x on travel/dining.

    2) For Avios travel CSP (except maybe for someone with high travel spending) is inferior to an Amex PRG (2MR at grocery) or even the Chase BA Visa (1.25 per $1) for earning Avios. UR -> Avios is 1:1, MR->Avios is now 1:1.2 and has been 1:1.5 or higher.

    3) Chase ruined the 7% dividend. Also a Chase Freedom with Checking Exclusives a 10% bonus, better than the CSP’s 7% as well.

    SPG has its issues too:

    1) SPG Foreign Transaction Fee: Seriously the #1 issue that bugs me with this card. When my 5 year old Capital One Visa (which collects dust) is owning you in a category it is time to get with the program Amex.

    2) Using SPG for airline miles is a terrible idea as well—the program offers it as a feature, but the transfers can take far too long. If you argue that the card is good for airline miles, then the signup bonus is weak; can’t argue the 25/30k signup bonus is a great deal if you then convert those SPG into airline miles. A 30k/35k airline mile signup bonus is cool at best.

    3) My biggest issue with an SPG branded card is that you’re tied to SPG Branded hotels. If you find yourself wanting to book something else those hard earned SPG points will collect dust. This is true of any program, but the cache that SPG points hold mean people think they’re the solution to all travel problems, when they’re not.

    CSP: In almost all cases the card is worth keeping until the 7% dividend hits, and then downgrading to a Freedom. For a comparison use the calculator here: http://first2board.com/milenomics/chase-freedom-vs-chase-sapphire-preferred/ Once you run the numbers it is hard to argue that 2.14x on travel is worth keeping @ $95 a year vs. Freedom @$0 a year. Add a second Freedom and the numbers get worse for the CSP.

    SPG Amex: Sits at home when you travel outside the US. This negates the bonus SPG points for most non-US stays. Also should stick to using the points for SPG hotels where they sometimes offer wonderful deals and sometimes terrible ones.

    Should either card be our “go-to” card? I don’t think so—but if you had to make me choose one or the other I’d go with the SPG Amex. CSP duplicates too much that other cards like the Freedom Do too well for $0 a year (5x UR in bonus categories, 10% bonus for checking). If you’re going to pay $95 just to transfer out to airlines/hotels the Ink Bold is probably the best UR card for that.

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  8. @ Sam from Milenomics Thanks so much for commenting! Actually, I agree with you on almost all points. SPG Amex is not my go-to card either, but I would choose it over CSP. And yes, Forex fee and lack of instant transfers are huge drawbacks as far as SPG card is concerned. But my target reader is a regular family that rarely travels out of the country, so its not so much of an issue. Also I assume they have some flexibility as to their travel plans.
    Actually there are some good SPG Category 2 hotel options, like in Orlando, where many families like to vacation.
    As far as Avios, I would not go with BA visa. Too risky when (not if) devaluation hits. And you are correct as far as Gold card being superior in some cases when it comes to Avios. I actually did a comparison between it and SPG last week.
    I think Avios and possibly Amtrak are the only programs that could make a good case for flexible points vs. cash back when it comes to low spenders. But to each his own, I guess. Thanks again for stopping by. Yours is the second blog I check, right after “View from the wing”! 🙂

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  9. Did you know that you get the sign-up bonus twice? There is also a Mastercard version of the Chase Sapphire Preferred Card. You just have to close your Visa card. This can be done during reconsideration. I love Chase!

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  10. @ Mightytravels Thanks so much for stopping by and for interviewing me!
    As far as CSP goes, yes, I knew about the Mastercard version and actually got it myself before to double dip. I need to look into it to see if it still works.Thanks!

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  11. Pingback: Are Opportunity Cost and Your Subconscious Hurting Your Bottom Line? | Milenomics

  12. I’d rebuttal points 4, 6, and 7, due to a few related points (pun intended :o) ).

    “4) How easy is it to redeem the points? SPG partners with many airlines but none guarantee availability. Plus, transfers are not instant. But you can redeem for hotels if needed. CSP Ultimate Rewards transfer to Southwest where you are guaranteed to be able to use the points. So, this one IMO is a tie.”

