Chase Bank issues a lot of credit cards—with benefits ranging from bare-bones to big time. Two prominent cards illustrate some stark differences: Chase Sapphire Preferred Card and Chase Freedom.
Chase Sapphire Preferred Card offers a rich mix of benefits: points that can be transferred to a handful of big-airline and hotel chain loyalty programs, accelerated point earnings on travel charges, and travel insurance, along with the usual run of non-travel benefits, but with modest cash value return on charges.
Chase Freedom offers some big cash value returns but not much else of special value to travelers. Chase Freedom assess a 3 percent foreign-transaction fee; Chase Sapphire Preferred Card does not. Both cards provide access to emergency travel assistance referrals, but not payments. And APR ranges are comparable, though not identical, for both cards.
So which Chase credit card is right for you? Here's a look at the major features of each card.
Chase Sapphire Preferred Card
This card shows up on many "best card" lists for travelers, and it does include a lot of benefits aimed specifically at travelers:
- Points you can be transfer to Air France/KLM, British Airways, Korean, Singapore, Southwest, United, and Virgin Atlantic frequent flyer programs at a 1:1 exchange rate.
- Double point earnings on travel and restaurant charges, one point per dollar for all other charges.
- A nominal cash value of 1 cent per point, but 1.25 cents per point when used to buy travel.
- Primary collision damage coverage for rented cars, plus insurance coverage of $500 for trip delay, $100 a day up to five days for delayed baggage, $5000 in trip cancellation/interruption, and $500,000 in ADD (accidental death and dismemberment).
The annual fee for the Chase Sapphire Preferred Card is $95, waived the first year, and the current sign-up bonus is 50,000 points if you charge $4000 or more to the card in the first three months.
Chase Freedom
This card is not focused on travelers; instead, its appeal is to people looking to maximize the cash payback value they receive on charges.
- The key feature is a cash return of 5 cents per dollar for charges in a single category that changes every quarter. (Categories may include grocery stores, gas stations, airlines and hotels, and restaurants and movies, for example.) Other charges earn 1 cent per dollar charged.
- The card also includes secondary rental car collision coverage, which is almost universal among cards these days, but no other travel-specific benefits.
There is no annual fee; interest charges are waived for the first 15 months. The sign-up bonus is $150 is you charge at least $500 the first three months.
Chase Sapphire Preferred Card vs Chase Freedom: How They Compare
I ran some calculations about the payback from each card for a moderate-income family of four and a more upscale couple. I used these spending assumptions:
Family of Four
Groceries: $200 per week
Gas station: $800 per year
Travel: $5,000 per year
Restaurant and movie: $5,000 per year
Couple
Groceries: $150 per week
Gas station: $800 per year
Travel: $20,000 per year
Restaurant and movie: $10,000 per year
The resultant payback figures look like this:
Family of Four
Chase Sapphire Preferred Card:
Value of points as cash: $233
Value of points for transfer at 1.9 cents each: $585
Value of points for transfer at 1cent each: $308
Chase Freedom:
Cash payback: $416
Couple
Chase Sapphire Preferred:
Value of points as cash: $443
Value of points for transfer at 1.9 cents each: $1345
Value of points for transfer at 1 cent each: $673
Chase Freedom:
Cash payback: $736
The Take-Away
It's all about the points. The frequent flyer blogosphere values Chase points at around 1.9 cent each, and at that value, the point-earning Chase Sapphire Preferred Card beats the Chase Freedom card for both examples, even after deducting the Chase Sapphire Preferred Card's annual fee.
But for consumers who value transferrable points at no more than 1 cent each, the Chase Freedom card payback tops the Chase Sapphire Preferred Card. For the traveling couple, however, the Chase Sapphire Preferred Card's primary rental car coverage and the other included insurance are probably worth enough to offset the small cash value difference.
And when it's mainly about the cash, Chase Freedom wins out for both families because of those 5% category paybacks, even with some categories paying less than others. When the points don't matter, or are worth no more than 1 cent each, Chase Freedom is winner.
Editor's Note: This content is not provided by any bank, credit card issuer, airline, or hotel chain. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by the aforementioned entities.
