Sapphire Preferred, Sapphire Reserve, or Ink Preferred for Ultimate Rewards transferability?

I am on the record believing that much of the caterwauling about the end of travel hacking is essentially an artifact of individual travel hackers aging and having more responsibilities in other parts of their lives and less time to dedicate to the game. A person starting today wouldn't miss Vanilla Reload cards, just like when I got started I didn't miss buying dollar coins from the Mint. You can't miss what you never knew.

On the other hand, it's absolutely true that things are constantly changing, and keeping up-to-date on changes taking place is essential if you don't plan on retiring when your favorite credit card, award sweet spot, fuel dump, or manufactured spend technique is killed.

One such important change came about when Chase stopped issuing new Ink Plus small business credit cards.

The Ink Plus is the best Ultimate Rewards-earning credit card

People who currently hold Chase Ink Plus (and an even earlier card, the Ink Bold) earn 5 Ultimate Rewards points per dollar spent at office supply stores. While those cards can come with expensive activation fees, it's possible to turn a profit buying them virtually regardless of the liquidation technique you use, including even the most expensive options like making ordinary bill payments through Plastiq.

The Ink Plus also makes the Ultimate Rewards points you earn with other cards, like the Chase Freedom and Freedom Unlimited cards, transferrable to Chase's travel partners, meaning you don't need to hold a Sapphire Preferred or Sapphire Reserve card in order to maximize the value of your Ultimate Rewards points.

I say all this by way of background, and in case you already have an Ink Plus account: don't close it!

Brief aside: the Chase Ink Cash is still available for new signups

I try not to give recommendations around here. Your situation is different from my situation, your needs are different from my needs, etc.

But the no-annual-fee Ink Cash card is still available for new applications, and it still earns 5 Ultimate Rewards points per dollar spent at office supply stores (although only up to $25,000 per cardmember year, unlike the Ink Bold and Ink Plus maximum of $50,000 per cardmember year).

If you don't have one or more Ink Plus or Ink Bold accounts (and possibly even if you do!), moving an Ink Cash card up your list of applications in order to get another $25,000 in annual bonused office supply store spend seems like very low-hanging fruit to me at this point.

You can't sign up for new Ink Plus accounts

Chase hasn't given any indication they plan to force current Ink Plus or Ink Bold cardholders to change to the recently-introduced Ink Preferred, but they have stopped opening new accounts with those products.

That means if you have a portfolio of Chase Freedom, Freedom Unlimited, and Ink Cash cards that are earning fixed-value Ultimate Rewards points, you have to decide which Chase card to use to turn them into flexible Ultimate Rewards points.

So, which flexible Ultimate Rewards-earning credit card is best for someone without access to an Ink Plus? Like I say, I don't give recommendations, but here are four factors you can use to help you decide.

1) Product changes

Chase's proprietary credit cards can be more or less freely changed within the personal and business credit card "silos." That means the Sapphire Preferred and Reserve cards can be changed to Freedom and Freedom Unlimited cards, while an Ink Preferred can be easily changed to an Ink Cash card.

On the personal side, a Freedom Unlimited card is quite valuable for earning 1.5 Ultimate Rewards points at otherwise-unbonused merchants, but you only need one since you enjoy that earning rate on an unlimited amount of annual spend. Freedom (not Unlimited) cards meanwhile earn 5 Ultimate Rewards points per dollar spent in specified bonus categories, which have typically included widely-available manufactured spend opportunities like grocery stores and drug stores, but that bonused earning is capped at $1,500 per quarter, per card. That means you're typically best off accumulating as many individual Chase Freedom accounts as possible.

On the business side, as mentioned the Ink Cash is the last remaining Ultimate Rewards-earning credit card available to new customers that earns 5 Ultimate Rewards points per dollar spent at office supply stores.

The decisive question then is whether you prefer to earn bonus points on a finite amount of spend or fewer points on an unlimited amount of spend. If the former, an Ink Cash card lets you earn up to 125,000 Ultimate Rewards points on $25,000 in cardmember-year office supply store spend, while a Freedom card lets you earn a maximum of 30,000 points on $6,000 in calendar-year bonus spend. If the latter, the Freedom Unlimited card lets you earn 1.5 points per dollar spent on cheaper, unbonused manufactured spend or, for example, on unbonused reselling opportunities.

I'm not differentiating between the two premium personal cards here, since both can be product changed to either of the Freedom or Freedom Unlimited cards.

2) Signup bonuses

The Ink Preferred currently has a signup bonus of 80,000 Ultimate Rewards points after spending $5,000 within 3 months, while the Sapphire Preferred and Sapphire Reserve cards offer 50,000 points after spending $4,000.

That should give the Ink Preferred a strong advantage if you plan to transfer the points to Chase's travel partners. If you plan to redeem them for paid airfare, the difference shrink somewhat since the Ink Preferred signup bonus is worth $1,000 in paid airfare while the Sapphire Reserve's bonus is worth $750 due to its higher fixed redemption rate of 1.5 cents per point.

Note that unlike with some fixed-value rewards currencies you can combine points and cash on Ultimate Rewards booking portal reservations.

3) Bonus categories

If you plan to hold a flexible Ultimate Rewards credit card, it would be nice if you could earn some bonus Ultimate Rewards points with it:

  • Both the Sapphire Reserve and Ink Preferred cards earn 3 Ultimate Rewards points per dollar spent on travel;
  • The Sapphire Reserve earns 3 points per dollar spent at restaurants while the Sapphire Preferred earns just 2 points (the Ink Preferred doesn't bonus restaurant spend);
  • The Ink Preferred earns 3 points per dollar spent on internet, cable, and phone services.

If you're a reimbursed business traveler, especially one in charge of wining and dining clients, the Sapphire Reserve or Preferred has the advantage, while if you can convince your employer to let you put $150,000 in telecommunications charges to your Ink Preferred card that would be a no-brainer.

4) Trip delay insurance

Depending on your own travel habits, this may be a decisive factor or more of a tie-breaker. The Sapphire cards have excellent trip delay insurance (Reserve for delays of 6 hours or an overnight stay, Preferred for delays of 12 hours or an overnight stay), and it applies to reservations paid for with the card, booked through the Ultimate Rewards portal, and award tickets so long as you charge the related taxes and fees to your card.

I've used Sapphire Preferred trip delay insurance in the past and it was both fairly painless and fairly lucrative.

Conclusion

How to weigh these different factors in your own travel hacking practice is up to you, depending on your particular earning and redemption needs. Since I already have a couple of Freedoms, a Freedom Unlimited, and an Ink Plus, my advice wouldn't be worth anything to someone new to the game.

That being said, two obvious approaches suggest themselves. You could use a personal card (which one you choose depends on your own situation, including the factors above) as your permanent flexible Ultimate Rewards card, and then periodically apply for Ink Preferred cards before downgrading them to Ink Cash cards.

