Chase Sapphire Preferred overrated?

[destine2grow]

Fantastic break down! It looks like this card is great with the freedom. I wonder if it's good by itself. That's the problem I am having. I can plan on spending a minimum of 1k a month on the card.

[mongstradamus]

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@destine2grow wrote:
Fantastic break down! It looks like this card is great with the freedom. I wonder if it's good by itself. That's the problem I am having. I can plan on spending a minimum of 1k a month on the card.

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I honestly think if you are only putting 1k it may not be worth while after the signup bonus, I think you need to put like 2500-3k an month min for it to be worthwhile.  I thikn fidelity amex or something with no AF would be better after you get signup bonus. 

[Stralem]

I've gotten sick of the questions that keep coming in about this card as well, but it's not overrated. It has its uses, and many people find that it works for their lifestyle and/or spending habits.

Travel and restaurants are two of my major spending categories, for example, so the CSP has earned a permanent spot in my wallet.

[hiro905]

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@destine2grow wrote:
Fantastic break down! It looks like this card is great with the freedom. I wonder if it's good by itself. That's the problem I am having. I can plan on spending a minimum of 1k a month on the card.

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By it self I think it depends on your spending habits.  Is that 1k on dining and/or travel?

[TheFate]

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@nachoslibres wrote:

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@TheFate wrote:

I know I'm going to hit a soft spot for some folks by asking this but those aren't my intentions.

I'm going thru the benefits of the CSP and honestly don't see why its so popular. Can someone explain this to me?

Not to mention there's a $95 AF so do these benefits make up for that at all? The only thing that looked somewhat beneficial was the 20% off Travel.

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Sure we can explain it.  First, if you are using it to get 20% off travel through the UR portal you are doing it wrong.  Why?  Because when you do this Chase values your UR at $0.0125 per UR.  Why is this bad?  Because this is basically giving you around 1.25% off your transactions that aren't travel or dining out (if we don't consider the 7% dividend you currently get annually on the card).  You could get a better redemption with a QuickSilver at 1.5% or an Amex Fidelity at 2% and both of these cards have no annual fees.

The way you maximize your UR's, and the whole reason why Chase charges an annual fee on this card, is to use the mileage partners (i.e. United, Southwest, Hyatt, etc.).  You transfer your URs in a 1:1 ratio into whatever program you want and depending on how you make it work you can get from $0.02 up to sometimes $0.07/UR (this is if you want to fly first class) when you would have compared it to how much it would have cost if you booked the flight paying cash or credit.

For instance, I just priced a round trip flight on United from where I live to London for my wife and I for $3,808.  Or, instead, I could use 120,000 miles (which I would get from my UR points) to pay for the flight.  If we throw out the fees I'm getting about $0.0317 per UR, which means if I earned all of my URs are the base rate of 1 UR/$ I'm getting 3.17% back.  BUT, I don't ever earn URs at the base rate, I only put charges on my Chase cards when they are bonused.  So the lowest I ever earn URs is 2 UR/$ all the way up to 8 UR/$ so far (using the UR mall).  This means if I were to use my miles for the trip to London I would be earning at minimum 6.24% back (2 * 3.17) all the way up to 24.51% back (8 * 3.17) on my purchases.

At minimum I put $450 a month ($5,400 a year) on my Bold card and all of this spending is bonused at 5 UR/$ - so this is 27,000 UR a year I earn on this card.  I also have a Freedom card which I spend at minimum $500 a month ($6,000 a year) and all of this spending is bonused at 5.5 UR/$ - so this is an additional 33,000 UR a year I earn on this card.  Combine these and I earn at minimum 60,000 UR a year - which if we value a UR at $0.02/UR (but remember I was able to get over $0.03/UR in the example above) - this means I earn $1,200 worth of travel a year, all for an AF of $95.  Take the AF out I really earn $1,105 worth of travel, which is a 9.66% return on the $11,400 annual spend I put on the card.

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Very good breakdown nachoslibres!

With that being said I can see this card being very beneficial to your particular situation. Not so in mine, I don't plan on spending that heavily on 1 card

But this alone post has made me see why its not overrated. Thank you

[hiro905]

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@Stralem wrote:

I've gotten sick of the questions that keep coming in about this card as well, but it's not overrated. It has its uses, and many people find that it works for their lifestyle and/or spending habits.

Travel and restaurants are two of my major spending categories, for example, so the CSP has earned a permanent spot in my wallet.

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I agree with this.  

I think most people pick up the card for its perceived "prestige" and I doubt whether people put enough spending on it to justify the $95 dollar annual fee, but I can understand the cards appeal.  

[destine2grow]

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@mongstradamus wrote:

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@destine2grow wrote:
Fantastic break down! It looks like this card is great with the freedom. I wonder if it's good by itself. That's the problem I am having. I can plan on spending a minimum of 1k a month on the card.

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I honestly think if you are only putting 1k it may not be worth while after the signup bonus, I think you need to put like 2500-3k an month min for it to be worthwhile.  I thikn fidelity amex or something with no AF would be better after you get signup bonus. 

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Thanks for the info Mong. Maybe I can look in to the base saphire. 

[mongstradamus]

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@destine2grow wrote:

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@mongstradamus wrote:

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@destine2grow wrote:
Fantastic break down! It looks like this card is great with the freedom. I wonder if it's good by itself. That's the problem I am having. I can plan on spending a minimum of 1k a month on the card.

---

I honestly think if you are only putting 1k it may not be worth while after the signup bonus, I think you need to put like 2500-3k an month min for it to be worthwhile.  I thikn fidelity amex or something with no AF would be better after you get signup bonus. 

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Thanks for the info Mong. Maybe I can look in to the base saphire. 

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Just keep in mind base sapphire can't transfer to airlines and hotels only CSP/Ink bold can. It would be nearly worthless imo. I would just get an amex fidelity where its 2% no matter what if i were to use an HP . 

[destine2grow]

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@hiro905 wrote:

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@destine2grow wrote:
Fantastic break down! It looks like this card is great with the freedom. I wonder if it's good by itself. That's the problem I am having. I can plan on spending a minimum of 1k a month on the card.

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By it self I think it depends on your spending habits.  Is that 1k on dining and/or travel?

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About half would be on dining and travel would be very rare. Mostly every day purchases it I charged all bills then I could get to a little over 2k but I am not sure if I want this card to be my main cc. I might consider appin for the freedom with it and not getting the discover it. I am new to rewards. I already have the Cap 1 QS.

[longtimelurker]

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@hiro905 wrote:

I agree with this.  

I think most people pick up the card for its perceived "prestige" and I doubt whether people put enough spending on it to justify the $95 dollar annual fee, but I can understand the cards appeal.  

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That's probably true and not just restricted to CSP.  I suspect a lot of people who get the Arrival Plus would be better off with the Fidelity Amex, except, in both cases, for the first year bonus and waived AF, so neither of these are mistakes (unless you forget to cancel after the first year!).   And in the general population, I would add in the "perceived prestige" group, the Amex charge cards.  Probably a lot of people getting them and paying the AF without needing or utilizating the benefits of a charge card.   Here less so, as the cards are used as a gateway to Amex revolvers...