Tag Archives: chase

Now, even the NYTimes is writing about the CSR…

You know it’s bad when even mainstream media outlets like the New York Times are writing about a credit card and the buzz it’s generating. (In full disclosure, I applied and was approved for a Chase Sapphire Reserve card)

All I’ll say right now is that you should get on the gravy train while it lasts. The CSR offers some ridiculous value with the 3x points on travel and dining and 1.5 cent redemption rate, which essentially means 4.5% back on those categories. I don’t see that rate of cash back as sustainable over the long run. If you think that something is too good to last, it probably is.

In recent years, one prominent example was the Club Carlson credit cards. 5x earning plus 1 night free on any award stay, and you could book two award stays back-to-back with a personal and business card to get 4 nights for the price of 2 award nights. Ridiculous value, so it got gutted.

More recently, the Citi Prestige credit card offered 1.6 cents back when buying American Airlines flights. If you had an old Citi Forward card, that meant 8% back on dining. They quickly gutted the Citi Forward. But the Citi Prestige card still meant 4.8% back on travel and 3.2% back on dining by itself, but they’ve lowered that to 1.25 cents per point. And of course there was the wonderful Admirals Club access (with guests), but that benefit is going away too.

Granted, there’s no ancillary benefit that I see as unsustainable with the Chase Sapphire Reserve (like the Admirals Club access afforded by the Citi Prestige), so maybe I’m wrong. Priority Pass membership really isn’t that useful unless you live in the Northwest (and have access to Alaska Airlines Board Rooms) or travel internationally, so I don’t think most cardholders will use it that much. But a 100k bonus is quite tempting, especially for a relatively low minimum spend requirement.

2016 Changes (Devaluations) to Chase Freedom Rewards with Chase Checking Account

This morning, I got an email detailing changes coming to Ultimate Rewards for people with Chase Checking and Chase Freedom accounts. I have both: the Chase Freedom was my second rewards credit card ever, and I got a Chase checking account last year to get a sign-up bonus.

Essentially, there will no longer be a benefit to having a Chase checking account in addition to a Chase Freedom. No more extra 10% per $1 spent, and no more 10 bonus points for every purchase.

Screenshot of the email that I got this morning

Screenshot of the email that I got this morning

I’m not sure how decreasing points earning meets my evolving needs as a customer, particularly as my need for points increases over time, but at least they’re giving a very lengthy advanced notice of the changes.

This doesn’t materially change much for me, except for the fact that I’ll now definitely be canceling my Chase checking account since I currently have to keep a $1500 minimum balance to avoid monthly fees (seriously, who pays checking fees nowadays?). The 10% bonus was nice but not that meaningful, although it did mean that the Chase Freedom was a better card for earning on unbonused spend than the Chase Sapphire Preferred.

The extra 10 points per transaction, however, was/is awesome and potentially very lucrative, although there are reports of people getting shut down for abusing it. But as an example, you can buy an Amazon gift card for a minimum value of 50 cents. At a conservative valuation of 1.25 cents per point, that’s like getting 25% back on Amazon transactions. Or if you prefer cash back and don’t spend much on Amazon (like me), you can pay 3 cents to charge $1 through a certain mobile reader and earn roughly 9 cents per swipe. Not that I’m necessarily recommending either of these avenues.

Fun Facts from the Chase Sapphire Preferred Guide to Benefits

I wrote previously about the newly enhanced benefits of the Chase Sapphire Preferred card, but I thought I’d today share some of the more interesting tidbits from the Guide to Benefits.

1. Trip cancellation insurance applies if a terrorist action or hijacking cancels your trip, but not if your trip is cancelled due to declared on undeclared war.

2. For trip cancellation insurance, if part of your trip was paid for using redeemable rewards, the “reimbursement shall equal the monetary value of the redemption”. If no monetary value exists on the itinerary or redemption confirmation, then the reimbursement will only be for $0.01 per point redeemed. That’s a pretty bad redemption rate!

3. Lost luggage insurance and baggage delay insurance apply provided that “some portion of the fare for transportation has been charged to your Account issued by Chase” or if “free flights have been awarded from frequent flier or Rewards programs, provided that all of the miles or Rewards points were accumulated from a Rewards program sponsored by Chase”. I wonder how they can verify the latter part if you have sufficient United mileage but also transfer sufficient Ultimate Rewards points into United miles before booking an award ticket.

4. Similarly, trip delay reimbursement applies “when a portion or the entire cost of the Common Carrier fare is purchased with your Chase credit card”, so you don’t have to pay for your whole trip with your CSP for the benefit to kick in.