A second approach would be to alternate applying for personal and small business credit cards every 24 months (in order to be eligible for new account signup bonuses on the personal cards). This way you could product change Sapphire Preferred or Reserve cards to Freedom or Freedom Unlimited cards, and Ink Preferred cards to Ink Cash cards, gradually accumulating a stable of cards that are each subject to separate bonus earning limits. In this strategy, you would always have a flexible Ultimate Rewards card, but it would alternate between a personal and small business card, as long as you could continue to be approved. Of course, this approach may be somewhat riskier since it would always be subject to Chase approving your product change requests and new card applications — no sure thing!

My favorite credit card auxiliary benefits, ranked

I've been thinking lately about the Bank of America Alaska Airlines credit card, since it has a somewhat higher signup bonus than usual, at 30,000 Mileage Plan miles, a $100 statement credit, and a taxes-and-fees-only companion ticket for the first year, instead of the usual $99-plus-taxes-and-fees offer.

Since Alaska companion tickets can be used on any economy fare, and Mileage Plan has last-seat award availability, this is basically a signup bonus of between 1.5 and 2 roundtrips on Alaska or Virgin America, depending on whether you can find low-level award space or have to redeem all 30,000 Mileage Plan miles for a one-way (or possibly a few more if you're flying to Hawaii or Mexico).

Since Bank of America lets you apply for and receive the same card and signup bonus multiple times, it used to be popular to apply for a new Alaska Airlines card every 91 days and then request product changes to the Better Balance Rewards card, which can be automated to spin off $30 every quarter in cash back. I believe that product change is no longer available as the Better Balance Rewards card isn't being offered to new customers, but a product change from a card with a good signup bonus is still likely the best way to get a card like the BankAmericard Travel Rewards card, which only has a standard signup bonus of 20,000 points.

Since ranking stuff is fun, here are a few of my other favorite credit card auxiliary benefits, ranked.

5. Centurion Lounge access

This is technically not one of my favorite auxiliary benefits since I don't have an American Express Platinum or Business Platinum card, but it's one of my favorite auxiliary benefits for other people to have so they can guest me into the lounges.

I've invited subscribers to join me at meetups in the Centurion lounges in Las Vegas, New York La Guardia, and Dallas/Fort Worth, and as someone who would never pay for lounge access I am happy to say they really are terrific lounges. Great food, cocktails, views, seating, and wi-fi. If I lived in or regularly traveled through cities with Centurion Lounges I could certainly see applying for a Business Platinum card. I don't, so I won't, but this benefit still sneaks into the top 5.

4. America Express Delta Platinum and Reserve companion tickets

I don't think the Delta companion tickets, which can both be redeemed for tickets in certain cheap domestic economy fare buckets, and in the case of the Reserve companion ticket in first class, are as valuable as people claim. They essentially function as a not-quite-50% discount on economy tickets, if you are willing to be flexible with your routing and plan far enough in advance, because you still have to pay taxes and fees on the second ticket.

The best value of the companion tickets, of course, is to simply sell them to someone who isn't a travel hacker. That's an easy way to bring down the out-of-pocket cost of your annual fee, if you're primarily interested in the cards in order to earn bonus SkyMiles and waive the Medallion Qualifying Dollar requirements for status.

Finally, Frequent Miler has written about the opportunity to combine Delta companion tickets and the American Express Business Platinum card's 35% Membership Rewards point rebate. Apparently Membership Rewards points can be redeemed against purchases made with the Business Platinum card outside the American Express Travel booking portal. It does require a phone call and is apparently up to the discretion of the phone agent, and I've never tried it, so don't take my word for it. To give a simple example, two $500 tickets with $11.20 in taxes and fees would cost a total of $511.20 if booked with a Delta companion ticket. Since you can pay for Delta companion tickets with any American Express card, you'd then put the charge on your Business Platinum card. Calling into Membership Rewards, you'd redeem 51,120 Membership Rewards points, and eventually receive a rebate of 35% of those points, or 17,892. That would give you a total out-of-pocket cost of 33,228 Membership Rewards points for $1,000 in flights, or 3 cents per Membership Rewards point.

Be careful to note the reason this works: you can't pay for Delta companion tickets with any card that is not an American Express card. If you could, you'd be better off paying with a travel rewards card that you manufacture cheap spend on, or a card that offers free trip delay insurance. But since you have to choose an American Express card, the Business Platinum is the card that lets you leverage the value of your Membership Rewards points against the already-discounted cost of the companion ticket.

3. Trip Delay insurance

Speaking of trip delay insurance, after my experience getting stranded by United in Denver, I've come around to the idea. I'd never pay for it separately, and I probably wouldn't keep a card just because it offers trip delay insurance, but if you already carry a card like the Chase Sapphire Preferred or Barclaycard Arrival+, then you should be booking as many of your flights with it as possible.

That won't always be possible, for example if you're booking tickets using US Bank Flexpoints or Chase Ultimate Rewards points, but for tickets you book with cash, or award tickets that give you a choice of cards to pay with — use the right card! It only takes one claim every few years to pay for many years of $89 or $95 annual fees.

2. Hilton Honors Gold (Diamond) status

Hilton Gold status is notoriously easy to earn, and Hilton Diamond status is notoriously worth little above and beyond the benefits of Gold. Nonetheless, no matter how easy it is to earn, you still want to earn it somehow if Hilton is going to be one of your primary loyalty programs. Personally I carry the American Express Hilton Honors Surpass card, which gives automatic Gold status and Diamond status when you spend $40,000 on the card, although the Citi Hilton Honors Reserve card has the same status earning structure (but earns just 5 Honors points per dollar spent at grocery stores).

1. Hyatt annual free night certificate

The annual free night certificate earned by the Chase Hyatt credit card is the best credit card free night certificate for a few reasons:

  • Unlike the Citi Hilton Honors Reserve free night certificate, it can be used on any day, not just on weekends, and doesn't have a $10,000 spending requirement, allowing that spend to be put on more lucrative credit cards.
  • Unlike the Chase IHG Rewards Club free night certificate, the Hyatt certificate can be combined with valuable World of Hyatt points instead of worthless IHG Rewards Club points. To illustrate this point, a 3-night stay at a top-tier IHG Rewards Club property like the InterContinental Sydney would require the transfer of 120,000 Ultimate Rewards points to IHG Rewards Club, plus the use of an annual free night certificate. A 3-night stay at a top-tier Hyatt property requires just 90,000 Ultimate Rewards points — no certificate required! The corollary of that is the ability to save valuable World of Hyatt points at lower-tier properties by swapping in the free Category 1-4 certificate. The credit card's $75 annual fee buys you a free night certificate worth between $50 and $150 in Ultimate Rewards points.
  • Unlike the Chase Marriott Rewards Premier free night certificate, the Hyatt free night certificate can be used at properties you actually want to stay at. The Marriott Rewards Premier certificate can be used at properties up to Category 5, which would cost 25,000 Marriott Rewards points, if you could find one to stay at. But while Marriott has so totally gutted their categories that there's no reason to count on finding a Category 5 property that's worth an $85 annual fee, there are still plentiful Category 4 Hyatt properties where paying a $75 annual fee will get you a reasonable discount.

