Now offering a 80k sign-up bonus: Chase Sapphire Preferred card review

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The Chase Sapphire Preferred Card is one of the best-known travel rewards credit cards. Featuring 2 points per dollar on all travel and dining purchases, it earns valuable points that can be transferred to 13 airline partners and hotel partners or redeemed directly for travel at a rate of 1.25 cents per point through Chase Ultimate Rewards.

One of the most common questions we're asked is "which travel credit card should I start with?" and I almost universally recommend the Chase Sapphire Preferred Card. It earns arguably the most valuable loyalty points in existence. It carries a reasonable annual fee. It has travel and dining bonus spend categories. And it carries valuable travel protections any time I use it to pay for travel.

Many TPGers (including myself) started their journey into points and miles with the Chase Sapphire Preferred. Let's review this card and identify why it's a solid start for anyone entering the points and miles world, or how it can still contribute to the advanced points and miles collector's loyalty portfolio.

Who is this card for?

The Chase Sapphire Preferred is designed to work for travelers both frequent and casual. It can benefit both the points and miles expert and someone just starting out. With a $95 annual fee, it's not an expensive card, which makes it a good choice for a beginner. But since the card earns Ultimate Rewards points — one of the top transferrable points currencies — you'll also find this card goes a long way if you're an experienced loyalty program whiz looking to get maximum value. I also recommend starting your journey into the world of loyalty points with Chase cards, because you need to strategically plan around Chase's 5/24 rule. The Sapphire Preferred is definitely worthy of one of your coveted five slots for opening new cards.

While many resources may tell you to consider the CSP's big brother — the Chase Sapphire Reserve — you need to first consider whether you're likely to use all the advanced travel benefits that come along with the card's much higher $550 annual fee of the Reserve (especially during this time where the vast majority of people aren't traveling as frequently). If that's not for you — or if you're just starting out and aren't sure — get the Preferred, and then you can always convert your Preferred to a Reserve down the line if you choose.

Related: Who should (and who shouldn't) get the Chase Sapphire Preferred?

Sign-up bonus: As much as $1,600 in value

With the Chase Sapphire Preferred, you'll earn an impressive 80,000 bonus points after you spend $4,000 on purchases in the first three months from account opening based on TPG's most recent point valuations. You can get 1.25 cents per point when you redeem them for travel through the Chase Ultimate Rewards portal. You can also maximize those points by transferring them to travel partners.

This current sign-up bonus is one of the most impressive on the market right now, and it's certainly the best bonus among any mid-tier card that only charges a $95 annual fee. And considering you have to wait 48 months in between earning Chase Sapphire sign-up bonuses, it's important to time your sign-ups appropriately. Scoring this bonus is an amazing way to start off your points journey, but it's also a perfect pick-me-up for experts using 2020 to rack up rewards for amazing 2021 redemptions.

Main benefits and perks

The Chase Sapphire Preferred has a few great benefits for cardholders, especially for a mid-tier credit card.

DoorDash perks

Chase has recently ramped up its partnerships with other brands, including on-demand food service DoorDash. Cardholders now get at least one year of complimentary DashPass membership with DoorDash, which gives you free delivery and reduced service fees on eligible purchases. However, keep in mind there is a cost associated with using food delivery services such as DoorDash. If you already use the service, this can be a valuable benefit, but it's not necessarily a valuable addition to the card if you'd rather forgo delivery in favor of take out or table service. Of course, now that we're all staying home more frequently, a service like DoorDash might be more beneficial for the nights you may not feel like cooking.

Travel protections

I have also used this card to pay for car rentals, cruises, plane tickets and hotels, because travel can often become a challenge and I need peace of mind I'll be financially covered if and when things go awry. In my opinion, besides the points the card earns you, the highlight of the Chase Sapphire Preferred's benefits is the primary rental car coverage — a relatively unusual credit card perk. Most cards offer secondary car insurance, which means if your rental car gets damaged, you have to first look to your personal auto policy or other primary coverages, if any, before the card's coverage will step in and cover any losses. But with primary coverage, you can submit the claim directly to the card issuer right off the bat and avoid involving your own insurance policy entirely.

