Three notes on Chase Sapphire Preferred and Reserve grocery statement credits

I haven’t had a Chase Sapphire card in a long time, having downgraded my Preferred years ago to a second Freedom card and replacing it with an Ink Plus card to maintain the flexibility of my Ultimate Rewards points and the ability to redeem them for 1.25 cents each towards paid travel through the Ultimate Rewards portal.

Still, I’ve obviously been following with interest the news that Sapphire Preferred and Reserve cards will allow Ultimate Rewards points to be redeem for 1.25 and 1.5 cents each, respectively, for “grocery, home improvement, and dining purchases.” That stacks with the accelerated earning on up to $1,500 in monthly grocery store spend on Sapphire cards through the end of June.

I wanted to share three quick notes on this new opportunity.

If you ever redeem points for paid travel, redeem them for groceries

There are three basic value buckets for Ultimate Rewards point redemptions:

• bank account direct deposit and credit card statement credits at 1 cent each;

• paid travel booked through the Ultimate Rewards portal at 1.25 cents (Sapphire Preferred and Ink Bold/Plus/Preferred) or 1.5 cents (Sapphire Reserve);

• travel partner transfers at higher — potentially much higher — redemption values for premium travel.

If you redeem, or plan to redeem, most or all of your Ultimate Rewards point balance for high-value transfers to Chase’s travel partners, then this opportunity doesn’t affect you at all; save your points, transfer them to high-value partners, and make high value redemptions!

If, on the other hand, you think of Ultimate Rewards points as a useful reserve account for paid domestic airline tickets, and were already happy to redeem them for 1.25 or 1.5 cents each for airfare or hotels when award space wasn’t available, then you should be eager to redeem them for the same value as statement credits against eligible grocery purchases. After all, once you’ve redeemed the points for a statement credit, you can use the same cash to buy the same tickets with a different credit card, and earn miles, points, or statement credits on that card!

A word of warning: statement credits aren’t “payments”

I wanted to flag one issue for folks who are planning to hit this deal especially hard. Most responsible travel hackers will tell you not to carry a balance on your credit cards, in order to avoid interest charges that can easily overwhelm the value of any rewards you earn on purchases. The “statement credit” is one way credit card companies have developed to charge fees regardless of how carefully you monitor your balances: according to the terms and conditions of most, if not all, of my credit cards, statement credits are not treated as payments and do not decrease your minimum payment due.

This doesn’t matter if you diligently pay your credit cards off before each statement closes, but one of the nice benefits of travel hacking and manufacturing spend is having several weeks of float to earn interest, meet minimum spend requirements, and spin up other opportunities. In that case, even if you pay off your entire statement balance with statement credits, you may get hit with a late payment or interest charge on the minimum payment. This shouldn’t apply if you reduce your balance to $0, but if you have made additional purchases during the month, your credit card company may consider those purchases to be subject to interest charges since your remaining previous balance was merged with your new balance.

This isn’t an extremely common situation, but I wanted to flag it for folks seeking to redeem tens or hundreds of thousands of Ultimate Rewards points towards grocery store purchases: go ahead and make your minimum payment in addition to any statement credits you redeem, to make sure Chase doesn’t decide to ding you for missing a credit card payment (and take a closer look at your account activity).

Apply or upgrade to Sapphire for redemptions?

Finally, this new opportunity raises the question whether you should upgrade an existing Freedom, Freedom Unlimited, or Sapphire card to a Sapphire Preferred or Sapphire Reserve card, or apply for a new card, in order to take advantage of these new statement credit redemption opportunities. Here, I don’t have a strong feeling either way.

If your credit history made you eligible for a Sapphire Preferred or Reserve offer prior to the new redemption opportunity, then it was probably already worth applying. It’s unclear to me that the new redemption opportunity should change your application calculus.

On the other hand, for folks with an existing large Ultimate Rewards balance held on Chase Ink cards, the new ability to redeem those points for statement credits may well justify upgrading a Slate, Freedom or Freedom Unlimited card to a Sapphire Reserve in order to cash out that existing Ultimate Rewards balance for grocery statement credits while travel redemptions remains a distant prospect.

Conclusion

I have to had it to Chase in making a fairly crafty calculation with this new redemption option. Existing members with large existing points balances, but who found themselves unable to redeem their points during the pandemic, might be tempted to simply cash out and cancel their accounts. Instead, Chase offered them the opportunity to both earn bonus points on their everyday purchases and redeem their Ultimate Rewards points at their “full” 1.25 or 1.5 cent value against them. That both directs spending towards Chase products and reduces the attrition of their “travel” clients during a period when travel is impossible.

But however clever Chase is, it’s still up to you to make the important decisions about how, when, and where to redeem your points.

Two current and upcoming bonused manufactured spend opportunities

Today I want to flag a couple manufactured spend opportunities to make sure readers are aware of them.

