Reader Question: Is It Time To Switch Credit Cards?

I’m guessing that to many readers, the below advice will be pretty obvious, so by all means skip this post if you’d like. However, I get questions along these lines all the time. People generally seem to assume:

• Because they mostly fly one airline, they should have the credit card from that airline
• If that credit card isn’t as good as it used to be, they should switch to another airline credit card

This advice hopefully goes beyond Chris’ specific issue — a vast majority of people shouldn’t be using an airline credit card for their everyday spend. You can easily get a card that’s more rewarding and also offers more flexibility without paying a higher annual fee.

I think Chris is largely right to want to ditch the United Explorer Card, but the solution isn’t to get a co-branded Delta Card. In these situations I try to give pretty specific advice so I don’t overwhelm people, and I think there’s a pretty easy solution here.

Does the Chase Sapphire Preferred make sense?

In my opinion Chris’ best bet here is to get the Chase Sapphire Preferred® Card. He can qualify for a huge sign-up bonus, earn more points for his spend, and most importantly, earn points that are more flexible. Here’s how:

• The Chase Sapphire Preferred has a $95 annual fee that’s waived the first year
• The Chase Sapphire Preferred has a sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months, plus an additional 5,000 Ultimate Rewards points when you add an authorized user to the card and they make a purchase within three months; Chris would be eligible for this bonus, and personally I value those 55,000 Ultimate Rewards points at $935 (1.7 cents per point)
• The Chase Sapphire Preferred offers double points on dining and travel, which is a better rewards structure than United’s card offers

The other benefit of the Chase Sapphire Preferred® Card isn’t just that you’re earning more points, but also you’re earning more valuable points. Chase Ultimate Rewards points can be transferred to any Ultimate Rewards airline or hotel partner. So you can continue to transfer those points to United MileagePlus if you’d like, though you can also transfer those points to other useful partners, like Air France KLM Flying Blue, Korean Air SkyPass, Singapore KrisFlyer, World of Hyatt, and more.

The flexibility goes beyond that. Redeeming miles can be complicated at times, so rather than converting those points into airline miles or hotel points, you can just use the points as cash towards the cost of a ticket, at the rate of 1.25 cents per point. That’s not something you’d be able to do if earning United miles directly.

To me this is an absolute no brainer. For more on this card, see this post.

Also consider the Chase Sapphire Reserve

The Chase Sapphire Reserve® Card was introduced just under two years ago and has been extremely popular, as it’s the premium version of the Chase Sapphire Preferred® Card. I don’t want to overwhelm Chris here, and also don’t want there to be any sticker shock, because the card has a $450 annual fee. However, I think it could be well worth it in his case. What differentiates the Chase Sapphire Reserve® Card?

• It offers a $300 annual travel credit that will automatically be applied towards any travel purchase
• It offers triple points on dining and travel (rather than double points)
• In addition to being able to transfer points to the same partners, you can redeem points for 1.5 cents each towards the cost of a travel purchase (rather than 1.25 cents each)
• You’ll get a Priority Pass membership with unlimited guesting privileges, meaning you’ll have access to over a thousand lounges around the world

The $300 travel credit should more or less be worth face value to anyone who has the card, meaning the real out of pocket for the card is $150 per year ($450 minus $300), or $55 per year higher than the Sapphire Preferred. For that I think it can make a lot of sense to pick up the Chase Sapphire Reserve® Card so that you earn triple points, get a Priority Pass membership, and earn more valuable points.