Conclusion

Naturally, your ranking should differ based on your own travel needs:

  • if you travel often enough that you are desperate for lounge access, the premium airline credit cards will offer it;
  • likewise Hawaiian travelers may get value from the Barclaycard Hawaiian Airlines credit card's companion ticket;
  • and if you stay at a lot of Sheratons the American Express Starwood Preferred Guest Business card gives Sheraton Club Lounge access (I've never stayed at a Sheraton or visited a Sheraton Club Lounge but I'm sure they're nice).

But for my own travel needs, these are the five benefits I value the most.

Well look at Barclaycard adding a trip delay insurance benefit!

I've written before about taking advantage of the Chase Sapphire Preferred trip delay insurance benefit (the same benefit is shared by the Chase Sapphire and Sapphire Reserve cards). I don't think it's as good a benefit as your local affiliate blogger says it is, and like any insurance product they'll do their best to find reasons not to honor your claim, but the benefit is real and if they can't find any reasons not to, they really will honor it.

Good credit card trip delay insurance is good for a couple key reasons:

  • it doesn't cost anything extra: you trigger it when you pay for your flights with the credit card;
  • it's more generous than airline delay benefits: instead of having to eat at the airport Quizno's and make sure you spend less than $12, you can get a proper meal. Chase doesn't even ask for itemized meal receipts for charges under $50;
  • you get to strategically stay wherever you want. I used my trip delay to get another Hyatt Gold Passport stay credit, which meant one less night I needed to mattress run in December.

I'm not trying to sell you anything, and credit card trip delay insurance has a profound shortcoming for a travel hacker: you have to purchase airfare, or at least pay the taxes and fees associated with an award ticket, with the credit card in question. That means:

  • if you're booking flights with US Bank Flexperks Travel Rewards Flexpoints, you can't pay with another card to trigger trip delay insurance;
  • if you're booking a Delta Platinum or Reserve American Express companion ticket, you have to pay for the ticket with an American Express card;
  • if you're planning to redeem the Membership Rewards points connected to an American Express Business Platinum card against an airfare purchase at 2 cents per point, you can't also put the flight on a card with trip delay insurance.
  • if, like me, you have a Chase Ink Plus but not a card in the Chase Sapphire family, the only way you can redeem Ultimate Rewards points at 1.25 cents each is out of your Chase Ink account, which means you can't also pay with a card that offers trip delay insurance.

I say all this as preface to a pleasant surprise I had this morning: the Barclaycard Arrival Plus World Elite MasterCard has added a trip delay insurance benefit!

Barclaycard Arrival Plus World Elite MasterCard adds trip delay insurance

When I logged into my Barclaycard account this morning, I was greeted by a popup saying I was in for some exciting changes:

Needless to say, I found it profoundly unlikely that I would find the updates to my card benefits exciting, but as your dutiful servant I clicked through to find out. The link took me to the Services/Account Settings page (in case you want to navigate back there later), and down at the bottom there were two links: to the old Guide to Benefits (in effect since May 1, 2014) and to the new Guide to Benefits (effective April 1, 2017):

The old Guide to Benefits included a baggage delay benefit, while the new Guide to Benefit also includes a trip delay insurance benefit. It's not quite as generous as the Chase Sapphire benefit, but it's not bad!

Details of the Barclaycard trip delay insurance benefit

The benefit is pretty simple:

  • a trip must be delayed for 6 hours or more. There's no exception for overnight stays, so if a flight is delayed from 1 am to 6 am it won't be covered;
  • the delay must be a result of inclement weather, equipment failure, or lost or stolen passport or travel documents;
  • coverage is limited to $300 in benefits (compared to $500 with the Chase Sapphire cards);

To trigger the trip delay insurance benefit:

"You must purchase the trip entirely with Your covered card for You, or Your family member, and Your traveling companions. If redeemable certificates, vouchers, coupons, or discounts awarded from frequent flier programs are used to purchase the trip, any remaining charge for the trip must be purchased entirely with Your covered card."

I don't understand why credit card companies go to the trouble of writing their terms and conditions in legalese if the legalese is also going to be hopelessly confusing, but that's where we are. From what I can tell, the benefit covers tickets purchased by you for you and your traveling companions (whether or not they're related to you), and tickets purchased by you for family members, but not tickets purchased by you for the traveling companions of family members (if the family member's traveling companions are not related to you).

That's pretty stupid, but it's the best I can disentangle from this document. The benefit also seems to be limited to $300 per trip, while the Sapphire benefit is limited to $500 per ticket, so two people are eligible for $1,000 in reimbursement. That makes a big difference if you're traveling with a big family and need to book multiple hotel rooms. The flip side is that the Sapphire benefit only covers spouses, domestic partners, and dependent children, while the Barclaycard benefit seems to apply to anyone traveling with you, for example coworkers or older children.

Of course you can simply request a Sapphire authorized user card and extend the coverage protection to anyone you like.

Conclusion

For the reasons I laid out in my introduction, I don't find trip delay insurance as valuable as some people claim to find it. But now that I have a card that offers trip delay insurance, there are some no-brainer situations where I'll be using my Arrival Plus card from now on:

  • Award tickets. I usually use my Arrival Plus to cover the taxes and fees on award tickets anyway simply because it's my highest earning card for unbonused spend, but since I have a Delta Platinum Business American Express card, I have been paying the taxes and fees on Delta award tickets with that card. From now on I'll be paying all those piddling award taxes and fees with my Arrival Plus.
  • Flying United. If I had to fly United for some reason, I'd be much more comfortable doing so if I paid with a card that offered trip delay insurance, given my awful track record with them (I was moving across the country on the day their Chicago air traffic control tower spontaneously combusted).
  • Cheap tickets. For tickets in the sub-$300 range, for which I would typically redeem Ultimate Rewards points at 1.25 cents each, I'll strongly consider paying with my Arrival Plus and redeeming points against the charges, saving my Ultimate Rewards points for more lucrative opportunities.

Chase Sapphire Preferred trip delay insurance for authorized users

When I periodically trash the Chase Sapphire Preferred as inferior to the Chase Ink Plus (because of its better bonused earning categories) and the Chase Freedom (because of its better earning and lower annual fee) readers invariably come back at me with the Sapphire Preferred's supposedly superior trip delay and car rental insurance benefits.

