One of the questions I most often get is, “What cards should I get to get started in points and miles?” For me, the answer is unequivocal – you need to start out with Chase cards and accumulate Chase Ultimate Rewards (UR) points.
In this article, we’ll explain why we recommend to start with Chase, we’ll explore the various Chase credit cards, we’ll make suggestions on how to start out, and we’ll daydream about possible redemptions that can seem achievable from the moment you embark on your journey to use points and miles for great travel value.
Why Chase First? It’s About the “5/24 Rule”
Chase UR points are a valuable and flexible tool for points-and-miles travel. UR points can be redeemed like cash for airfare, hotels and rental cars through the Chase UR Travel Portal. Depending on what Chase cards you hold, UR points may be redeemed in the Chase Travel Portal at a rate of 1.5 cents per point (if you hold the Sapphire Reserve card) or 1.25 cents per point (if you hold the Sapphire Preferred card or the Ink Business Preferred card). Or, UR points can be transferred to a number of airline and hotel loyalty programs and in turn redeemed within those programs. Chase’s airline transfer partners include United, British Airways, Singapore Air, Virgin Atlantic, and the Flying Blue program (KLM & Air France). Its hotel transfer partners include Hyatt and Marriott. [Our full chart of credit card-to-airline transfer partners can be found here, and our chart of credit card-to-hotel transfer partners is here.]
But other flexible points programs like Amex Membership Rewards and Citi ThankYou Points are valuable, too. So, “Why Chase first?” The answer to this question lies in a technical rule that the points-and-miles world calls the “5/24 Rule.” Basically, the 5/24 Rule is that Chase will not approve you for certain cards if you have 5 or more new personal credit card accounts within the past 24 months, from any issuer. Here’s a rundown of the 5/24 Rule:
The 5/24 Rule applies to all credit cards issued by Chase, including personal and business cards.
No other card issuer has a more definitive and restrictive rule than the Chase 5/24 Rule. Therefore, your best strategy will be to get valuable Chase cards first, while you are “under” 5/24, before branching out to other card issuers. [That said, (a) individual circumstances may call for a different strategy; and (b) you will need to be careful not to apply for too many Chase cards too quickly, or Chase may shut you down.]
Chase’s Line-up of Credit Cards
Let’s take a look at Chase’s line-up of credit cards (Chase-branded cards only; we’re not focusing on Chase’s co-branded cards for now).
Chase has 4 personal cards – the Sapphire Reserve (CSR), the Sapphire Preferred (CSP), the Freedom, and the Freedom Unlimited. The basics of each card (as of August 2018; please note that some of the sign-up bonus and annual fee information is outdated) are:
And Chase has 3 business cards, all in the “Ink” family – the Ink Preferred (CIP), the Ink Cash (CIC), and the Ink Unlimited (CIU). The basics of these cards (as of August 2018; please note that some of the sign-up bonus and annual fee information is outdated) are:
Important Things to Know in Formulating a Chase Strategy
Characteristics of Chase UR Points
Two things about Chase UR points are very important to note here:
(1) If you have the Sapphire Reserve, the Sapphire Preferred, and/or the Ink Preferred card, your Chase UR points can be transferred to Chase’s Airline and Hotel Partners. This makes holding one or more of these three cards incredibly valuable, and it also makes it possible to achieve value for your UR points above our baseline values.
(2) You can transfer Chase UR points earned on one card to another Chase card. Thus, your UR points can always have the baseline value and transfer options of your highest card. So, for instance, if you hold a Sapphire Reserve card, you can transfer all of your UR points earned on other Chase cards to your Sapphire Reserve, thereby allowing all UR points to be redeemed for 1.5 cents per point through the Chase Travel Portal and allowing all UR points to be transferred to Chase’s Airline and Hotel Partners. Note that the transfer process is manual – you have to log in to your Chase Ultimate Rewards account and go through the “Combine Points” function. Fortunately, this is an easy process.
It’s also useful to know that you can link a card held by another household member and transfer points to the household member’s card. Therefore, if one spouse holds a Sapphire Reserve card, the other spouse can transfer Chase UR points to that CSR card, and the couple can get the 1.5 cpp redemptions and transfer options under the CSR.
Chase Velocity Rules
It will also help us to have a basic understanding of some Chase “velocity” rules about how quickly you can apply and be approved for Chase cards. Here are three Chase “velocity” rules that are particularly relevant (in addition to the 5/24 Rule):
(1) 2/30 on all Chase cards – Usually, Chase denies a 3rd personal credit card application within 30 days. This is not a hard-and-fast rule, but exceptions are rare.
(2) 1/30 on Chase business cards – If you have applied for any Chase card within the past 30 days (business or personal), then Chase will usually deny your next application for a business card within that 30 day period. Again, this is not a hard-and-fast rule, but exceptions are rare.
(3) 1/48 on the Sapphire Reserve and Sapphire Preferred – The terms and conditions for the CSR and CSP card state that “This product is available to you if you do not have any Sapphire card and have not received a new cardmember bonus for any Sapphire card in the past 48 months.” Despite this hard-and-fast rule, there are many data points of people getting approved for both the CSR and the CSP if they apply for both cards on the same day and receive instant approvals for the cards.
