New Chase rules: Sapphire Preferred or Reserve — pick one

You might hit a brick wall if you apply for one of the Chase Sapphire cards

Chase Ultimate Rewards points are valuable, as far as rewards currency goes. And Chase has just put in place some new rules that may make it harder for some rewards chasers to quickly stockpile them. Going forward, you’ll be limited to holding only one of the Sapphire cards at a time. You’ll also be unable to get a new Sapphire card if you’ve already received a sign-up bonus for a Sapphire card in the past 24 months.

What’s changing

There are two cards in the Sapphire line-up: The Chase Sapphire Preferred and the Chase Sapphire Reserve. In the past, nothing prevented you from having both. Due to rewards overlap, it didn’t otherwise make much sense to keep both for the long term. The only reason to get both? Two sign-up bonuses. Chase Ultimate Rewards points are transferable to partner travel programs and therefore quite valuable. The ability to apply for two cards earning that currency could therefore give you a nice cache of valuable travel-rewards points. Then, you could just cancel whichever card you didn’t want, to avoid ongoing annual fees.

That potential strategy is coming to an end, though. Terms on the application pages for the Sapphire Preferred Sapphire Reserve cards have been updated:

In other words, if you already have a Sapphire card (either one), you can’t get another. If you have, say, the Preferred and want the Reserve, you have to go the product-change route (thus earning no sign-up bonus). Also, if you’ve gotten a bonus for either Sapphire card in the past 24 months, your application for a new Sapphire card will be denied.

A notification sent out to current cardholders (which Dr. of Credit has posted) says that those who already have both Sapphire cards can keep them.

The implications

It’s understandable that Chase is closing this loophole. It’s aimed at those who wanted a card for the sign-up bonus and planned to close it as soon as possible. So, while rewards-chasers may mourn the loss of a valuable quick-rewards scheme, this shouldn’t have much of an effect on the vast majority of cardholders. However, it might be frustrating if you got the Chase Sapphire Reserve when it came out last year, closed it and now want to get the Sapphire Preferred.

If you can have only one — which one?

If you don’t currently have a Sapphire card, think carefully about which one you should get. The Sapphire Reserve has a $450 annual fee but a lot of lucrative benefits (3X rewards on dining and travel, $300 in annual travel credits, lounge access, Global Entry reimbursement and more). The Sapphire Preferred has a more-manageable annual fee of $95 but fewer benefits. Both cards share the ability to transfer points to partner airline and hotel programs.

Ask yourself whether you’re likely to use all of the Reserve card’s benefits. If you collect the sign-up bonus, use the entire $300 in travel credits, make some big travel purchases at 3X points and collect the Global Entry reimbursement, you’ve made back the $450 annual fee — and then some. You can always downgrade to the Sapphire Preferred and pay $95 a year going forward. If you aren’t likely to use any of the Sapphire Reserve’s benefits and are simply interested in the ability to transfer your points to Chase’s partner airline and hotel programs, just start with the Preferred.

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