What does insurance cover?

With respect to rental car insurance, and any other insurance policy, it's important to understand what the policies do and do not cover. Credit card insurance policies, whether "primary" like the Sapphire Preferred or "secondary" like virtually every other credit card, do not cover personal liability, so if you don't have another car insurance policy you'll need to buy one from the rental car agency anyway, and if you do have another car insurance policy you'll still need to make a claim, thereby "revealing" the accident and subjecting yourself to higher future rates, if your car insurance company works like that.

In other words, the supposed advantage of "primary" rental car insurance applies exclusively to situations where you run into a tree or snowbank or something.

That happens!

My dad once backed a rental car into a tree. But it's a silly thing to claim is worth paying a $95 annual fee for, let alone foregoing a more lucrative credit card like the Chase Freedom.

As I explained shortly after my Labor Day itinerary was delayed, trip delay insurance doesn't cover the consequences of your delayed flights — it only covers the costs. That's better than nothing, but what it's worth depends on how much value you get out of the coverage. Since my trip delay insurance claim has now been paid, I can finally shed some additional light on that.

Who is covered by Chase Sapphire Preferred trip delay insurance? It's complicated.

Chase Sapphire Preferred trip delay insurance covers the cardholder, the cardholder’s spouse or domestic partner, and dependent children under age 22.

Importantly, authorized users count as cardholders for the purposes of Sapphire Preferred trip delay insurance.

However, coverage eligibility is not transitive.

Consider two almost-identical situations:

  1. Primary cardholder Alice buys tickets home from college for her dependent son Bob and his domestic partner Carol. Bob and Carol's flight is delayed, requiring an overnight stay. Since Bob is Alice's dependent child, his trip delay is covered. But since Carol is not a cardholder, cardholder's spouse or domestic partner, or a cardholder's dependent child under age 22, Carol's trip delay is not covered.
  2. Primary cardholder Alice makes Bob an authorized user, and Bob books tickets home from college for himself and his domestic partner Carol. In this case, Bob is a cardholder and Carol is the domestic partner of a cardholder, so both of their trip delays are covered by Sapphire Preferred trip delay insurance.

Like I said, it's complicated.

One possible takeaway is that if you have a Chase Sapphire Preferred card, you can make all your friends and family authorized users and have them pay you back for flights they book with the card. You get the points, they get the trip delay insurance. Whether that's worth doing or not is up to you.

What documents are required for a trip delay insurance claim?

To file a trip delay insurance claim, you need to provide documents verifying 4 broad categories of information:

  • Proof of purchase (1). You must prove that you paid for the original ticket with a Chase Sapphire Preferred card. You'll need to upload the receipt for your ticket, showing the ticket was paid for with a Sapphire Preferred card and the credit card statement the purchase originally appeared on.
  • Proof of purchase (2). You must also provide receipts for the purchases you're making the trip delay insurance claim against. That means hotel receipts, meal receipts, cab receipts, and receipts for any other covered "reasonable additional expenses incurred for meals, lodging, toiletries, medication, and other personal use items due to the covered delay."
  • Proof of eligibility. You must prove that you are either the primary or authorized user on a Sapphire Preferred card.
  • Proof of relationship. If you are filing a claim for the itinerary of a passenger who isn't a primary or authorized user on a Sapphire Preferred card, you must prove that person is a covered individual as described above.

What did I submit to get my claim approved?

The best way I can think of to illustrate this process is to list the 11 files I had to upload to get my claim approved (I uploaded all these documents as .pdf files):

  1. original itinerary. The e-mail from United listing my original flights.
  2. delayed itinerary. The e-mail from United showing my updated flights after the mechanical delay forced an overnight in Denver.
  3. credit card receipt. The credit card statement showing the original purchase of the ticket.
  4. MSO-IAD MSO-DCA boarding passes. The original and reprinted boarding passes from before and after the mechanical delay caused us to be rebooked.
  5. MSO-supper. The e-mail from Uber showing the amount paid for our car from the airport to the restaurant where we ate dinner.
  6. supper-MSO. The e-mail from Uber showing the amount paid for the trip back to the airport.
  7. meals. Scanned images of the credit card receipts for all our meals after the delay was announced.
  8. hotel receipt. The folio from the Hyatt House Denver Airport where we spent the night.
  9. united flight delay letter. The letter from United giving the reason for our delay and restating our original itinerary and the flights we ultimately took (see how to request your own flight delay letter here).
  10. verification of authorized user. A scan of the back of my authorized user card.
  11. verification of relationship. A lease co-signed by my partner and I.

Where the value is hiding

Now that you've read this post, you know infinitely more about this process than I knew when I went into it. That means it probably won't take you a full month to get your trip delay insurance claim approved. But I want to dig into how much value there is in trip delay insurance, and where it is.

  • Meals and booze. When a trip is significantly delayed, airlines will sometimes offer airport funny money that can be used for meals at participating restaurants. Those vouchers exclude alcohol, and are normally in the single-entree range of $5-15. On the other hand, as explained to me, Chase's trip delay insurance provider will cover meals up to $49.99 without an itemized receipt (I've seen mixed reports of whether alcohol was reimbursed on itemized receipts).
  • Hotels. Likewise, when itineraries are delayed overnight, airlines will often accommodate customers at contract rates at nearby hotels. Those rates typically don't earn elite-qualifying nights or points. On the other hand, if you book your own hotel room as soon as you find out your flight is delayed, you get to book at the chain of your choice, maximizing the value of any current promotions while earning elite-qualifying stays and nights.
  • Miscellaneous expenses. There's no better time to buy toothpaste, a fancy new electric toothbrush, or any other expensive toiletries than during a covered trip delay!

Conclusion: if you are willing to pay for trip delay insurance, you have to be willing to take advantage of it

Each purchased ticket during a trip delay is covered for up to $500 by Sapphire Preferred trip delay insurance. If you're holding onto a Sapphire Preferred card, instead of product changing it to a Freedom or Freedom Unlimited, then when an eligible trip delay occurs you need to be ready to get your money's worth. That means booking hotels, buying toiletries, and eating meals that aren't just expensive, but worthwhile.

In other words, if you use your trip delay insurance claim to eat at the airport Qdoba and stay at the airport Ramada, you're paying $95 per year for what United will give you for free.

Trip delays and trip delay insurance

If you follow me on Twitter you may have noticed that I had a bumpy couple days coming back from my family's camping trip back in my ancestral homeland. As always, a disastrous itinerary for me means a blog post for you!

What is a trip delay?

When you buy an airline ticket, you receive a promise that you'll be delivered from your origin to your final destination — and not much more. If you're involuntarily denied boarding or you're delayed on the tarmac for over 3 or 4 hours you may be entitled to some cash compensation (depending on the size of the aircraft and other factors).

