For many newbies in the points and miles world, getting a grip on the ins and outs of the hobby can be challenging (to say the least). Your best bet is to start simple with one of the most important decisions you can make: selecting a travel rewards credit card. While you may not be ready to carry an arsenal of cards in your wallet, choosing a lucrative one to use exclusively can be very rewarding.
In this post, I’ll look at how easy it is to earn rewards by opening and using just a single card for one year. And the subject for this analysis is the Chase Sapphire Preferred Card — one of TPG’s favorite cards for beginners.
Let’s take a closer look at how rewarding the card can be in your first year of cardmembership.
In This Post
Sign-Up Bonus and Benefits
Let’s start with a quick overview of the card and why it’s such a solid product, especially for first-time cardholders. This card currently offers a sign-up bonus of 80,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. Plus, earn up to $50 in statement credits towards grocery store purchases within your first year from account opening. The 80,000 Ultimate Rewards points alone are worth a whopping $1,600 based on TPG’s most recent valuations — but as you’ll see later, it can get you even more value.
In addition to the initial bonus, the card is quite valuable for everyday use, as you earn 2x points on all dining and travel expenses (including services like Uber) and 1 point per dollar spent on all other purchases. These points can be redeemed directly for travel at a rate of 1.25 cents apiece through the Ultimate Rewards travel portal. However, you can also transfer them to various airline and hotel partners, including World of Hyatt and United, giving you some great ways to make the most of your points.
Other benefits include no foreign transaction fees, primary auto rental collision damage waiver and trip cancellation/interruption insurance. The card does come with a $95 annual fee.
Read more: Who should (and shouldn’t) get the Chase Sapphire Preferred?
One year of spending
So if you open the card, earn the sign-up bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns, so for this analysis, I used data on consumer expenditures from the Bureau of Labor Statistics for the last “normal” year (2019) to estimate what an “average” household would spend (and thus earn) on the Chase Sapphire Preferred.
In doing so, I used the following assumptions:
- The “Food at home” number below is $50 lower than the actual reported average — since you won’t earn points on the $50 worth of groceries that triggers the $50 credit that’s part of the sign-up bonus.
- Only the “Other lodging” category under “Shelter” can easily be paid with a credit card — since you’ll pay a fee for paying most mortgage and rent payments with credit cards.
- The “Vehicle purchases” category and “Vehicle Finance Charges” sub-category under “Transportation” can’t be paid with a credit card, but all other transportation expenses can.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
- All other expenses (including “Education”) can be paid with a credit card.
Again, your situation may differ substantially, so feel free to adjust these assumptions in order to calculate your own earning potential.
Here’s a quick table that shows how these spending patterns in the first year of cardmembership translate to Ultimate Rewards points:
|Food at home||$4,593||1 point/$||4,593|
|Food away from home||$3,526||2 points/$||7,052|
|Alcoholic beverages||$579||1 point/$||579|
|Housing (other lodging)||$961||2 points/$||1,922|
|Utilities, fuels and public services||$4,055||1 point/$||4,055|
|Household operations||$1,570||1 point/$||1,570|
|Housekeeping supplies||$766||1 point/$||766|
|Household furnishings and equipment||$2,098||1 point/$||2,098|
|Apparel and services||$1,883||1 point/$||1,883|
|Transportation (gasoline)||$2,094||1 point/$||2,094|
|Other vehicle expenses||$3,222||1 point/$||3,222|
|Public and other transportation||$721||2 points/$||1,442|
|All other expenses||$3,540||1 point/$||3,540|
As you can see, the “average” American consumer would earn more than 123,000 Ultimate Rewards points in just the first year of carrying the card in your wallet. That’s quite a haul!
Related: Why do Chase and TPG list different values for Ultimate Rewards points?
What does this get you?
Of course, earning points is one thing, but knowing how to redeem them for maximum value is a completely different story. Fortunately, the Ultimate Rewards program has a variety of valuable redemptions, most of which involve transferring points to the program’s 10 airline and three hotel partners.
