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A Little Summer Credit Card Cleanup: Goodbye to Amex SPG and I Re-Consider the Chase Sapphire

Cards Mentioned Below:

Chase Sapphire Preferred
Chase Freedom Visa
Amex Starwood
United MileagePlus Club Visa

My bucket of credit cards from the past year has been quite full, and I recently noticed that a bunch of the cards are coming up on their anniversary, meaning it’s time to decide whether it’s worth paying annual fees on those cards. In my case, within a month I had to decide what to do about 2 Citi AAdvantage cards, the Chase Sapphire Preferred card, the Amex Premier Rewards Gold card, and my longstanding Amex Starwood card.

The whole credit card thing seems to lend itself to people making decisions based on emotion, rather than on analysis. You could easily find yourself paying $1,000/year in annual fees alone just because you “like” a few cards. But I’ve taken a step back and looked at my spending patterns and my mileage redemption patterns and I’m shocked by one card to kiss goodbye: the Amex SPG card.

I should start by saying that I’ve switched my day-to-day spending to the United MileagePlus Club card. It costs $395 (though they’re currently offering a $95 credit), but it gets you United Club access, which costs between $375 – $475, depending on your United status. Basically, you’re getting full club membership with the rest of the benefits for free. The other benefits are 1.5 United miles for every purchase (yes, 1.5 miles for EVERY purchase), no foreign transaction fee, Hyatt Platinum membership, and Avis Presidents Club. I would get the United Club membership regardless of whether I had this card, so I look at it as a fee-free card. If you weren’t going to get United club membership, then the equation changes considerably here.

It’s clear to me that I don’t need the AA cards (never fly AA) or the Amex PRG card (don’t put enough airfare on my personal cards to warrant the $175 fee for 3X points on airfare spend).

But the other two are a bit painful, because I like the Amex SPG — the points are hugely flexible, and when I want to use the points at a Starwood Hotel, the points + cash option has been really valuable.

But then I started to think more about it. My wife and I have 400,000+ Starwood points. I have enough for the forseeable future, especially since for longer vacations now I almost exclusively stay in a condo (thanks, Airbnb and VRBO!). For the family, it makes so much more sense to rent a condo than to stay at a resort (for an upcoming stay in Southern California, our 2-bedroom condo on the beach is half the price of one room at the Ritz Carlton across the street).

The United Club card offers 1.5 miles per dollar spent on everything. The Amex SPG offers 1.25 miles per dollar because of the 25% transfer bonus (when you transfer 20k points). I’m essentially giving up .25 miles per dollar if I use the Starwood card over the United card. Since I primarily use Starwood points to transfer to airlines, I’m paying .25 miles per dollar for the flexibility to transfer to other programs (since you can’t transfer to United at a reasonable rate). That’s a significant amount of cost for the benefit of possibly needing some flexibility. And while there are certainly Starwood-specific benefits to having the card (nights toward Elite status; 2x points on spend at Starwood hotels), I don’t stay at Starwood hotels enough to warrant keeping the card because of it, given the $65 annual fee. Even if I valued the Starwood points at 2.5 cents each (which I don’t), my first $2600 in Starwood spending would go toward earning enough points to cover the $65 (2600 bonus points X 2.5 cents). I simply don’t spend that much. For me, that means dropping the Amex SPG. I’m going to miss it.

The Chase Sapphire Preferred also has been great, offering 2X points on restaurants and travel. But it has a $95 annual fee, and when I looked at where I’m actually spending money, it’s a wash.

I put about $60k last year on credit cards (between business and personal expenses). About $12k of that was at restaurants and roughly $5k was on travel expenses. If I put those on the United card, I’d earn 25,500 miles. If I put those expenses on the Sapphire, I’d earn 36,380 miles (2x per dollar plus the 7% end-of-year bonus). In short, I’d be paying $95 for 10,880 miles. That’s roughly a wash. Yes, at a penny a mile I’d slightly be making out. But that also means dealing with another card. And I’m basically pre-paying $95 for 10,000 or so miles — and I have an aversion to “buying” miles in advance. I was ready to drop the Sapphire card, until I remembered something. And that something was the Chase Freedom card.

Chase Freedom has no annual fee, and offers 5% cash back (or 5X Ultimate Rewards points when you have a Sapphire Preferred or Ink BoldĀ® Charge Card card) on select categories each quarter. You can only earn the 5X on the first $1500 per quarter, but that means 30,000 extra points per year that can be transferred into the Ultimate Rewards program. That’s when it hit me:

AFTER THE FIRST YEAR, THE CHASE SAPPHIRE PREFERRED IS ONLY WORTH HAVING IF YOU ALSO HAVE THE FREEDOM CARD. Well, it’s only worth it for me. The annoying news is that the Freedom signup bonus is only 10,000 points right now (it’s been as high as 30,000 in the past), so it may be worth waiting for a little while to see if it gets better. Unless you’re in my boat, and your Sapphire Preferred annual fee is coming due – then it’s more than worth considering.