Of course airlines do, under some circumstances, some of the time, do more to accommodate passengers: if a flight is delayed or cancelled, they may be willing to reroute passengers on other airlines or to different airports. If a delay or cancellation requires an overnight stay, they may be willing to pay for overnight hotel accommodations and meals.

Note that "may" is the operative word here.

What does a trip delay cost?

Before I get to trip delay insurance, I want to be clear about our terms. A trip delay has a lot of costs, only some of which can or should be formalized into dollar terms.

During a long delay, you may have to pay for:

  • meals;
  • hotel stays;
  • clothes;
  • toiletries;
  • transportation.

These are your "out-of-pocket" costs during a trip delay.

But it's essential to understand that those costs do not come close to encompassing the costs of a trip delay.

If you miss a job interview because of a trip delay, you're out of a job. If you don't make it to Thanksgiving, Christmas, Pesach, or Eid-al-Fitr because of a trip delay, you lose out on precious time with your family (not to mention the food). If you arrive late to a deathbed because of a trip delay, you may not make it there at all.

These are the real costs of a trip delay, even they don't cost you a penny out of pocket.

Trip delay insurance doesn't promise to make it right

It's possible to imagine a product that immediately goes to work for you in case of a trip delay to ensure that your trip is minimally impacted. As soon as a delay is announced, such a trip insurer (or ensurer) would swing into action, proactively booking you tickets on substitute flights — no matter the cost — that get you to your destination as close as possible to your original arrival time.

That product doesn't exist. You can't buy it alongside your airline ticket when making a reservation, you can't buy it from Berkshire Hathaway Trip Protection, and you don't get it when booking a reservation with your Chase Sapphire Preferred card.

Trip delay insurance just promises to pay for your out-of-pocket expenses

That doesn't make trip delay insurance worthless. Since there are out-of-pocket expenses incurred when a trip is unexpectedly delayed, trip delay insurance is a way to recover those costs so that trip delays don't add expensive insult to inconvenient injury.

Being able to pick your hotel of choice during an overnight delay, and be reimbursed later, has real value (especially to a travel hacker). Being able to eat at your restaurant of choice, rather than wherever agrees to take your airline's funny money, has real value. Being able to buy a real toothbrush and your preferred toothpaste instead of the garbage airlines hand out to delayed passengers has real value. Hell, you can even get a couple free pairs of socks out of it if you play your cards right.

But trip delay insurance won't get you to your job interview on time and it won't get you any more time with your family. It covers your out-of-pocket expenses, but there's no trip delay insurance product out there that even tries to make you whole.

Conclusion

As I mentioned on Twitter, my delayed trip was paid for with a Chase Sapphire Preferred card, and I've already submitted my trip delay insurance claim.

In 5-60 days (it's insurance, after all), I'll have a post dedicated to that process.

In the meantime, just remember: your trip delay insurance covers the costs, not the consequences, of your delayed flights.

Some bonus categories I never think about

I belong to the noisy-but-unpopular school that believes everyday spending should properly be a rounding error in the typical travel hacker's overall miles and points strategy. That's because more miles can be earned in an afternoon of light manufactured spending than will be earned in a month or year of trying to earn as many points as possible on actual purchases.

The flip side of that is a blind spot when it comes to the bonused categories of spend on cards that I already carry, either for purposes of manufactured spend or recurring annual bonuses. In the interests of keeping my blind spots few and far between, I decided to take a closer look at a few of those categories.

Hotels

With increasingly limited access to gas station manufactured spend, you may find that you're not able to manufacture $50,000 in spend in a Chase Ink Plus's double point category of "gas stations and hotel accommodations when purchased directly with the hotel."

Since Ultimate Rewards points are worth 1.25 cents each when redeemed for paid airfare, or more when transferred to Hyatt Gold Passport, Southwest Rapid Rewards, and (usually) United MileagePlus, you're strictly better off paying for your hotel stays with a Chase Ink Plus than with the 2% cash back card you use for your other everyday purchases. One possible exception is if you are having trouble finding eligible expenses to redeem your Barclaycard Arrival Plus, Capital One Venture, or BankAmericard Travel Rewards miles against, although you can always consider refundable reservations in that case.

I'm fond of paying the revenue component of my Hyatt stays with Hyatt gift cards purchased at a discount using cashback rewards, but if you pay for Hyatt stays directly, the 3 Hyatt Gold Passport points earned per dollar with the Chase Hyatt credit card are superior to the 2 Ultimate Rewards points earned by both the Chase Ink Plus and Chase Sapphire Preferred — assuming you plan to transfer your Ultimate Rewards points to Hyatt Gold Passport at any point in the future.

The math is somewhat less favorable when paying for Hilton stays with the American Express Hilton HHonors Surpass card, which earns 12 HHonors points per dollar spent at Hilton properties. According to the Wandering Aramean visualization tool, 12 HHonors points are worth a median 5.376 cents, while 2 Ultimate Rewards points, transferred to Hyatt Gold Passport, are worth a median 3.724 cents. That's an edge, but it's an edge that's highly dependent on your actual redemption pattern.

Finally, the Chase Marriott Rewards Premier credit card is by and large not worth holding for either its recurring benefit (one free category 1-5 night each account anniversary) nor for manufactured spending (one elite night credit for each $3,000 spent). But if you do have it for one reason, the other, or both, you are still unlikely to get more value from the 5 Marriott Rewards points earned per dollar spent at Marriott properties than you would from 2 Ultimate Rewards points earned on the same spend — unless, of course, you are already planning to transfer Ultimate Rewards points to Marriott for some reason, like booking a 7-night Hotel + Air package.

Restaurants

As I've written before, most of the time one or more rotating cashback bonus card is offering 5% cash back at restaurants, so the idea of needing a particular card "dedicated" to restaurant spend is misleading: you should use your most lucrative card, which will, at least 6 months of this year, be a Discover it or Chase Freedom card. But that leaves the other half of the year, which makes it a legitimate question whether there are better cards than a straight 2% cashback card for use at restaurants.

Using the same median Hilton HHonors point value as above, the 6 HHonors points earned per dollar with the Hilton HHonors Surpass American Express at restaurants slightly edges out a 2% cash back card, earning the equivalent 2.688 cents per dollar spent, while the Chase Hyatt credit card earns 2 Hyatt Gold Passport points per dollar spent, or a median 3.724 cents per dollar.

This matters because the Chase Sapphire Preferred, often promoted by affiliate bloggers for its high affiliate payout and earning rate on travel and dining, earns 2 Ultimate Rewards points per dollar. In other words, for just $75, rather than $95, you can earn 2 Hyatt Gold Passport points at restaurants with a card that also offers a free night at Category 1-4 Hyatt properties worldwide. That's a fact that's helpful to keep in mind the next time someone tells you the Chase Sapphire Preferred is the best card to carry for restaurant spend.