(4) The “One Sapphire” Rule – Chase will only approve you for one Sapphire card – either the Sapphire Reserve or the Sapphire Preferred, but not both.
Another factor here is that Chase has recently gotten tougher with approvals (as of August 2018). If you’re just starting with getting points and miles through credit cards, this shouldn’t be a problem. But if you have many other open accounts and/or a high credit limit-to-income ratio on your existing credit card accounts, sometimes Chase will deny applications even if no other “rules” are violated.
In short, our recommendation for those starting with using credit cards to get points and miles is to get 2 Chase UR-earning cards right off the bat.
Exactly which cards and how quickly depends on (a) how aggressive you want to be, (b) how much minimum spend you can hit within the “first 3 month” time period, and (c) whether you are able and willing to apply for a business card (remember that you probably do have a business that allows you to apply for a business credit card; please see the “Do you have a business?” discussion under the Personal & Business Credit Cards section of our article on Credit Card Basics).
Also note that if you’re a couple, each spouse or partner can do this, effectively doubling the benefits right away! One spouse or partner’s applications will have no impact on the other’s – just be sure that you do not add the other spouse/partner as an authorized user on any Chase card.
A Great Strategy to Get Started – CIP Plus CSR
Assuming that you have a business (and there’s a good chance you do, as we discuss above) and can hit the minimum spend requirements, we recommend getting the Ink Business Preferred card plus the Sapphire Reserve.
Combined, these cards come with substantial sign-up bonuses after you meet the minimum spend requirements. Once you hit both minimum spend requirements, you will have a nice balance of UR points that will probably be worth at least $2,000 for travel!
Another piece of good news about this strategy is that you can space out your applications and therefore spread out your spend requirements a bit, to give you more time and thus make it more comfortable to hit the minimum spend requirements for the 2 cards.
If you’re going with this strategy, be sure to apply for the CIP card first. That way, you won’t be caught by the “1/30” rule that would probably cause a business card application to be denied if you had applied for another Chase card within 30 days.
[UPDATE 11/2018: A strong recent data point from a Chase application reminds us that if you are using a sole proprietorship to apply for the CIP card or any other Chase business card, you definitely should apply using your personal first and last name only as the name of the business, and not use a doing-business-as (d/b/a) name such as “Tadlock Consulting.”]
[UPDATE 4/2020: During the COVID-19 crisis, Chase implemented more stringent underwriting requirements for its business cards. Sole proprietorships may not be approved at all. Other business structures may require an existing banking relationship with Chase with a minimum amount on deposit. It’s unclear whether these more stringent requirements will continue after the virus crisis ebbs.]
In this strategy, once you get the CIP and CSR cards and hit your spend requirements, the next logical step would be to get the Chase Ink Business Cash card and its sign-up bonus. Be sure to wait at least 90-120 days after your most recent Chase application to apply for the CIC card.
An Alternative Strategy – CSR Plus Freedom Unlimited
If you don’t have a business and are therefore limited to getting personal cards, the best alternative strategy that we recommend would be to apply for the Sapphire Reserve (CSR) and Freedom Unlimited cards.
Combined, these cards come with a lesser sign-up bonus than our primary strategy above, but also with a lower minimum spend requirement. You will be able to transfer points earned on the Freedom Unlimited card to your CSR card, so that they may be redeemed for 1.5 cents per point via the Chase travel portal or alternatively transferred to one of Chase’s airline or hotel partners for potentially even greater value.
Under this strategy, you would put your dining and travel spend on your CSR card to earn 3 UR points per dollar of spend (which is a value of 4.5 cents per dollar of spend using our baseline value of 1.5 cents per Chase UR point). You would put all other spend on your Freedom Unlimited card to earn 1.5 UR points per dollar of spend (value 2.25 cents per dollar of spend once transferred to your CSR). Thus, this strategy would get you sign-up bonuses worth at or near $1,000. Plus, it would give you a better return on your spend than our solid cash-back strategy, assuming that you use your points for travel, and you would get the additional premium benefits included with the CSR card, which include Priority Pass airport lounge access, up to $100 Global Entry/Pre-Check credit, and primary insurance coverage on your car rentals.
Going Forward – Get Chase Cards Subject to the 5/24 Rule First
What do you do after you complete these initial strategies? Well, still first and foremost, you need to be cognizant of the Chase 5/24 Rule. I would personally work my way through the Chase lineup of UR cards, spacing out my applications by at least 120 days, then turn to other cards. Beyond that, your next decision point would be whether the Southwest Airlines Companion Pass is a valuable goal for you. If so, you’ll want to focus your remaining 5/24 slots on Chase’s business and personal Southwest co-branded cards – before you turn to other issuers and/or other co-branded cards. We’ll talk more about Southwest cards and the Companion Pass in other articles.
We’ll also have more articles on Middle Age Miles about great uses for the Chase UR points you can earn through these valuable sign-up bonuses, so keep following and reading our site!
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