Yesterday, Chase rolled out its best-ever sign-up bonus on the Chase Sapphire Preferred Card, offering 80,000 points after spending $4,000 in the first three months with a $50 grocery credit that cuts the card’s annual fee in half. At the same time, they also increased the welcome bonus on the Chase Sapphire Reserve to 60,000 points – the first bigger bonus we’ve seen on Chase’s premium travel card in years.
These two bigger offers are getting tons of attention – and rightfully so. As airlines and other travel companies dig their way out of the pandemic and its pause on travel, these new Chase offers say volumes about banks and their bullishness on travel returning soon. That’s crystal clear with the new 60,000-point Chase Sapphire Reserve bonus, as a $550 card loaded with travel perks has been a tough sell for the past year.
Keep reading for our thoughts on what this means, and what’s in store for Chase going forward.
Will the 80K Point Offer on the Sapphire Preferred Be Permanent?
This one is tough.
As the pandemic first descended this time last year, consumer sentiment shifted: travel credit cards (and traveling for that matter) were not top of mind. And with record unemployment numbers, banks got extra cautious about who they would approve for new credit cards. That led the once-steady stream of big sign-up offers and mileage bonuses to freeze up for months – banks simply didn’t want to bring in new customers amid all the uncertainty.
But that started to change over the summer of 2020. Banks, hotel chains, and airlines suddenly opened the floodgates with new credit card offers with huge bonuses. Chase joined the rush in September 2020 with a then-record offer on the Sapphire Preferred for 80,000 Chase Ultimate Rewards points after spending $4,000 in the first three months. It ended less than two months later.
Meanwhile, American Express has been hard at work updating the benefits and improving the value propositions of their top-tier Platinum Card from American Express and the American Express Gold Card. What’s more, both are also out with record-setting bonuses (up to 75,000 on the Gold Card and a whopping 225,000-point bonus on the Platinum Card), and there’s no end in sight for either.
And it left a lot of people wondering: Will Chase join the arms race to compete with American Express with bigger bonuses? Did they get the kind of return on the offer last fall they were hoping for? Will these new offers become the standard on both cards?
In hindsight, ending the 80,000-point offer on the Sapphire Preferred last November seems premature. At the time, consumers weren’t thinking about booking travel yet, and the thought of opening a travel rewards credit card was just not top of mind for many.
Let’s fast forward to the present. Millions of Americans are getting vaccinated each day, COVID cases are on the decline, and travel is looking up for the first time in a year. More people are traveling and even more have begun planning trips with hopes of returning to normal by year’s end.
With these latest offers, Chase is trying to capitalize on the shifting consumer sentiment. The 80,000-point bonus on the Chase Sapphire Preferred is the best we’ve ever seen, thanks to a $50 statement grocery credit that cuts the cost of the card down to just $45 in the first year.
Chase hasn’t explicitly labeled either new bonus as a limited-time offer nor published an end date. If you ask us, they’re going to have a hard time dropping these bonuses back down to 50,000 points on the Reserve Card and 60,000 points on the Preferred Card. American Express has had its foot on the gas for months, and we don’t see signs of them letting up.
Click Here to learn more about the Chase Sapphire Preferred Card.
Will We See Chase Update the Benefits on the Sapphire Cards?
New welcome bonus offers are great – especially if you’ve never held either card and want to pile up points for travel in 2021 and beyond. But you could argue that these new offers are putting a bandaid on a bigger problem: Chase needs new or updated benefits on both the Sapphire Preferred and Reserve.
Chase has added a handful temporary benefits on both the Sapphire Reserve and Sapphire Preferred over the last year. Through April 2021, you can earn 2x points per dollar spent on groceries with the Sapphire Preferred and 3x with the Sapphire Reserve. More recently, they announced a new partnership with Peloton allowing you to get up to $150 of membership credits by paying with your Chase Sapphire card.
Way back in March, Chase rolled out a new way to use points for Sapphire cardholders called Pay Yourself Back. It allows you to use points for groceries, home improvement store purchases, and even restaurants – and they’re worth the same as if you were booking flights or hotels through the Chase travel portal.
But all the while, Chase has made even bigger waves with some of its other cards.
Last fall, Chase revamped the benefits on the no annual fee Chase Freedom Unlimited and Chase Freedom Flex cards. Now, these cards offer compelling reason to spend money on them on certain expenses – so good, in fact, that they either match or exceed the category bonuses on the Sapphire cards.
In my opinion, this is a problem for Chase. These Freedom cards have no annual fee. Both Sapphire cards are in need of a long-term category spending refresh to stay competitive and to make them more enticing than the Freedom cards are currently. Here are the Chase Freedom card’s current benefits:
- Earn 5% cashback on rotating quarterly categories on up to $1,500 of spending each quarter (Freedom Flex only)
- Earn 5% cashback on travel booked through the Chase Ultimate Rewards portal
- Earn 5% cashback on Lyft rides through March 2022.
- Earn 3% cashback on dining, including takeout and delivery services
- Earn 3% cashback at drugstores
- Earn 1.5% cashback on all other purchases (Freedom Unlimited only)
See our guide on the Freedom Flex vs. the Freedom Unlimited.
As long as you hold one of the Freedom cards with one of the Sapphire cards, you can transfer the cashback into your Chase Ultimate Rewards points balance. That’s what makes the Freedom cards worth holding.
As you can see, the dining benefit on the Freedom cards is currently better than what you get on the Sapphire Preferred. What’s clearly missing here are better category spending bonuses on the Sapphire cards. The Freedom cards currently beat what is available on the Sapphire card up and down the board and it seems a little out of balance when you consider the annual fees on all these cards.
Will we see Chase update these? We’ll have to wait and see, but putting out these new offers without a benefits update likely means they don’t have any immediate plans to do so.
Chase has made moves throughout the pandemic to keep cardholders engaged and happy. They have added a number of both temporary and pertinent benefit enhancements to keep their cardholders happy and prevent them from closing accounts while most travel was on hold.
One thing is for sure: This isn’t over. Until travel returns to something close to 2019, banks and credit card companies will have to continue being creative to keep travelers happy.
Does that mean more increased sign-up bonus offers? New card benefits? Or a combination of both on Chase travel credit cards? Only time will tell.