Airline tickets

Finally, I very rarely find myself booking air travel directly through an airline (preferring to use miles, Ultimate Rewards points, or Flexpoints earned with a US Bank Flexperks Travel Rewards card), but if you do book air travel directly, or need to pay the taxes and fees attached to award tickets, you can do better than a 2% cashback card with cards you may already carry.

If you periodically sign up for a "spare" US Bank Flexperks Travel Rewards card, for example during the current Olympics promotion, you can use that extra card to pay for airfare, earning 2 Flexpoints per dollar spent, and transfer the resulting bonus Flexpoints to your primary account for future redemptions.

If you use an American Express Premier Rewards Gold card to manufacture grocery store spend on an ongoing basis, you may as well use it to pay for airfare, earning 3 Membership Rewards points for your airline tickets as well, which can be transferred to potentially lucrative travel partners like Delta SkyMiles. The same goes for a Citi Prestige card you may carry to raise the value of your existing Citi ThankYou points.

And the Chase Hyatt credit card earns 2 Hyatt Gold Passport points per dollar spent on airfare, giving it an edge over a straight 2% cashback card, depending as always on your actual planned redemptions.

Conclusion

I don't think it's useful, let alone necessary, for a travel hacker to stress over every possible bonus point at every possible merchant. But for the kind of purchases that you know you make frequently, it's at least worth considering finding additional value by keeping in mind the bonus categories offered by cards that you already use to manufacture spend, or hold for their recurring annual benefits.

As I indicated above, I don't usually pay for airline tickets or hotel stays with credit cards. But digging into my existing cards' bonus categories, I realized I could replicate the majority of the Chase Sapphire Preferred's "travel and dining" bonus categories with cards I already had: the Chase Ink Plus and Chase Hyatt credit cards. Between the two, they cover hotels, airlines, restaurants, and rental cars.

Obviously that leaves out things like cruises, travel agency bookings, local transportation, and so on. But they do include the bulk of reimbursable business travel, so if you do spend a large amount in those categories each year, you may find yourself coming out ahead by examining the bonus categories on your existing card card portfolio.

Is the Citi Prestige a good deal? Compared to what?

This isn't my favorite kind of blog post to write, but I do consider it essential service journalism in the context of a travel hacking blogosphere whose default mode is "breathlessly excited."

The Citi Prestige credit card is often pitched as an essential tool for the sophisticated travel hacker. In this post I want to make the argument that, on the contrary, the benefits of the Citi Prestige are valuable almost exclusively to the least-sophisticated travel hackers, who don't have a well-designed portfolio of credit cards, or to travelers who don't have access to even the most mundane techniques for manufacturing spend.

Let's take each of the benefits of the Citi Prestige card in turn.

Price compression makes airfare cheap

The first thing you hear about the Citi Prestige card is how it multiplies the value of your ThankYou points: with the card, ThankYou points are worth 1.33 cents each towards airfare, or 1.6 cents each towards airfare on American Airlines-marketed flights.

That creates a theoretical cash value of the current 50,000 ThankYou-point signup bonus of $665-$800 in paid airfare.

But $800 in paid airfare manufactured with a Chase Ink Plus card at office supply stores costs $380 in purchase and liquidation fees ($665 in paid airfare costs just $316).

So don't tell me a 50,000 ThankYou-point signup bonus is worth $800; it's worth between $316 and $380, the money you'd spend manufacturing the same airfare with a much more versatile (and, obviously, much cheaper) Chase Ink Plus.

If you have access to manufactured spend at grocery stores, then you'll find a card like the US Bank Flexperks Travel Rewards Visa runs around the world before the Citi Prestige has even got its boots on.

Compare a 25% discount on paid hotel stays to real travel hacking

The "killer app" of the Citi Prestige is supposed to be its "4th-night-free" benefit, whereby reservations made through Citi's contract travel agency, and paid for with the Citi Prestige, earn a statement credit equal to the amount of the stay's fourth night, including taxes.

In other words, when used for stays of exactly 4 nights, the Citi Prestige offers a discount of 25% on average (the actual discount will vary depending on the distribution of room rates over the four nights; Frequent Miler provides some extreme examples here).

By contrast, using only the most commonly available manufactured spending techniques, the Barclaycard Arrival Plus produces $21.05 in hotel stays for just $11.50 — a 45.4% discount.

A Chase Freedom Unlimited, earning 1.5 Ultimate Rewards points per dollar spent (or 1,515 Ultimate Rewards points for the same $11.50 above), paired with a $95 Chase Sapphire Preferred or Chase Ink Plus, requires just 1.01 cents in value per Ultimate Rewards point transferred to Hyatt Gold Passport point to match the 25% discount offered by the Citi Prestige. You have to look pretty hard to get that little value from a Hyatt Gold Passport point.

Finally, using an American Express Hilton Surpass card, you'll earn 6 HHonors points per dollar spent at grocery stores. Given only the most widely available cost of $6.30 for 3,036 HHonors points, you'll need to get just 0.28 cents per HHonors points to beat the Citi Prestige's 25% average discount on four-night stays. And that doesn't account for the value of 5th-night-free award reservations for Hilton elites.

Which brings me to the most important drawback of the Citi Prestige's "killer app:" it's only useful on stays of 4 nights or more! While all the cards and techniques I described above are useful on stays as short as 1 night, to get even a 25% discount on your paid stays, you'll have to stay for exactly 4 nights: any less, and your stay isn't eligible; any more, and your discount shrinks as a percentage of your total stay.

How does the the Citi Prestige 4th-night-free differ from the Club Carlson last-night-free?

When the US Bank Club Carlson co-branded credit cards offered the last night free on award stays, I was one of their biggest enthusiasts. That's because the last-night-free benefit allowed you to leverage the already generous 5 Gold Points earned per dollar spent on all purchases. In other words, it made valuable manufactured spend more valuable.

The Citi Prestige 4th-night-free benefit is exactly the opposite: it requires you to pay cash out of pocket for your room, which violates one of the most important principles underlying a successful travel hacking strategy: spend cash last.

Value all the other Citi Prestige card benefits at what you're willing to pay for them: nothing

You can check out the remaining benefits of the Citi Prestige over at Miles to Memories. They include:

  • airline fee credits (worth much less than cash);
  • lounge access (you're not paying for it now, are you?);
  • Global Entry fee credit ($100 every 5 years, so, $20 per year);
  • and 3 rounds of golf (not 3 foursomes, just 3 rounds: your friends will have to pay their own way).

Reimbursed business travelers should ignore everything I've said

Travelers who are reimbursed for their out-of-pocket expenses have opportunities that are, from a normal person's perspective, stratospherically lucrative. If you're able to book Monday-Friday hotel reservations for a product launch, investment banking intervention, or Republican Party platform committee meeting with your own credit card for later reimbursement, you have no excuse not to earn thousands or tens of thousands of dollars per year in 4th-night-free reimbursements from a Citi Prestige card.