When traveling, the CSP offers $500 per ticket in trip delay insurance and $10,000 in trip cancellation insurance. It also features $100 per day in coverage for up to five days in baggage delay insurance and up to $3,000 per person in lost luggage reimbursement. That's a strong lineup, though you'll find even better protections on premium cards — along with higher annual fees. Keep in mind when you're traveling internationally, the Sapphire Preferred has no foreign transaction fees, and any time you find yourself in a tough spot needing help, the Visa Signature Concierge Service is available.

Shopping protections

Finally, the Sapphire Preferred comes with purchase protection up to $500 per claim and $50,000 per account, and extended warranty protection that provides an additional year of coverage on eligible purchases with a manufacturer's warranty of three years of less. You can read more about the CSP's shopping and travel benefits in the card's guide to benefits.

Related: 5 Chase Sapphire Preferred benefits you might not know about

How to earn points

The Sapphire Preferred comes with a simple earning structure that is easy to maximize. You'll earn 5x on Lyft (through March 2021) and 2x on both travel and dining. One great thing about Chase is the way those categories are defined. The travel category on the CSP is broad, encompassing a great number of purchases that you might not think of as travel expenses.

For instance, in addition to the charges you might expect to count as travel — such as airlines, hotels, motels, car rentals, cruise lines and travel agencies — you'll also get 2x points when paying for passenger trains (including most commuter trains), buses, taxis, limos, ferries, toll bridges and highways, parking lots and garages and even Uber. That's a lot of different purchases you can earn 2x for, even when you're in your home city.

When it comes to the dining side, you earn 2 points per dollar on essentially all restaurants — regardless of whether they're fancy sit down places or fast food joints. However, you can also get the bonus multiplier at many bars that don't serve food and even some delivery services such as Seamless and DoorDash. Right now, you might be spending more on delivery and takeout options, and this card allows you to earn rewards now that you can use down the line.

So while it may not seem at first glance like the CSP has a plethora of bonus categories, there are actually tons of opportunities to rack up points with this card.

And don't forget that through the end of September, the Chase Sapphire Preferred also has a number of temporary bonus categories, including Instacart, streaming services and gas stations.

Related: Which Purchases Count as Travel With Chase Sapphire Preferred?

How to redeem points

When you're ready to redeem the points you've earned with the Chase Sapphire Preferred, that's when the card's flexibility really shines. First, you can use your points to purchase airfare, reserve hotel rooms and even rent a car at a fixed rate of 1.25 cents per point through the Chase travel portal. That means if you don't want to worry about blackout dates or finding award space, you'll always have the option to book travel using your points this way.

As long as there's a seat for sale on the flight you want, or a hotel room available to reserve with cash, you'll be able to pay for it with your points. And if you book a flight this way, it should be treated as a normal, revenue ticket — meaning you're eligible to earn miles and credit toward airline elite status. The portal is run by Expedia, which means the process is as simple as it would be booking through the third-party platform.

While it's easiest to use your Ultimate Rewards points that way, it's not the most lucrative choice. The way to get top value from your CSP is to take advantage of the card's ability to transfer points to any of Chase's airline and hotel partners. If you take this route, you'll need to be prepared to do a little homework by learning which partners are best utilized for specific trips and searching for award availability. But if you're willing to put in the extra time, you can get much more than 1.25 cents per point in value from your Ultimate Rewards points — especially with programs such as United MileagePlus or the World of Hyatt.

To be fair, the American Express Membership Rewards program has a greater number of transfer partners, but the quality of those partners varies greatly. And while not every Ultimate Rewards transfer partner is terrific, Chase's program is highly competitive since, you can take advantage of key partners such as United, British Airways and Singapore for airline redemptions, or burn points at high-end hotel properties like the Park Hyatt Sydney.

Related: Redeeming Chase Ultimate Rewards for maximum value

Which cards compete with the Chase Sapphire Preferred?

There many worthwhile mid-tier travel credit cards, including a few that go toe-to-toe with the CSP. The most notable of these is the Capital One® Venture® Rewards Credit Card. For the same $95 annual fee, you'll get 5x on hotel stays and car rentals booked with the card through the Capital One Travel portal and 2x on all other purchases (plus a couple of temporary bonus categories and perks). The Venture allows you the flexibility to redeem miles at a fixed rate through its purchase eraser tool or by transferring to partners.

When the Venture makes more sense

The Capital One Venture is a better card for non-bonus spending since you're getting a minimum of 2x on all purchases. If you aren't someone who spends much cash on travel and dining, then the Venture may be the better option from an earning perspective.