$15 off $300 in Office Depot/OfficeMax MasterCard gift cards

Through August 24, 2019, automatically receive $15 off purchases of $300 or more in MasterCard gift cards at OfficeDepot and OfficeMax store locations. $200 fixed-value MasterCard gift cards have an activation fee of $6.95, so the purchase of two $200 cards comes to a total of $398.90. I’ve seen reports that the credit is only applied once per transaction, so your best bet is to either visit multiple locations or hope that your cashier will allow you to ring cards up in multiple, separate transactions.

Using a legacy Chase Ink Plus or Bold card, or a Chase Ink Cash, you’ll earn 5 Ultimate Rewards points per dollar, for a total of 1,995 negative-cost points (depending on the liquidation methods you have available).

$15 in free groceries after $150 or more in Visa or MasterCard gift card purchases at Giant/Stop & Shop/Martin’s, plus cheap or free gas

Via Doctor of Credit, the East Coast Giant/Stop & Shop/Martin’s grocery store chain is offering a version of their periodic promotion for free groceries when you purchase prepaid debit cards. These promotions have taken several forms over the years, but this is one of the most generous versions I’ve seen:

• it applies to purchases of both Visa and MasterCard gift cards. Some people find it cheaper or more convenient to liquidate one type of card rather than the other, and this promotion gives them a choice.

• it offers $15 in free groceries, while previous versions of the promotion sometimes offered just $10.

• it offers a printed coupon to be used on a future purchase, which makes the coupon transferable and means you can ring up your gift card purchase at customer service and not hold up the ordinary checkout lanes.

• and finally, if you choose to buy MasterCard gift cards, you’ll also earn 2 gas points per dollar. For folks that spend a lot on gas, that may be a very valuable incentive to buy MasterCards over Visas.

The offer is supposed to run between August 23 and August 29, 2019, and the coupons can be redeemed for groceries through September 5, 2019.

Conclusion: Visa or MasterCard?

The manufactured spend landscape has become so fractured that there’s no one strategy that is going to work for everyone. For a long time, conventional wisdom had it that Visa prepaid debit cards were easier to liquidate due to Walmart’s almost-universal geographic footprint. But with their obnoxious new ID requirements and restrictions, that wisdom has become less conventional.

As you seek out as many cost-effective liquidation methods as possible, you’ll just need to stay even more aware of which methods might make preferring one card network or issuer or another more or less profitable and convenient given your specific circumstances.

Quick hit: Ultimate Rewards points transfers are available instantly when you add an authorized user

This isn’t exactly news, but since I encountered it for the first time the other day, I wanted to pass it along to anyone else who might find themselves in the same situation I was in.

Expiring points are a constant nuisance if you have a lot of loyalty accounts

In general there’s no rhyme or reason to points expiration policies, with some being based on periods of inactivity, some being based on calendar years, some on program years, and some points coded to expire a fixed number of months or years after being earned. There are services that promise to track your expiring points, AwardWallet being the most prominent because they offer an affiliate program, but at the end of the day you’re responsible for your own points.

My biggest expiring-point mishap was with my HawaiianMiles account, where I had earned a sizable balance during a short-lived period when a mainland grocery store was both selling high-denomination prepaid Visa debit cards and participating in HawaiianMiles in-store mileage earning. After the grocery store withdrew from the program and stopped selling high-denomination cards, I lost interest and eventually forfeited almost 25,000 HawaiianMiles simply through years of inattention.

Ultimate Rewards transfers reset inactivity periods

If you see an expiration coming a long way off, there are plenty of ways to trigger activity. Buying a $1 Wall Street Journal subscription through a shopping portal would be enough to save your points, as long as you did it far enough in advance.

If you put it off, or don’t notice an upcoming expiration until it’s close at hand, you’ve got a different problem. Points purchases and transfers will usually reset expiration dates, but they’re preposterously expensive. For example, buying United Mileage Plus miles costs a minimum of $70, plus tax, for 2,000 miles, and transferring miles is almost as expensive.

Fortunately, transfers from Ultimate Rewards to their travel partners are free and instantaneous, starting at 1,000 points, and those transfers also reset expiration due to inactivity.

Ultimate Rewards transfers are available immediately after adding an authorized user

There’s a catch, however: you can only transfer Ultimate Rewards points to the travel partner loyalty account of an authorized user on your own flexible Ultimate Rewards-earning account, whether that’s a Sapphire Preferred, Sapphire Reserve, Ink Preferred, Ink Plus, or Ink Bold.

With my partner’s Mileage Plus balance expiring in just a few days, that got me worried. Would she be added as an eligible recipient in time for the transfer to go through before her balance expired?

Fortunately, after just a few clicks adding her as an authorized user on my Ink Plus account, she immediately appeared in the list of eligible transfer recipients, and I was able to instantly transfer 1,000 Ultimate Rewards points into her Mileage Plus account, pushing the expiration of her miles back another few years.

Conclusion

As I said up top, this won’t be news to heads of household that diligently manage their entire family’s travel finances. But if your family members maintain separate loyalty accounts and don’t carefully follow each other’s expiration dates, it’s good to know that Ultimate Rewards can serve as a quick and easy solution for some soon-to-expire miles and points.