(UPDATE: Reader AK in the comments makes a great suggestion: if you have multiple people in your household, only one of you needs to keep paying the annual fee on the Sapphire Preferred, while the others can get the Freedom. Their Freedom points transfer to your Freedom account, and those points can be transferred to Ultimate Rewards. I’m going to cancel my wife’s Sapphire right now! And just for fun, I won’t tell her!)

My point here isn’t that this is necessarily the best path for you. Rather, I think now is as good a time as any to step back and analyze your credit card spend. I think when you look at where you’re spending annual fees, you may find that you haven’t really optimized the card options available to you.

Does this all sound a bit confusing? Take advantage of our FREE credit card planning service. We’ll help you find the best cards so you can take that trip you’ve always dreamed about. Click here to learn more.

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16 Comments.

  1. The SPG bonus is 25%, not 20%. But that’s only for 20K star points at a time.

    It’s also worth mentioning that Chase is great if you have multiple cardholders in your family. I pay $95/yr for my Sapphire Preferred while myself and others in the family have Freedoms. they can transfer their points to me and I can put it into their FF accounts. They are also authorized users in case they have a large 2x expense or foreign purchase. That $95/yr fee gets spread out amongst 3 cardholders.

    • @AK – thanks, I fixed the 25% (my bad).

      That’s a brilliant idea about having 1 Sapphire card and multiple Freedom cards so you can earn the Freedom bonuses and transfer into Ultimate Rewards. I’m adding to the post…

    • Would it work if I had the Sapphire and my husband had the Freedom? Or do we both need the Freedom to be able to transfer his Freedom points into UR?

      I was just about to apply for the Freedom for him this am and came here for the link; great timing on this post!

      • @Anita: You would both need the Freedom in that case (it’s a free card, so that’s helpful). Freedom points only transfer to UR if you have either a Sapphire Preferred or an Ink Bold.

        • But I can get him the Freedom now, let the points accumulate, and get myself the Freedom later, correct?

          • Sorry – yes, he can accumulate Freedom points now and transfer them later when you get the card.

  2. to the blogger: the business of running and profiting from this blog means you’re having to file an IRS tax return that includes the addition of self-employment income from this blog. You can justify at least one “business” credit card’s annual fee as a write-off cost for that self-employed work you’re doing.

  3. Finally someone talks some sense about the Sapphire. It does not have any particularly good benefits, flexible transfers are not that valuable to many people, and the 7% annual dividend is hard to get excited about.

  4. I am in the same boat with the AMEX PRG.
    You mention that you are cancelling it, but do not aaddress what you are doing about your rewards. I have $225K of rewards points I do not know how to save and do not have a tranfers idea at this time.

    • I’m cancelling it, but I do have a Corporate Amex tied to my Membership Rewards account, so I’ll still have a card that earns MR points.

      In your case, you have 3 options:

      1) Transfer the points somewhere (I’m happy to work w/you to figure out the best place); or
      2) Open a Blue card, which is free and will allow you to keep those points, but you won’t be able to transfer them to airlines or hotels. You can open a green/gold/plat card at a later date and at that time those MR points will be transferrable once again.
      3) Open a green card, which is much cheaper just to keep the flexibility for those points.

      You may want to keep the PRG just until there’s another British Airways transfer bonus, then just dump the points there. Then you can cancel the card and get back the prorated annual fee.

  5. I have the Chase Sapphire Preferred card, but not the Freedom card. Wife has both. Can I transfer my UR points to her or do I have to have the Freedom card to transfer UR points?

  6. I tried to post this earlier, but it didn’t take.

    When my husband and I travel online, we use our hotel points. When we travel with the 3 kids, nothing but a 2 bedroom unit will do. You can rent timeshare units from owners at terrific prices, better than VRBO by quite a bit.

    TUG (Timeshare Users Group) is the timeshare equivalent of FT, and is a great place to find an owner willing to rent a reservation. Marriott, Hilton and Starwood all have fantastic timeshare properties in top locations.

    Feel free to contact me if you want more information.

    Anita

  7. (that was supposed to say “travel alone” not “travel online”. oops

  8. I think it is easy to offset the Amex SPG annual fee with all the great offers Amex has during the year (small biz Saturday, etc) so you might want to reconsider that, unless your plan is to wait a year then reapply.

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