Also keep in mind that the Capital One Venture comes with up to $100 in statement credit every four years for your Global Entry/TSA PreCheck application fee. Now that Trusted Traveler Programs are once again open for interviews, more people may start applying and setting up appointments, and this perk could come in handy — especially for beginners who don't have other cards with the perk.

When the CSP still reigns supreme

The sign-up bonus on the Chase Sapphire Preferred is vastly superior. You're getting 80,000 points after spending $4,000 in the first three months compared to just 50,000 miles after spending $3,000 in the first three months with the Capital One Venture. Factoring in TPG's valuations for each rewards currency, that's an astounding $900 difference in sign-up value.

Speaking of, the Chase Sapphire Preferred does earn more valuable points. You can redeem for travel at a 1.25 cent value or get even more worth from your points by transferring at a 1:1 ratio to Chase's transfer partners. The Venture, by comparison, allows you to redeem at a fixed 1 cent value for eligible purchases through the purchase eraser tool or by transferring at a 1.5:1 value or 2:1 value depending on the transfer partner. Because of this, TPG values Ultimate Rewards points at a 2 cent value versus Capital One Miles at a 1.4 cent value.

Related: Chase Sapphire Preferred vs. Capital One Venture Card

Is the CSP worth the annual fee?

Unfortunately, like most things in this hobby, there's no cut-and-dried answer to the question, "Is the Sapphire Preferred worth the annual fee?" That being said, there are some situations where the answer is a resounding yes, so consider opening and holding onto the card in year two and beyond if you fall into one (or more) of these categories:

1. You are able to hit the sign-up bonus. If you know you'll be able to earn the 80,000-point sign-up bonus, that's up to $1,600 in value that far outweighs the first-year cost of the card.
2. You spend at least $4,318.18 in combined dining and travel purchases each year. The extra points you'd earn on the Sapphire Preferred will easily cover the annual fee, not including any additional value you get through partnerships (such as the DashPass benefit or 5x on Lyft).
3. You spend at least $3,166.67 a year outside the U.S. and don't currently have a card that waives foreign transaction fees. Once again, the money you save will cover the $95. While I get that most of us may not end up spending that in 2020 due to the coronavirus, but if you typically will spend that much, I'd still say this card is worth it long-term.
4. You're looking for valuable travel protection. Some of the most under-appreciated perks on travel rewards credit cards involve the various coverages they include, and many involve travel. The Sapphire Preferred has primary car rental coverage, trip cancellation and delay insurance and even baggage delay protection. It's hard to peg a value to these benefits before you use them, but when things go wrong, they can be a lifesaver.
5. You currently hold the Chase Freedom(No longer open to new applicants), Chase Freedom Unlimited and/or new Freedom Flex cards. When you hold the Sapphire Preferred with one of these cards, you can freely move points from one account to another, effectively augmenting the value of your Freedom earnings by translating them from cash-back rewards into fully-transferable Ultimate Rewards points.

Everyone's spending and travel situation is unique, so it's exceedingly hard to speak in absolutes when it comes to a specific travel rewards credit card. However, the Chase Sapphire Preferred Card continues to represent a solid value proposition for a wide swath of the traveling public. So long as you're using the card frequently enough to get more than $95 in value from the rewards earned and benefits utilized, this card is definitely worth the annual cost.

The information for the Chase Freedom, Chase Freedom Unlimited and Chase Freedom Flex has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Bottom Line

If you're ready to move beyond cash back or fixed-value travel rewards credit cards, there really is no better place to start than with the Chase Sapphire Preferred. There's a reason it's stuck around for so long (almost 10 years) as one of the best rewards credit cards while other cards have come and gone or languished in the shadows. It doesn't have fancy travel benefits or lounge access, but it has a great sign-up bonus and some of the most valuable points around. It's flexible enough to meet the travel rewards needs of practically every points and miles skill level, and it comes with a cheap price tag.

So don't dismiss it just because it's not flashy — sometimes a solid and adaptable performer is exactly what you need and can make for one of the best credit cards available today.

Apply here for the Chase Sapphire Preferred Card with a 80,000-point sign-up bonus.

Additional reporting by Liz Hund.

Featured image by Wyatt Smith/The Points Guy