Why I dropped the “Preferred” from Chase Sapphire Preferred

If you spend any time perusing the miles and points blogosphere, you’ve undoubtedly seen ads, posts, reviews, effusive praise, and general hullabaloo for the Sapphire Preferred card from Chase.

40,000 points! Up to 5,000 more points! That’s worth at least $450! Probably more! Annual fee waived for the first year! 2x points on all travel! 1 point on everything else! The card is made of real metal! Anthony Bourdain uses it! Don’t miss out – click here to get yours today!!!

While I’m not a huge fan of the more egregious credit card shilling I see here and there, I admit these are all fair points.

But when it came time to cough up the $95 annual fee after the first year, I realized my free-ride on the gravy train had finally come to an end. Unless I paid the annual fee, I’d have to decide between downgrading to Sapphire or cancelling the card altogether.

Do I keep the Sapphire Preferred? Do I downgrade to the regular old Sapphire? Should I just cancel the card altogether?

I hemmed and hawed over this for a while. I tried to consider all the pros and cons for either option, only to have everything bounce around in my head in the upsettingly disorganized fashion you see below:

  • The Chase Sapphire Preferred card is the only consumer (i.e. non-business) card that allows transfers of Ultimate Rewards points to airline, hotel, and other travel partners.
  • The Sapphire card only allows you to redeem Ultimate Rewards points for statement credits, cash, gift cards, and travel booked directly through the UR portal.
  • If you downgrade to Sapphire, you will most likely not be eligible for another Sapphire Preferred sign-up bonus after a few years.
  • If you cancel altogether, you may be eligible for another Sapphire Preferred sign-up bonus after 24 months.
  • If you downgrade to Sapphire, you will most likely not be able to upgrade back to Sapphire Preferred for at least one year.
  • The Sapphire card is now only available as a downgrade from Sapphire Preferred.
  • Chase won’t tell us how long this “downgrade” option will be available. It’s possible that Chase will completely sunset Sapphire for new customers.
  • The Sapphire card has no annual fee, while still offering many of the key core benefits as Sapphire Preferred.
  • The annual fee on the Sapphire Preferred card can be refunded on a monthly prorated basis.
  • The Sapphire card isn’t made of fancy scrap metal, and without that  $.0263 of raw material to boost your ego, you are basically a common plebe.

After a while, I felt stupid for overthinking everything, called Chase customer service, and downgraded to Sapphire.

Here’s why:

1. The Sapphire card is the only no-fee card from Chase to offer trip delay reimbursement.

Trip delay reimbursement makes flights delays a lot less stressful. As long as I charged a portion of the fare to an eligible card, Chase would pay for my hotel, meals, and more (up to $500) if my flights got significantly delayed.

And it just so happens that the no-annual fee Sapphire card offers this benefit too. In fact, it’s the only Chase card that had this benefit without an annual fee.

2. The Sapphire card still connects you with real live customer service reps, who are awesome.

When I first called the number on the back of my Sapphire Preferred card, I was instantly connected with a live representative. No maniacally pressing “0” or rep-pre-sen-ta-tive recitals required. This caught me so off guard that the first few words out of my mouth were unintelligibly along the lines of “Repre-whaa-who this?”

It took me a few seconds to remember where I was and what I was calling about. Oh that’s right, I was stupid and had scheduled a payment from an old Bank of America checking account I had just cleaned out the day before. Could Chase please cancel the payment and add the details of my new checking account?

“Oh no,” the kind rep replied. “It looks like your payment was already processed. But we can call your bank to see if they can stop the transfer from their end.”

Wait, what?

“I’ve found the number for your bank. May we call them together to see if the payment can be stopped?”

Uhhh ..

“Great, one moment please.” I hear the annoying BoA jingle and familiar menu of options. The rep punches in some numbers for me, and we’re told that the estimated wait time is about 20-30 minutes. “Oh, it looks like there’s a bit of a hold time. If you’d like, we can wait on hold together for Bank of America to answer.”

Who are you and why are you doing this?

“How’s the weather in San Francisco nowadays? It must be absolutely gorgeous” the Chase rep chirps as we listen to BoA’s latest musical soundtrack together.

“It’s .. fine. Thanks.”

“I’m so sorry for the hold,” the Chase rep apologizes. “It might be a while, but I’m happy to wait for you in case you needed to take care of anything else in the next 20 minutes or so.”

“That sounds like .. a great idea. Thanks again …”

I put the speakerphone on mute and try to get back to work. But I can’t shake off how surreal it is for a bank’s customer service rep to be waiting on hold, with a competing bank, on my behalf.

After nearly half an hour, I hear a third voice on the line. But before I even have a chance to un-mute myself, I also hear:

“Hello, this is [name] from Chase bank. I’m on the line with Mr. Kim who would like to stop a recent payment from his Bank of America checking account. Would you be able to stop this payment before it goes through?”

To keep this already-long story from getting any longer, Bank of America’s response can best be summarized as “No.” No, we won’t stop the payment. No, we won’t waive the fee for insufficient funds. No, we are not as awesome as Chase. No, we also don’t really want to talk to you anymore, goodbye.

And then it was just the two of us again. The Chase rep apologized profusely (why or for what I don’t know) and offered to set up payments from my new checking account so I wouldn’t have to go through this again. She also assured me I wouldn’t get charged for any fees on their end.

