If you’re going to use a credit card when you travel, why not use a travel rewards card like the Chase Sapphire Preferred? Travel rewards cards let you earn points towards free travel while taking advantage of awesome travel perks. But, these cards come with one significant drawback – an annual fee.
The annual fee on the Sapphire Preferred card is $95, but the card comes with some decent perks like travel insurance and hotel credit each year. But is that enough?
We’ll take a look at all of the card’s features plus the possible point-earning ability and compare it to the annual fee to determine if the Chase Sapphire Preferred card is worth forking over an annual fee.
1. Quick Card Facts
The Sapphire Preferred card is Chase's base travel card, which allows you to use the Chase Ultimate Rewards program. This program is among the best-known names in the travel rewards community for its versatility and high point values.
Opening the Sapphire Preferred card, you’ll be able to earn points on travel purchases as well as other purchases, and you’ll get access to various travel benefits and other perks. Here are the basic terms for the Sapphire Preferred card.
APR: 21.49%–28.49%
Annual Fee: $95
Authorized Users: Free
Sign-up Bonus: 60,000 points with $4k spend in 3 months
Point Earning: 1X – 5X
Notable Features: earn 3X points on groceries plus receive 1-year complimentary DashPass
2. What Are the Benefits of the Chase Sapphire Preferred?
The Sapphire Preferred card is mainly a travel rewards card with most benefits geared towards earning points, redeeming travel credit, and utilizing travel perks. But, there are also additional card features that are beneficial outside of travel. Here are all of the Sapphire Preferred card’s features.
- 60,000 point sign-up bonus
- Up to 5X earning rate
- $50 annual hotel credit
- 10% point bonus each year
- No foreign transaction fees
- Travel protection and insurance
- No-fee point transfer to airline and hotel loyalty programs
- Points never expire
- 12 months of Dash Pass
- 6 months of Instacart+
- $15 quarterly Instacart credit (expires July 2024)
- Chase Pay Over Time
- Purchase protection
Now, let’s take a closer look at the key features of the Chase Sapphire Preferred card.
Sign-Up Bonus
When you sign up for the Sapphire Preferred card, you’ll get a bonus of 60,000 points when you spend $4,000 in the first 3 months. This bonus is worth a minimum of $600 when redeemed for statement credit and potentially twice that when redeemed for travel.
This sign-up bonus alone more than makes up for the $95 annual fee. That’s enough to pay the annual fee for the first six years you have the card.
Anniversary Gift
As a part of your annual fee, Chase rewards Sapphire Preferred cardholders a $50 hotel credit each year on their card anniversary. This credit can be applied to any hotel bookings made through Chase Travel. This credit alone covers half the value of the annual fee.
In addition to the hotel credit, you’ll get a 10% point bonus each year based on your spending. So, if you charged $20,000 to the card this year, you’d get a 2,000-point bonus next year.
Dining Rewards
One of the biggest benefits of the Sapphire Rewards card is the high reward rate for food. For all dining and online grocery purchases, you’ll earn 3X points. This includes dining in a restaurant, takeout, food delivery services like Uber Eats, online orders from grocery stores like Kroger, and grocery delivery services like Instacart.
In addition to the boosted rewards, the Sapphire Preferred card also offers several food-related perks, including complimentary subscriptions to DashPass and Instacart+. The DashPass alone is worth $120, more than the first year’s annual fee.
3. Earning & Redeeming Points with the Chase Sapphire Preferred
When evaluating whether or not a card is worth the annual fee, especially in the long term, it’s necessary to consider how easy or difficult it is to earn and use reward points. Let’s take a quick look at how you can earn and redeem points with the Sapphire Preferred card.
Earning Points
The Sapphire Preferred card has multiple point-earning categories, including
- 5X – travel purchased through Chase Travel
- 5X – on Lyft rides (through 03/2025)
- 3X – dining, takeout, and food delivery
- 3X – grocery delivery
- 3X – streaming services
- 2X – travel not booked on Chase Travel
- 1X – everything else
In addition to the above earning rates, you’ll earn a 10% spend bonus each year on your card anniversary. So, if you spent $30,000 on your card in one year, you’d get a 3,000-point bonus on your anniversary.
To reach $95 in value, you’d need to earn at least 9,500 points each year. To put that into perspective, that would be $1,900 spent on ChaseTravel and Lyft or $3167 spent on dining out, grocery delivery, and streaming services. Considering the average household spends $300/month on takeout and even more on groceries, hitting the spend needed to earn that 9,500 points seems relatively easy.
Redeeming Points
The Chase Ultimate Rewards program offers several options for redeeming your hard-earned points.
Chase’s recommendation is to use them to book travel through Chase Travel. This guarantees you a rate redemption of 1.25 cents a point. So, booking a hotel stay for $150 would only cost you 12,000 points. You’d only need to earn 7,600 points at this valuation to compensate for the annual fee.
You could easily see an even higher point valuation if you can find a good deal with one of Chase’s partner airlines or hotels, possibly up to and exceeding 2 cents/point. That would mean 5,000 points could be worth $100 in travel.
You can also redeem points for statement credit, gift cards, shopping, and more at a 1:1 valuation.
4. Chase Sapphire Preferred Pairings
To get even more value out of your Chase Sapphire Preferred card, consider pairing it with other Chase cards and/or co-branded reward cards.
For instance, the Freedom card with a $0 annual fee lets you earn 1.5X on all purchases, which is a better rate than the 1X of the Sapphire Preferred. This can help boost your point earnings without adding anything to your annual fee.
Another good credit card combo would be a co-branded airline or hotel card, especially when focusing on one of Chase’s transfer partners. For instance, the Marriott Bonvoy card lets you earn 17X points on Marriott stays. While you’d have to pay a separate annual fee for the Marriott card, combining your Marriott points and Chase Ultimate Rewards points can increase the likelihood of finding high-value rewards.
5. $95 Fee – Is the Chase Sapphire Preferred Card Worth It?
The real question comes down to value. Short-term, the sign-up bonus more than makes up for the annual fee. You could get the card and close it a few years later to avoid paying the annual fee and never really being out-of-pocket.
In the long term, you have to weigh the fee versus the benefits. The anniversary gift alone is worth $50. This means that to get full value, you only need to earn $45 worth of points each year. This 4,500 is easy to achieve if you are using bonus categories. Alternatively, using the travel insurance just once will make up for a few years' worth of annual fees.
Considering how easy it is to make up for the cost of the annual fee, the Chase Sapphire card seems more than worth the $95 annual fee.
