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TravelStrategies:*Chase Unlimited Combo/Table
A good first step is upgrading the credit card you use for most of your purchases.
We highly recommend most people switch to the Chase Freedom Unlimited and the Sapphire Reserve cards to increase the rewards you earn on your credit card spending; as well as gain access to a several valuable travel benefits, such as free access to thousands of airport lounges and "primary" rental car insurance.
Unless you travel a lot for work, it can take a long time to build up a meaningful quantity of travel reward points. But, if you get a good rewards credit card and use it whenever you can, you'll steadily build up larger quantities of points you can use for free hotel nights, free airplane tickets, and other travel expenses.
For most people, the combination of the Chase Freedom Unlimited card and one of the two Chase Sapphire cards (which are designed to work together) provides the most valuable rewards for your spending. And unlike many other cards, the points you earn are very easy to use for free travel.
By simply upgrading your current credit card, you'll earn more valuable rewards over the course of the year—which translates into getting access to more free travel.
Why you need both cards
Our recommendation is to get and use two different cards that are part of Chase's Ultimate Rewards "family". Getting and using two cards make things a little more complicated, but it is worth it. Why do you need two cards?
- The Chase Freedom Unlimited card earns extra points on everyday purchases. While some cards earn bonus rewards on certain categories of purchases, like gas or groceries, much of your credit card spending doesn't fall into these categories. The Freedom Unlimited card earns 1.5 Ultimate Rewards points per dollar on every purchase, regardless of category. All other Chase cards (except the nearly identical Ink Unlimited card for small businesses) only earn 1 point per dollar on basic spending.
- One of the Chase Sapphire cards is needed to unlock the full value from your points and comes with its own set of valuable benefits. Without a Chase Sapphire card (or the small business Ink Preferred card), you won't get full value from the points of earn. Your Ultimate Rewards points are only worth 1 cent each.
But, if you have any one of these three additional cards, you unlock the ability to transfer your points to a dozen different frequent flyer programs (and book award tickets on almost 100 different airlines), get high point values on free nights at Hyatt hotels, or get more than 1 cent each when you use them to purchase any sort of travel on the Chase website. This makes your points far more valuable than if you only had the Freedom Unlimited card.
Your Ultimate Rewards points can instantly be moved between different card "accounts", so once you have either of the Sapphire cards (or the Ink Preferred card), all your points become more valuable; even the points you earn from other Chase Ultimate Rewards cards, such as the Freedom Unlimited card.
- To recap, you need the Freedom Unlimited card to get the higher point earning rate on everyday purchases, and you need one of the other three cards to get full value from the points you earn.
- Despite its higher cost, we recommend getting the Sapphire Reserve over the Sapphire Preferred card. It comes with a great set of extra travel benefits and very high reward rates on Travel and Restaurant spending. If you don't feel you are getting enough value from the Sapphire Reserve, you can always switch to the less-expensive Sapphire Preferred after your initial year.
Benefits of upgrading your existing credit card to these two cards
We highly recommend that you make the effort to switch over to the "Chase Unlimited combo". You'll reap the benefits for years to come.
- The Freedom Unlimited and Sapphire cards earn valuable and easy-to-use Ultimate Rewards points—the best type of credit card points for most travelers. Ultimate Rewards points offer the best combination of flexibility, value, and ease of redemption. As discussed in more detail below, the are far more valuable than regular frequent flyer miles and considerably easier to use than American Express' similar Membership Rewards points. When you use both Chase cards in combination, you'll generally earn rewards that are comparable or better than even the best cash back cards, while having the upside for even more valuable airfare and hotel awards.
- For most people, the Freedom Unlimited card is the most valuable general-purpose reward card. Some credit cards earn more valuable rewards on specific category of purchases, such as gas or groceries; and some people could conceivably earn better rewards with one of your advanced options. But, for most people, the Freedom Unlimited card is the most valuable option. You'll receive 1.5x Ultimate Rewards points on every purchase. When used like cash, this can be the same as a 2.25% cashback card. When used for award travel, the reward rate is equivalent to about 2.5 to 5% back.
- The Sapphire cards earns even better rewards on your travel and restaurant purchases. The more-expensive Sapphire Reserve version earns 3x Ultimate Rewards points on these two important spending categories, worth a minimum of 4.5%, and more typically worth 5 to 8% per dollar. The less-expensive Sapphire Preferred version earns 2x points, worth a minimum of 2.5%, and more typically worth 3.5 to 6%.