Here’s a sample of what you can get from one year of using the Chase Sapphire Preferred.
Up to four round-trip tickets to Hawaii
Planning a trip to the Aloha State using points and miles isn’t always the easiest goal in this hobby. However, you have a couple of options at your disposal through the Ultimate Rewards program.
My personal favorite is for west coast residents. By transferring points to your British Airways Executive Club account, you can take advantage of the carrier’s distance-based award chart to book tickets from several gateways to Hawaii for just 26,000 Avios per person, including Los Angeles (LAX) and Phoenix (PHX) on American or San Diego (SAN), Oakland (OAK), Portland (PDX) and Seattle (SEA) on American Airlines and Alaska Airlines.
Note that this price is only valid for nonstop itineraries, and you must find saver-level award availability to book. That said, the year’s worth of points from the Sapphire Preferred could get you four round-trip tickets, and you’d even have nearly 20,000 Ultimate Rewards points leftover.
For those readers in the eastern part of the U.S., you also have options to redeem this haul of points for tickets to Hawaii by transferring to Singapore’s KrisFlyer program to book United-operated flights (again, if you can find saver-level award availability). These will be slightly more expensive — 35,000 miles per person for a round-trip itinerary — but the above haul of Ultimate Rewards points could still get you three of these tickets and leave you with roughly 18,000.
Note that you can also transfer Chase points to United MileagePlus. However, flights from the U.S. to Hawaii booked with United miles will set you back 45,000 miles apiece.
Related: The best ways to get to Hawaii using points and miles
Of course, you could also book just one or two tickets and have points left over to cover your hotel stay through the next option.…
Up to 18 free nights in Hyatt properties
One of my favorite ways to use Ultimate Rewards points is transferring them to World of Hyatt. The program has very reasonable redemption rates that start at only 5,000 points per night for a Category 1 property. However, you can get some extreme value by using points at higher-tier locations such as the Park Hyatt Zurich for just 30,000 points per night.
Here’s a breakdown of how many nights you could get across the program’s property spectrum:
- Category 1 (5,000 points/night): 24 nights
- Category 2 (8,000 points/night): 15 nights
- Category 3 (12,000 points/night): 10 nights
- Category 4 (15,000 points/night): 8 nights
- Category 5 (20,000 points/night): 6 nights
- Category 6 (25,000 points/night): 4 nights
- Category 7 (30,000 points/night): 4 nights
- Category 8 (40,000 points/night): 3 nights
I’m particularly intrigued by the option to book an eight-night stay at a Category 4 property such as the Hyatt Regency Chesapeake Bay with a year’s worth of points from the Sapphire Preferred. I actually stayed here for eight nights back in November 2020 (as part of the Work from Hyatt program), and we had a blast — even though it was offseason.
A quick search of dates for this spring shows some dates at more than $300 per night, giving you more than $2,400 worth of value. Remember too that this doesn’t even consider the program’s option to redeem points for suites. Even though this would reduce the number of nights you could book with a year’s worth of Chase points, this could be a great splurge for your first post-pandemic trip.
Related: Planning your California road trip using Hyatt points
Up to 20 short-haul one-way flights
As noted above, one of the best aspects of the British Airways Executive Club program is the distance-based award chart it uses. On short-haul flights of 650 miles or less, you’ll need a mere 6,000 Avios for a one-way ticket (or 9,000 Avios if the flight is from, to or within North America). This means that you can get up to 20 one-way flights that cover these short distances. Alternatively, you could expand your search to flights that are 1,151 miles or less and snag 13 of these one-way award tickets through the Executive Club program.
Since this is a great option for flights into (or out of) Oneworld hubs, let’s take a look at a sample of how wide this will go across a few key cities in the Oneworld network. The following maps show the states/countries within 1,151 miles of the given airport, thus requiring just 9,000 Avios for one-way flights:
American’s hub in Miami (MIA):
British Airways’ hub in London-Heathrow (LHR):
American’s hub in Chicago-O’Hare (ORD):
As you can see, you have a lot of options that fall within this range.