But when a rich weirdo like Ben Schlappig tells you how much money he's saved with the Citi Prestige 4th-night-free benefit, remember that you don't have to pay cash for your hotels, and when you do, you can get a much better discount than 25% by developing a credit card portfolio and manufactured spend strategy that meets your actual travel needs.

Let's all remember why (keeping) Chase Sapphire Preferred is so bad

I was going about my appointed rounds the other day enjoying the latest episode of the Saverocity Observation Deck podcast when I was suddenly felled by a violent attack of chagrin: here was Matt, the Fearless Leader(TM) over at Saverocity, defending the Chase Sapphire Preferred!

I'm not about to let all my hard work tearing that card to shreds be undone by a careless podcaster, no matter how dulcet his tones. So here's a refresher course on why almost no one should get the Sapphire Preferred (except for the signup bonus), put any spend on the Sapphire Preferred (after meeting the minimum spend requirement), or keep the Sapphire Preferred after the first year.

Everyday spend should be a rounding error in your miles and points strategy

Matt's first point was that on a trip into the city to meet some colleagues, he needed to buy a train ticket, catch a cab, pay for lunch, and do the whole thing in reverse. If he didn't want to bring a bulky wallet, he could grab the Chase Sapphire Preferred on his way out the door and use it for all his expenses, merrily earning bonus points all along the way.

A $100 roundtrip train ticket, $30 cab, and $400 lunch (Manhattan's expensive!) paid for with the Sapphire Preferred would earn Matt 1,060 Ultimate Rewards points. Valuing those points at a conservative 10 cents each means Matt has scored $106 in value, just from making purchases he was planning to make anyway!

But Matt knows perfectly well how to buy 1,060 Ultimate Rewards points for less than a penny each all day, every day. Using your actual purchases to decide which cards to get and keep is a surefire way to trick yourself into making bad — and expensive — decisions.

A Sapphire Preferred is a Freedom that hasn't hatched yet

Keeping a Sapphire Preferred after the first year for the bonus categories makes particularly little sense since the Sapphire Preferred can be product changed to a Chase Freedom. While great for manufacturing spend, the Chase Freedom has also bonused restaurants in one quarter for at least the last 4 years. So for 3 months of the year Matt shouldn't be putting his $400 lunches on the Sapphire Preferred anyway!

Likewise, in the current quarter Freedom is bonusing local commuter transportation, so if Matt's inclined to earn Ultimate Rewards points for his train tickets (Amtrak excepted), he can buy a whole year's worth of rail passes and earn 5 Ultimate Rewards points per dollar rather than the measly 2 points offered by Sapphire Preferred!

As Twitter user @BoonDR concisely put it, "a CSP is a Freedom that hasn't hatched yet." Keeping a Sapphire Preferred out of regard for its bonus earning categories is leaving literally tens of thousands of Ultimate Rewards points on the table every year you persist.

The value of flexibility depends entirely on your earning ability

Now let's get to the core issue: if you don't have or want a Chase Ink Plus small business credit card, you have no choice but to carry a Sapphire Preferred if you want your Ultimate Rewards points to be transferrable to Chase's travel partners (or redeemable for 1.25 cents towards travel booked through the Ultimate Rewards portal).

The problem is that without a Chase Ink Plus (and as many Freedoms as you can talk Chase into), you aren't going to be able to cheaply earn the kind of Ultimate Rewards balances that let you maximize the value of Ultimate Rewards' flexibility: the most valuable Ultimate Rewards redemptions give you a high redemption value per point (the appeal of Ultimate Rewards), but individually require large numbers of points.

Drawing on some examples I've used before, a 15.6-cent-per-point redemption at the Park Hyatt Milan is a great redemption — that costs 30,000 Gold Passport points per night ($30,000 in unbonused Sapphire Preferred spend). A 10-cent-per-point Lufthansa First Class redemption is a great value, but costs 110,000 United MileagePlus miles ($110,000 in unbonused spend).

The transferability of Ultimate Rewards points, whether it comes from a Sapphire Preferred or Ink Plus card, is valuable precisely to the extent that you are able to easily and cheaply manufacture Ultimate Rewards points. A combination of Ink Plus and Freedom gives that earning ability in a way that a Sapphire Preferred alone doesn't, which makes the Sapphire Preferred radically less valuable than the other two.

It's even worse if you're cannibalizing bonused spend

If you have limited liquidation bandwidth, as most of us do, then a dollar of unbonused spend put on the Sapphire Preferred might actually be displacing a dollar of bonused manufactured spend. And that's virtually never a good idea.

Ultimate Rewards points can be transferred to Hyatt at a 1-to-1 rate, which is a great deal if you're earning 2 or 5 Ultimate Rewards points per dollar. But if an unbonused dollar of Sapphire Preferred spend is displacing a dollar of bonused Hilton HHonors Surpass spend, you're exchanging 6 HHonors points for a single Hyatt Gold Passport point.

While Gold Passport points are worth more than HHonors points, they aren't worth 6 times more — Hilton's award chart tops out at 95,000 HHonors points, while Hyatt's ends at 30,000 Gold Passport points.

If you have a lot of reimbursed business travel expenses, fine, go for it

Since the Chase Ink Plus also gives 2 Ultimate Rewards points per dollar spent at hotels (up to $50,000 per year), it's still a strong choice for a lot of business travelers. But if you travel very regularly for business and are reimbursed by your employer for plane tickets, car rentals, and meals, you may have tens or hundreds of thousands of dollars in travel expenses each year to charge to the Sapphire Preferred. In that case, be my guest: keep Sapphire Preferred and you won't hear a peep out of me.

But if you're just charging the occasional taxes and fees on award tickets, and domestic economy tickets when you can't find award availability, we're likely talking about a few thousand bonus Ultimate Rewards points per year.

So do yourself a favor: call Chase and ask nicely for a product change to Freedom. You can thank me later.

Chase Sapphire Preferred is terrible, get Slate instead

I'm going to do my readers a favor and assume that by the time they've graduated to blogs like mine from the training-wheels affiliate bloggers, they're perfectly aware of my objections to the Chase Sapphire Preferred, so I won't relitigate that case today. Suffice it to say, the only person who should even entertain the notion of paying a $95 annual fee for the card is a business traveler who's reimbursed for their travel expenses and is allowed to pay for their own hotels and meals while on the road. Even then, I'd be skeptical.

But whenever I rail against the Sapphire Preferred, someone inevitably comes back with their supposed trump card: "Sure," they say, "you'd have to be crazy to keep the Sapphire Preferred, but a 40,000 Ultimate Rewards-point signup bonus makes it worth applying whenever you're eligible for a new bonus."