5. For travel accident insurance, there are different payout amounts depending on the severity of the accident. Here’s the table:

Screen Shot 2013-09-19 at 10.03.16 PM

Should You Keep the Chase Sapphire Preferred Past the First Year?

The Chase Sapphire Preferred was the first miles/points credit card that I ever applied for. And I still recommend it as a great intro card for people looking to get into the miles and points game. The sign-up bonus of 40,000 Ultimate Rewards points and waived first-year annual fee is one of the best sign-up bonuses out there, and it’s a personal credit card, so you don’t need to pretend to have a business (which many people I’ve talked to are uncomfortable about). But should you keep the card around past year 1 and pay the $95 annual fee?

Overall, I think the Chase Sapphire Preferred is one of the most solid, well-rounded credit cards out there. Ultimate Rewards points are worth roughly 2 cents each to me because they can be transferred 1:1 to both United and Hyatt instantaneously (the instant transfer part is key so you don’t have to worry about losing award availability while waiting for the transfer to happen), and UR points are relatively easy to accumulate in meaningful quantities, so you actually have enough points to redeem for aspirational awards. This means that even on non-bonused spend, the CSP is roughly equivalent to a 2% cash back card for me (or that it’s about as good as you can get on non-bonused spend anyway; I know some people will disagree with this).

But the CSP also offers double points on dining and travel, which makes it better than pretty much any typical 2% cash back card for me. As I previously wrote, about 90% of my discretionary spending is spent on dining and travel, so I’m almost always getting 2x UR points on my spend. There are also no foreign transaction fees on this card (normally 3% on other credit cards), and it’s a VISA card which is widely accepted, so this is a card that accompanies me on nearly every trip.

Finally, the Chase Sapphire Preferred offers a large number of good credit card benefits that most people don’t know about. I detailed some of the recently enhanced benefits, but other useful things are trip delay insurance, trip cancellation insurance, baggage delay insurance, lost luggage insurance, return protection, and price protection. Because of these benefits, I generally prefer to pay for trips using my CSP over other credit cards, all else being equal.

So should you pay the annual fee? If you’re not actively involved in credit card applications (i.e. applying for multiple new cards every couple of months), and assuming a decent chunk of your spend is spent on dining and travel or internationally, then the Chase Sapphire Preferred is almost definitely worth a permanent place in your wallet. A break-even point for me would be around $5,000 of annual bonused spend: if you’re spending at least $5,000 a year on dining and travel or internationally (in which case you could save the typical 3% foreign transaction fee on most credit cards), then you’ll be getting an extra 5,000 Ultimate Rewards points per year, which should offset the $95 annual fee assuming a valuation of roughly 1 UR point = 2 cents. This is of course ignoring whatever annual fees you might have to pay for other 2% cash back cards or the Starwood Preferred Guest Amex card, in which case the break-even point might be lower (e.g. the CSP annual is only $30 incrementally more expensive than the SPG annual fee, but it’s also notoriously hard to get any sort of retention bonus for the CSP which isn’t true for the SPG).

For people who are churning credit cards regularly like myself, I think the decision is a little harder. The most bang for your spending buck that you get is for spending toward fulfilling credit card sign-up bonus minimum spend requirements. Thus, it’s entirely possible that you won’t have much spend going toward your Chase Sapphire Preferred, which means that the 2x categories and the no foreign transactions fees are meaningless. Furthermore, you could accumulate other credit cards which give similar benefits to replace the CSP. For example, the United MileagePlus Explorer Business card gets 2x miles on dining, and the Amex Premier Rewards Gold card gets 3x on airfare.

But the thing that ultimately made me pay my annual fee on the Chase Sapphire Preferred was the wonderful beast that is manufactured spending. Given a little bit of luck, it’s not unreasonable for me to manufacture $6,000 of spend per month at roughly 0.8 cents per dollar, which is more than enough to meet the minimum spend requirements of multiple credit cards every three months. Thus, I don’t actually end up diverting much bonused spend away from my Chase Sapphire Preferred, so I end up applying my first calculation to my situation: since I spend more than $5,000 annually on dining and travel and internationally, it’s worth it for me to pay the annual fee. Given the flexibility of Ultimate Reward points, the 7% annual dividend on UR points earned, and the bevy of credit card benefits, I prefer to put this bonused spend on my CSP over other credit cards that offer similar rewards (although to be fair, I don’t have an Amex PRG yet).

So this was a long and winding explanation of why I like the Chase Sapphire Preferred and why I personally kept it for a second year. Of course, YMMV. For what it’s worth, Chase is currently offering referral bonuses of 5,000 UR points for new applicants to the CSP, and I would of course appreciate it if you used my link to apply.