- The Sapphire Reserve provides free access to over a 1,000 airport lounges. It entitles you to a free Priority Pass Select membership that provides access to airport lounges located all around the world, for you and up to 2 guests. While you won't have access to the most luxurious airport lounges around, and there won't always be a lounge in the same terminal you'll be using, you'll often be able to spend the time waiting for your flight in comfortable chairs—enjoying free drinks and snacks, high-speed Wi-Fi, and abundant power outlets. For more details, see:
- When you use your Sapphire Reserve for travel purchases, you'll not only receive a great reward rate, you'll get the best free travel insurance benefits of any card. The Sapphire Reserve is one of the few cards that offers "primary" rental car coverage. Unlike most other credit cards, if you damage your rental car, you don't need to involve your personal auto insurance company.
You'll also get free lost and delayed baggage insurance, free trip cancellation and interruption insurance, and free flight delay coverage, when you use the card to pay for any portion of your flights. For more details, see:
The cheaper Sapphire Preferred version still provides primary rental car coverage and extensive travel insurance benefits, but has lower coverage maximums and longer waiter periods before the delay coverage kicks in.
- The Sapphire Reserve even provides free towing and roadside assistance and a number of other "premium card" benefits. For roadside assistance, Chase will pay $50 to cover the cost of towing, jump starts, etc. (up to $200 per year). You just need to call 855-860-7978.
Some other benefits include a $100 credit for Global Entry / TSA Precheck fees (every 4 years), access to valuable extra perks via Chase's Luxury Hotel and Resort Collection, and an upgrade to National Emerald Club Executive status.
- You'll receive 65,000 Ultimate Rewards points just for signing up for the cards (and meeting the minimum spending requirement). If you spend $500 in the first three months with the Freedom Unlimited card, you'll earn 15,000 bonus points (the offers will say "$150", but you'll actually receive 15,000 points). Then, when you spend $4,000 with the Sapphire Reserve card you'll earn another 50,000 points. To make meeting the spending requirements easier, get one card first, and then once you've earned the signup bonus, get the other card.
65,000 Ultimate Rewards points can be used like $975 in cash, is more than enough for a free flight to Europe or 2.5 flights within the United States, or could be redeemed for 5 to 8 nights at a downtown Hyatt hotel (in many major cities).
More details about the Ultimate Rewards program
Chase operates its own reward program called Ultimate Rewards. Due to its lucrative reward rates and extreme flexibility, this program is usually the best option for your credit card rewards. It is better than earning cashback, frequent flyer miles, or other types of credit card points.
- You can use your Ultimate Rewards points, like cash, to make a wide variety of travel purchases. When you purchase travel through Chase, you can use your points at 1.5 cents each (with the Sapphire Reserve) or 1.25 cents each (with the Sapphire Preferred). The Chase travel website is powered by a slightly pared-down version Expedia, so you can easily use your points to make airfare, hotel, and other travel reservations. Buying airplane tickets is a particularly good option, because the same fares and terms are usually the same everywhere. (If you frequently fly Southwest, you don't need to worry. You also have the option to get about the same value per point by transferring your points to Southwest Airlines's reward program.)
- You can frequently get even better value by using your Ultimate Rewards points for free Hyatt "award" nights. Ultimate Rewards allows you to instantly "transfer" your points to the Hyatt reward program, where you can use them for "free" hotel nights. For example, you could transfer 8,000 Ultimate Rewards points to Hyatt to book an award night at a nice Hyatt hotel, where the room rate might be $160 for a regular reservation. In this example, you'd be getting 2 cents in value for your points.
On many trips, you'll have good opportunities to get 1.75 to 2.5 cents or more per Ultimate Rewards point when you use them via the Hyatt program. When hotel prices are sky high for holidays and special events, having a stash of points you can use for hotel rooms is extremely valuable. For example, hotels in Hawaii, Ski Resorts, and Times Square require the same number of points during Christmas break or New Years Eve as they do every other day of the year. And you don't have to worry about black out dates and availability. If a standard room is available, you can always book it with points.
- You can also transfer your points to any of a number of different frequent flyer programs to use for award tickets. Through these programs, you can book frequent flyer tickets on almost 100 airlines. For example, you can transfer your points directly to United to redeem for a flight on United or Lufthansa; or you can transfer to Air France to use for flight on Delta or Korean. For more details, see:
Truthfully, it is often frustrating and time consuming to find good opportunities to use frequent flyer miles, especially if you don't have a lot of flexibility with your travel dates and locations. However, when you do find an opportunity to book an award ticket, your can receive a lot of value from using your Ultimate Rewards points, dramatically reducing the total cost of a trip. And, if you're interested in booking a lie-flat business or first class seat on an international flight, frequent flyer miles are often the only reasonable option.