Related: 11 times it’s better to book American award flights through British Airways
Airfare and four nights at Universal Studios for a family of four
This final option is very specific but goes to show that if you play your cards right (pun intended), you can actually unlock an all-inclusive vacation with enough points to cover both award flights and free hotel stays. The Hyatt House across Universal Orlando Resort is a Category 3 property in the World of Hyatt program, requiring just 12,000 points for a free night. Thus, a four-night stay would require 48,000 points and would book you into a studio suite — with two queen beds and a full kitchen.
This would leave you with 75,099 Ultimate Rewards points in your account.
For flights, you have a couple of different options. First, you could book flights directly through the Ultimate Rewards travel portal. With the Sapphire Preferred, your Chase points are worth 1.25 cents apiece, which means that these remaining points are worth nearly $1,000 toward travel. That works out to roughly $250 per person — and if you book far enough in advance, that shouldn’t be hard enough to find.
Another option would be to transfer your points to British Airways. As noted above, nonstop American-operated flights that cover up to 1,151 miles in distance would be just 9,000 Avios each way. You could thus use 72,000 points for four round-trip tickets (18,000 apiece) from any of the following American airports:
- Charlotte (CLT)
- Chicago-O’Hare (ORD)
- Dallas-Fort Worth (DFW)
- Washington-Reagan (DCA)
- New York-LaGuardia (LGA)
You could also look at transferring to United MileagePlus, JetBlue TrueBlue or Southwest Rapid Rewards for these flights — but be sure to crunch the numbers to see if transferring makes more sense than simply using the Chase portal for your trip.
This really demonstrates the incredible versatility of Ultimate Rewards points — and transferable point programs in general. If you’re not currently earning this type of currency, now is a great time to start.
Related: Why are transferable points worth more than other rewards?
The Ultimate Rewards program is typically viewed as one of the most lucrative ones out there, thanks largely to its fantastic transfer partners. The Chase Sapphire Preferred Card has been around for quite some time, but as you can see from above, you can unlock some terrific value by opening and using the card exclusively for just one year.
Keep in mind too that the above calculation may even be a bit too conservative:
- The calculation assumes that you’re spending what an average consumer would. If you typically spend more in a year or have more purchases in different bonus categories, then your earnings will be even higher.
- The calculation assumes that you don’t make any purchases through an online shopping portal. The Ultimate Rewards shopping portal allows you to earn bonus points at close to 300 online retailers, a nice way to boost your earnings even more.
- The calculation assumes that you only open one card. There are many others that will earn you bonus Ultimate Rewards points in certain categories, including the Chase Freedom Unlimited® (1.5 points per dollar spent everywhere) or the Ink Business Cash® Credit Card (5% cash back/5x points at office supply stores and on telecommunication purchases on the first $25,000 in combined purchases each account year). You could even consider a card outside of Ultimate Rewards, like the IHG Rewards Club Premier Credit Card or the World of Hyatt Credit Card. These will unlock additional perks and earning opportunities to extend your travel options even more.
Regardless of these last few details, I hope this post has demonstrated just how rewarding a single travel rewards credit card can be, especially in the first year.
For more information on the Chase Sapphire Preferred Card, be sure to check out the following posts:
- Looking for a credit card? 5 reasons why the Chase Sapphire Preferred should be your first
- A top travel card contender: Chase Sapphire Preferred credit card review
- Why Chase Sapphire Preferred and Freedom Unlimited is the perfect beginner card combo
- Chase Sapphire showdown: Sapphire Preferred vs. Sapphire Reserve
Featured image by Riley Arthur/The Points Guy
SPONSORED: With states reopening, enjoying a meal from a restaurant no longer just means curbside pickup.
And when you do spend on dining, you should use a credit card that will maximize your rewards and potentially even score special discounts. Thanks to temporary card bonuses and changes due to coronavirus, you may even be able to score a meal at your favorite restaurant for free.
These are the best credit cards for dining out, taking out, and ordering in to maximize every meal purchase.
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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