Enhanced Chase Sapphire Preferred Benefits

The Chase Sapphire Preferred card is the card that I’m most likely to recommend to people starting out in the miles/points game: the 2x points on dining and travel is great, there are no foreign transaction fees, it has a good sign-up bonus with first year annual fee waived, and Ultimate Rewards points can be transferred to United and Hyatt which are two of the best rewards programs.

I recently received a letter in the mail detailing the latest Guide to Benefits for the Chase Sapphire Preferred, and here are the “enhanced” benefits that are actually enhancements.

1) Primary rental automobile insurance if you’re renting outside of your country of residence

Many people laud the Chase MileagePlus Explorer card for offering primary rental car insurance, although that doesn’t really matter to me as I don’t have a car and thus don’t have car insurance so even secondary car insurance functions as primary car insurance for me. But now, it’s explicitly stated, “Outside of your country of residence or if you do not have automobile insurance, you do not have to claim payment from any other source of insurance before receiving coverage under this benefit”. All you need to do is complete the entire rental transaction using your Chase Sapphire Preferred card (which is the card I would use anyway since it’s a VISA card, there are no foreign transaction fees, and you’d get 2x points back on the rental car since it’s a travel purchase) and decline the rental company’s collision damage waiver.

2) Purchase Protection is extended to 120 days from 90 days

Purchase protection is pretty great in that most new purchases are covered from theft, damage, or involuntary or accidental parting provided that you charge some portion of the price of the purchased item to your CSP credit card (note that the guide to benefits explicitly says “portion of the price” rather than the “entire transaction” as is required for the auto rental insurance). Each claim can reimburse up to a maximum of $500, although this protection is in excess of any collectible insurance that you already have (e.g. homeowner’s insurance). Previously, this protection was only for 90 days, but now you get an extra 30 days with this enhanced benefit.

3) Extended Warranty Protection is guaranteed for one additional year on eligible warranties of 3 years or less, rather than doubling the manufacturer’s warranty up to 1 additional year

Extended warranty protection essentially means that you have additional time in which repairs and breakage of items is covered. Previously, the manufacturer’s warranty was only doubled up to 1 year, but now you’re guaranteed an additional year, which means that if the manufacturer’s warranty is for less than a year, then you get an incremental couple of months with this new policy.

FAQs About Adding Authorized Users to Chase Credit Cards

One benefit of the Chase United MileagePlus Explorer card (Flyertalk link) is getting an additional 5000 bonus miles for adding an authorized user. To add an authorized user, all you need to do is call Chase and give them a name, and then Chase will send you a new credit card with that name on it.

Question #1: What is an authorized user?

An authorized user is someone who’s allowed or authorized to use your credit card. This means that the person is allowed to spend as much money as he wants, but he doesn’t have any responsibility to repay any debt that accumulates. This is distinct from a joint user, who is also allowed to spend as much money as she wants but is also personally liable for any debt that accumulates.

Question #2: What information do you need to add an authorized user for Chase?

Since there’s no personal liability for an authorized user, the bank doesn’t actually need to be able to identify the authorized user. Thus, all that’s required is a name. Any name. There’s no verification that the name you’re providing is for a real person or not.

Question #3: What’s the impact on the authorized user’s credit score?

In theory, being an authorized user on a credit card shouldn’t have an effect on that person’s credit score since he isn’t personally liable for the credit extended, but there are many anecdotes that contradict this. One of the most common scenarios of adding an authorized user is parents adding a child as an authorized user on a credit card so that the child starts developing a credit history. This is almost certainly a good idea if the parents are responsible users. But there are also stories of people being denied credit because parents are carrying a high balance or are behind on payments on a credit card for which the person is an authorized user.

Question #4: How does a credit card appear on an authorized user’s credit report if Chase doesn’t ask for a SSN or other identifying information?

The answer is that it doesn’t necessarily appear on the authorized user’s credit report. In general, it seems like if the name that you add as an authorized user is someone who shares your address, then Chase will be able to use that name/address combination to report information to the credit bureaus. But if the authorized user doesn’t share an address, then that credit card information can’t be connected to the authorized user, so nothing gets reported.

Question #5: Can an authorized user sign up for the same credit card and still get the sign-up bonus?

Yes! Being an authorized user on a credit card does not preclude you from getting that credit card yourself and receiving your own sign-up bonus.

Question #6: So what does this all mean?

I suggest that if you’re adding an authorized user solely to receive an additional bonus, you should think carefully about whom you add. In my experience, names aren’t actually verified, and you could cut the credit card up before it ever gets used (in my experience, the other credit card doesn’t even need to be activated to get the additional bonus).