- If you decide to use your points for frequent flyer tickets, Ultimate Rewards points are usually much better than earning any specific type of frequent flyer miles, because you can use them with whichever of the dozen different programs works best for any given trip. That opens up more availability and, in many cases, allows you to choose a program that has a lower award cost or fees. Why earn United miles when your Ultimate Rewards points can be converted into United miles, but can also be converted into a dozen of other types of airline miles and hotel nights, or simply used as cash, if you can't find award space?
- Ultimate Rewards provides the ease-of-use of cashback, with the potential of a higher upside on free hotel nights and airplane tickets. For now, you don't need to worry about exactly what you'll do with your points. Just start earning as many Ultimate Rewards points as possible. In the worst case, you can get good value by using them to purchase travel through Chase. But, as you learn more about travel reward programs, you'll probably get more value by transferring them to partners to book award travel.
- Amex's Membership Rewards is also a very good program, but points can be hard to use. The only way to get good value from your Membership Rewards points is to redeem them for frequent flyer tickets. But, navigating the different frequent flyer programs and finding good award opportunities can be challenging. Unless you are, or are willing to become an expert, we recommend starting out with Chase Ultimate Rewards points.
Annual fees
The Freedom Unlimited card doesn't have an annual fee, but the annual fee for the Sapphire Reserve is a massive $550. Before you get scared away by the fee, you need to know that the real out-of-pocket cost is much lower:
- The Sapphire Reserve comes with a $300 travel credit. In other words, you don't have to pay for the first $300 of travel spending you make each year. The credit works on any kind of travel purchase, and works automatically without requiring any action on your part—any travel purchases just get taken off your bill until you've hit the $300 limit. Since, you'll be naturally using this card for all your travel spending, you should easily be able to take full advantage of the credit, dropping your out-of-pocket expense to a more manageable $250 per year.
- The Sapphire Reserve also comes with $60 of automatic credits for Door Dash you can use use in 2020, and another $60 to use in 2021. Like the travel credit, the credits will be automatically taken off your bill just by using the card to make the purchase. You'll also get a complimentary membership to DoorDash's free delivery program. Depending on how much you expect to order from Door Dash, these credits can offset another $120 per year of the annual fee.
- The rewards you earn from the Sapphire Reserve's Travel and Restaurant categories add up fast. For example, for every $1,000 per year you spend in these categories, you'd earn an extra $17.50 in rewards compared to Chase's $95-per-year Sapphire Preferred card. Spend $5,000-10,000 per year between these categories, and you'll earn enough in extra rewards to make up any difference in out-of-pocket costs between the cards.
If you don't put much value on the airport lounge access, don't spend much money on travel and restaurants, and/or won't get much value out of the Door Dash credits, Chase's Sapphire Preferred card may be a better option. If your credit isn't great, it may also be the only option you can get approved for. It only costs $95 per year.
Besides the airport lounge benefit and the higher travel and restaurant rewards, you are only giving up the roadside assistance coverage, the Door Dash and Lyft benefits, the TSA credit, and some minor travel and purchase benefit differences.
Almost never use cash—earn rewards instead
Your goal is to collect as many rewards as you can. That means that you should use your reward credit cards whenever possible, rather than paying with cash, a debit card, or a check. Start putting everything on your cards, and your rewards will build up quickly.
- Every time you use cash, a check, or your bank card (when you could have used your credit card), you are missing out on reward points. Each individual transaction may not seem like much, but it adds up over time.
- Using a credit card, instead of cash, has some other benefits as well. You’ll have better records of your spending, build up your credit history, and make fewer trips to the ATM (paying less in ATM fees). In addition, your credit card will often give you some protection if something you buy breaks, is stolen, or even drops in price.
- While we strongly recommend using your credit card for as much of your spending as possible, you don’t have to take it to an extreme. If you are making a small purchase, and paying cash will speed up the process for everyone, don’t worry about a few cents worth of points. If you are under the store’s minimum for taking credit cards, don’t make a fuss, just pay with cash. And you usually don’t want to use your credit card with any business that will add on an extra "convenience" fee.
- Many of the bills that you pay each month can be paid with a credit card, rather than with a check or automatic bank withdrawal. For example, pretty much every wireless and cable company accepts credit card payments, as do many utilities, insurance companies, and gyms. Go back over a few months of bank statements, and see who you are paying on a regular basis. Then check which of these companies you can switch over to a credit card (without extra fees).
TravelStrategies:*Chase Unlimited Combo/Main
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