In all, the call took about 45 minutes, 30 of which was spent on hold. Sounds like a common story in customer service America, until you realize that the customer service rep was the one waiting on hold for me – for my mistake.

Since then, I’ve experienced nothing but stellar customer service from Chase. I even call the Sapphire line to inquire about all my other Chase cards since getting manually transferred is often much quicker than dealing with annoying touchpad inputs.

In my mind, it’s these soft qualities – rather than whatever latest transfer partner’s been inducted into the UR network – that set Chase solidly above the rest.

3. It didn’t make sense for me to pay the $95 annual fee.

At the end of the day, the two benefits I value the most are trip delay reimbursement and quality customer service. The no-fee Sapphire card offers both, so it didn’t really make sense to pay for something I could get for free.

A common selling point of the Sapphire Preferred Card is the 1:1 transfer opportunities with Ultimate Rewards travel partners. And it’s true that you get double the points on all travel, instead of just dining as with Sapphire. So a popular justification for the annual fee goes something like this:

If you charge just $4,750 per year on travel, you’ll break even on the $95 annual fee if you cash out for a statement credit! But Ultimate Rewards points are way more valuable when redeemed with travel partners, where you can get upwards 2, 3, 4, 5, 6, 7, etc. cents on the dollar! So reallyyou’ll break-even even if you spend way less than $4,750 on travel every year! Click here to get yours today!

Okay, fine. I guess the math makes sense. But when was the last time you could book award travel with 9,500 miles? It’s true that the cheapest one-way Avios redemptions start at 9,000 miles, but that’s only mostly for short-haul commuter flights to cities that are a hop, skip, and jump away. And every other domestic round-trip starts at 20,000 miles, with recent devaluations pushing that number into the 30,000+ range fairly quickly.

I usually only book award tickets for long-haul international flights, which start at around 60,000 miles per redemption. This means that I’d actually need to spend $30,000 per year on travel and dining – or $60,000 per year on everything else – to redeem UR points for travel. With most of my income going to pay rent on my tiny Manhattan apartment, I’m sorry to say that I’m just not at that level yet.

You can say that I’ll break even on the card after reaching 9,500 UR points, but it’s disingenuous to suggest that my points are worth any more than a penny each before I reach the ever-rising threshold for award redemption. At the end of the day, that $95 is a sunk-cost regardless of how much I earn through points.

Everyone’s situation is different, and I couldn’t justify paying the annual fee on my end. Maybe you can. Ultimately, you are the only person who can judge whether a credit card is truly worth its annual fee. Everything else is just noise.

6 thoughts on “Why I dropped the “Preferred” from Chase Sapphire Preferred

  1. Mild quibble: To pick one example, CLT-JFK via Avios is 9,000 miles roundtrip, not one way, and that trip is a bit more than a hop, skip, and a jump.

    But your larger point about everybody’s situation being different remains. In my particular situation, I can get great value by paying the annual fee on a UR card, but that won’t necessarily be the case for everyone.

  2. If i open the card in Jan 2014, close it in jan 2016 and apply again in Feb 2016, I think I should be eligible for the bonus again?

    I don’t have the benefits guide from the non-preferred version but are all the benefits the same as CSP?
    It’s a terrible card for everyday spending but I put all award fees on my CSP and use it to hold hotel reservations. But my travel purchases and FT fees are not enough to pay for AF. My experience with the travel insurance benefits is that chase provides superior benefits compared to citi and amex. I got burned by putting a hotel stay on citi that would have been reimbursed by chase. Citi has better category bonuses but I probably won’t be putting my trael spending there.

    In the end I decided that it is worthwhile to keep paying AF on CSP due to the insurance benefits. $95 is not that much if you travel a lot.. my family spends over $7000-8000 in various travel expenses like annual fees etc.

    1. I believe the threshold is 24 months since you received your last signing bonus, though some have reported getting one as soon as 18 months after their last signing bonus. You can read accounts of other cardholders’ experiences here: http://www.flyertalk.com/forum/chase-ultimate-rewards/1474269-chase-sapphire-preferred-keep-downgrade-cancel-33.html

      To answer your question, no the benefits of CSP and Sapphire are not identical. The one major difference that comes to mind is that CSP offers primary rental car insurance coverage, while Sapphire is secondary like most other cards on the market. But I believe that most of the other core CSP benefits are available on the Sapphire card.

  3. First of all, awesome site you’ve got here. Your research into the delay insurance is fantastic.
    Now to this article:
    1) personally I’ve downgraded my CSP to a Sapphire and agree that this is a great option, always worth considering over simply canceling a CSP.
    2) How can you not be using URs for short-haul Avios flights? Imo this is the best use of URs, especially when you don’t accumulate many of them. I live in Raleigh so for me I fly free to/from NYC, Chicago, Atlanta..just to list a few. The reason why I’m not keeping a CSP is because I’ve got an Ink Plus.

  4. Thanks for the post, I was thinking that if I downgraded, I could get another CSP signup bonus in 24 months, so it sounds like I would only be eligible if I had cancelled the card, and not downgraded? I also have an Ink+ so I did feel better about downgrading (and I use Citi TY Premier for my travel expenses).

  5. Hi, great article. One question – does the basic sapphire keep primary car insurance? If so I’ll downgrade, if not I’ll keep the CSP. Thanks.

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