    I’d argue CSP URs are infinitely “easier” to redeem (keeping in mind separating ease of redemption with value of redemption in Point 5). With CSP, there are less transfer partners than SPG, but the transfers are generally instantaneous (or take a few hours at most). The combination of partners also allows one to book with all three of the major alliance networks (OneWorld via British Airways, Star Alliance via United, and SkyTeam via Korean Airways) as well as Southwest; pretty hard to find comparable flexibility elsewhere. If one doesn’t find a good award mile flight worth transferring points to (which can especially disappear while waiting for SPG transfers to post) but wants to get more than 1 cent/point value, URs can be redeemed at a 20% discount (e.g. $500 flight for 40K points instead of 50K). Lastly, one can also easily redeem for cash with as low as 2000 points for $20, so you always have 1 cent/point value. Being pegged into an Amazon GC isn’t that great (even though one can basically run their house off Amazon purchases these days). So I argue that the “ease of redemption” is definitely in CSP’s favor because there are multiple ways to redeem, fairly low thresholds (for cash redemption), and the individual can choose what is the best redemption value for him/her.

    “6) How easy is it to earn the points? Ultimate Rewards can be earned from Chase INK or Bold cards. SPG point can only be earned from Amex SPG cards other than staying in their hotels. SPG point is harder to acquire= more valuable. IMO it also makes SPG point less likely to devalue. Amex wins.”

    The conclusion here is actually in contradiction to the question; if it’s “harder to acquire,” how can it be “easy to earn”? If anything, with the CSP, people can frequently pair it with a Freedom and dovetail purchase categories (if you have both, all Freedom points are considered premium with the CSP’s URs), thereby greatly increasing point accumulation faster than SPG. With SPG, one can almost never earn more than 1 pt/dollar unless he/she stays at SPG hotels a lot, which frankly isn’t true of most middle-class families. Lastly, and this is minor, but if SPG is less accepted than CSP due to the network(s) (Point 1), it’s “easier” to earn via CSP, Again, this is in CPS’s favor.

    “7) Can the points transfer to cash? You can redeem 15000 Ultimate Rewards for 150 dollar credit. 14000 SPG points convert to 150 dollar Amazon gift card. Since the best discount you can find for that retailer is 5 percent off, IMO SPG wins here as well.”

    As mentioned in the Point 4 rebuttal above, URs can be redeemed directly for cash rather than a GC tied to a retailer, even if that retailer is Amazon. Also, redemption thresholds are lower. CSP wins.

    I appreciate your overall article, and it does give me some things to consider as I look to get an AMEX, as I’ve generally heard good things about the SPG (including that it’s the card many AMEX employees have themselves). I have had the CSP for over a year, and generally like it, though I wish I could get more bonus category spending in other categories (I’m looking hard at the Blue Cash Preferred for the huge grocery bonus). All that to say, hope my comment doesn’t sound nit-picky, just wanted to highlight some “points” that may have been missed ;o).

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    • SD, thanks so much for stopping by! I love a good rebuttal, so you are welcome to do it any time. Honestly, you do make some valid points and I don’t disagree with the fact that CSP/Freedom creates a powerful combination if you are looking for United miles or Amtrak points. In fact, I even mentioned it in my list of best 2 card combo picks for family.

      Not so for Avios, not anymore. Interestingly, there was a new development with the introduction of Amex Everyday Preferred card, which trumps all the other flexible points earning cards IMO. There is a link to more on it at the end of my post, so I suggest you read it.

      However, I still maintain that if given a choice between SPG Amex or CSP card, I would pick SPG card. For me personally it’s due to the fact that you can redeem for quite a few hotels, that go for 2000 or 3000 points. That’s only $2000 or $3000 in spending, and you can have a night at the hotel that goes for upwards of $100 per night. Not too bad.
      Also the fee is lower and you can almost certainly make up for it with different Amex promotions. The same can not be said about CSP card. It’s true, there are many advantages to that card, but the giant fee and lack of low-cost hotel redemptions or transfer bonuses kills the deal for a regular family. Don’t get me wrong, it’s a good card for high spenders, no question.
      I suggest, you look at the list of best long-term cards in this post http://milesforfamily.com/2013/07/08/the-best-keeper-credit-cards-for-family-right-now/

      Honestly, the best strategy for a middle-class family is to just go after sign-up bonuses continuously. You get the best bang for your buck this way.
      Thanks for taking the time and please comment again.

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