That's wrong too. Here's why.

Both Sapphire Preferred and Slate can be product-changed to Freedom

While Sapphire Preferred is an Ultimate Rewards-earning card and Slate isn't, both products are "own brand" Chase credit cards, and cardholders can call in to request a product change to the best no-annual-fee Ultimate Rewards-earning credit card: Chase Freedom.

That means the end game is the same with both cards: a product change to Freedom. The only comparison worth making is the advantages of signing up for each card in the first place. So which card offers bigger rewards for signing up?

What are 40,000 more Ultimate Rewards points worth to you?

A lot of bloggers will try to tell you what 40,000 Ultimate Rewards points are worth. A night at the Park Hyatt Vendôme costs 672 Euro, so 40,000 Ultimate Rewards points must be worth $810!

But I don't really care what 40,000 Ultimate Rewards points are worth in the abstract. I care what 40,000 more Ultimate Rewards points are worth.

And the answer is that if you're not going to redeem them, they're worth $400.

Now, maybe you are going to redeem them. Maybe you keep your Ultimate Rewards balance as low as possible by continually redeeming them for premium cabin international trips and luxury hotels. But even if so, don't value 40,000 more Ultimate Rewards points at the highest value you get from the program; value them at the average value you get across all your travel redemptions.

What is a $30,000 negative-interest-rate loan worth to you?

I wouldn't have thought it was possible, but last week I understated the value of the Chase Slate introductory balance transfer offer of no balance transfer fee for transfers within the first 60 days, and a 0% interest rate on balance transfer for 15 months.

I wrote, "for the first 60 days of a Slate account membership, you can transfer up to $15,000 in balances with no balance transfer fee."

But that's not exactly right. You can transfer up to $15,000 from non-Chase-issued credit cards in the process of opening a new account, but that actually has nothing to do with the $0 balance transfer fee and 0% balance transfer APR: it's a restriction Chase places on all balance transfers.

In fact, Chase's rule is that only $15,000 can be transferred in each rolling 30-day period. Since the $0 balance transfer fee lasts for the first 60 days of card membership, you're actually able to transfer up to $30,000 under the no-fee, 0% APR offer.

Of course, that would require having a sufficiently high credit limit, but Chase does allow you to transfer available credit from other credit cards, so you can always scrounge up as large a credit line as possible from your worthless Marriott, British Airways, Hyatt, and Southwest credit cards, for example.

Before I dig any deeper, let's be clear on the math here: your $30,000, 15-month loan has a negative interest rate because you've transferred the balance from other, rewards-earning credit cards. Using conservative assumptions of a 2% cash back credit card with 1% in purchase and liquidation fees, your $30,000 loan is worth a minimum of $300 — before you even get around to using the money!

So, how should you use the money?

Money is fun. Lots of money is even more fun

So now you've got $30,000 in cash lying around, and you only need to make minimum payments on your new Slate card for 15 months. What do you do with the cash?

  • Max out high-interest savings accounts. Maybe you're like me and you drip a steady amount into your high-interest savings accounts each month. That's no longer necessary: max them out and reap 5% or higher APY on your savings.
  • Pay down your mortgage. While your home is hopefully financed at an extremely low interest rate, you may still be paying private mortgage insurance if you haven't yet built up enough equity. By bringing your equity up to 20% of your home's value, you may be able to save hundreds of dollars a month in mortgage insurance payments (I'm not your banker or insurance agent; check with them first).
  • Pay down your student loans. I have a small Perkins student loan that's accruing interest at a rate of 5.6% APR. I'm going to pay it off, saving a few hundred dollars in interest payments over the life of the loan.
  • Make retirement contributions. If you qualify for the retirement savings contribution credit, up to 50% of your contributions to qualifying retirement plans can be rebated when you file your taxes. I recently wrote a walkthrough of the retirement savings contribution credit over at the Saverocity Forum; there's a lot more information available there.
  • Invest it. Of course traditional investment vehicles aren't paying much at the moment, but we're travel hackers: there are alternatives. You can fund Kiva loans with a 5%- or up-to-6%-earning credit card. If you belong to a bank or credit union that allows it, you can fund certificates of deposit with a rewards-earning credit card. A 6-month CD funded with a 2.22% cash back credit card suddenly adds 4.44% to your annualized return. 3-month CD's will double that again.
  • Buy something. Of course this isn't strictly speaking a way of maximizing the yield on your loan, but if the alternative is to finance a car or appliance at a high interest rate, being able to make the purchase with cash may save you hundreds or thousands of dollars.

Conclusion

The options I listed above are just the first few that sprang to mind; you no doubt have your own ideas about what you'd do with a $30,000 negative-interest-rate loan. So do the math, and in almost all cases I suspect you'll find the loan is more valuable than the additional Ultimate Rewards points.

After all, Ultimate Rewards points are easy to earn — a lot easier than finding negative-interest-rate loans!

Has the Chase Sapphire been quietly retired?

For years, Chase has offered 3 Ultimate Rewards-earning personal (not small business) credit cards: the Chase Freedom, Chase Sapphire, and Chase Sapphire Preferred.

The Freedom is Chase's entry into the crowded field of rotating 5% cash back category cards, while the Chase Sapphire Preferred is a premium, flexible-Ultimate-Rewards earning credit card that, while paying affiliate bloggers handsome commissions, is essentially useless for the serious travel hacker due to its low earning rate and $95 annual fee which is generally not waived, even for those who spend above-average amounts on the card.

The Sapphire has meanwhile always been the odd card out: it earns 2 non-flexible Ultimate Rewards points per dollar spent at restaurants but not on travel purchases, and has no annual fee. Meanwhile, for the last three years the Chase Freedom has offered 5 Ultimate Rewards points per dollar at restaurants during the second quarter, making the Sapphire redundant for 25% of the calendar year.

The Sapphire has vanished from Chase's website and affiliate channels

Today I mentioned on Twitter that I had been able to request a product change from Sapphire Preferred to a second Freedom, and I was asked whether it would make more sense to change to Sapphire, instead.

A quick search revealed that the Sapphire has completely disappeared from Chase.com, while Credit Karma's review page does not have an active application link for the card. CreditCards.com is hopelessly annoying to navigate but I couldn't find an application link there, either.

Do yourself and Chase a favor: product change to Freedom

It appears that Chase is now more deliberately juxtaposing the no-annual-fee Freedom card with the premium, $95-annual-fee Sapphire Preferred. I think this actually does a huge service to their customers, who might have previously confused the Sapphire with a card worth carrying, which it is not and has never been.

If you happen to be a current Chase Sapphire cardholder, this is as good an occasion as any to call in and request a product change to the Freedom, since you'll get your new card in time to take advantage of 2015's first quarter bonus category of grocery stores (excluding Walmart and Target stores).