An annoying (but probably good) change to Visa gift cards from Staples.com

Like most (all?) travel hackers, I consider flexible Chase Ultimate Rewards points to be the most valuable currency for hotels (World of Hyatt) and award tickets (United Mileage Plus and Southwest Rapid Rewards), and even find myself redeeming them for paid airfare periodically at 1.25 cents each through my Chase Ink Plus card.

That means it’s a no-brainer for me to spend $50,000 per cardmember year at office supply stores, to earn 250,000 Ultimate Rewards points. That’s not the only way I earn Ultimate Rewards points (I also have two Chase Freedom cards and a Freedom Unlimited), but it’s a commonsense way to make sure I have a steady stream of points coming in each month.

Staples.com Visa gift cards can no longer be activated by Blackhawk phone reps

While I stock up on prepaid debit cards at Staples and Office Depot during promotions, my city unfortunately only has one of each, and they quickly sell out, so I top up my spend with monthly purchases of $300 Visa gift cards from Staples.com.

Those cards are mailed unactivated and unusable, and for each order, a separate letter is mailed with activation codes that can be entered online or over the phone.

In my experience, those activation codes typically arrive a day or two after the physical cards, and Blackhawk has long offered a workaround if the activation codes are delayed: after verifying your identity, their phone reps were able to submit manual activation requests without the activation codes.

Sometime between the beginning of October (my last order) and this week, that process stopped working. You can still activate gift cards using their phone system, but only using the automated phone tree; there’s no longer an option to speak to a phone rep to request manual activation of cards (or anything else).

This is annoying, since I typically order 18 cards per month, and waiting for the activation codes to arrive and then manually activating them is a pretty tedious chore, especially since the website makes you complete a “captcha” for every single card you activate. I’ve spent so much time looking for traffic lights and bicycles I can’t tell them apart anymore.

The previous system was extremely vulnerable

While phone reps previously “verified” your identity before submitting activation requests, the information needed to verify your identity was delivered along with the physical gift cards: your name, mailing address, order number, and the last four digits of the cards themselves (depending on the phone rep).

That meant anyone who knew what was in the envelope (anyone who knows what Blackhawk sells) could steal the cards and call in to have them activated using only the information in the gift card package itself.

It’s possible this threat was finally realized, or that enough such thefts actually occurred, and that led Blackhawk to make the change. It’s also possible, and perhaps more likely, that they decided to lay off some of their call center workers and needed to reduce the number and type of calls they handled.

Conclusion: probably for the best

If you manufacture a lot of spend, wasting a day or three waiting for activation codes to arrive can feel like an eternity, and I was definitely frustrated trying to find a way to talk to a phone rep until I realized the option had been completely removed.

But the frustration of not being able to immediately liquidate cards pales in comparison to the frustration of trying to get your money back if one or more orders of gift cards were stolen and liquidated.

Having gift cards and activation codes arrive on separate days is a fairly primitive form of one-factor identification (you have to be able to check the mail at the same address on two separate days), but since the previous system was zero-factor identification, on balance I think the inconvenience isn’t worth complaining about too much.

On the other hand, if your activation codes never arrive, then the inability to speak with a phone rep to resolve the issue is going to get very annoying, very quickly.

Using Chase Ink Business Unlimited to rejigger your Ultimate Rewards card portfolio

Chase has been fiddling with both their personal and business credit card lineup for a few years now, introducing both the personal Freedom Unlimited credit card, which earns 1.5 fixed-value Ultimate Rewards points on all purchases, and the small business Ink Business Preferred, which earns 3 flexible Ultimate Rewards points on "travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines."

The recent launch of an Ink small business version of the Freedom Unlimited means there's potentially an opportunity to use an Ink Business Unlimited card to rejigger your current lineup of Ultimate Rewards-earning credit cards.

Signup bonuses

I don't chase signup bonuses, but I know a lot of my readers do, so if you're eligible for an Ink Business Unlimited credit card, you might want to sign up for one just for its 50,000-point signup bonus after spending $3,000 within 3 months. Ultimate Rewards points are probably the most valuable single currency out there right now, so it's always worth at least considering applying for a signup bonus when a new Ultimate Rewards product is launched, as long as you're eligible.

Product changes

However, not everyone is eligible for new Chase credit cards due to the "5/24 rule," but it should still be possible to get an Ink Business Unlimited card by requesting a product change from an existing Ink credit card.

Personally, I like the ability to earn plentiful Ultimate Rewards points buying Visa prepaid debit cards at Staples and (during promotions) Office Depot and OfficeMax, but if you have several Ink Bold, Ink Plus, or Ink Cash cards you're not maxing out at office supply stores, you might consider requesting a product change from one of those products to an Ink Business Unlimited.

Why? Because the 1.5 Ultimate Rewards points per dollar earned is unlimited, so you only need one of either the Freedom Unlimited or Ink Business Unlimited credit cards. If you're not using the bonus categories on an existing Ink card (even a no-annual-fee Ink Cash card), then switching to an Ink Business Unlimited might free up a personal Freedom Unlimited to be product changed to a valuable Freedom card offering 5 Ultimate Rewards points per dollar at quarterly rotating merchants, or even a Sapphire Preferred or Sapphire Reserve card if you're interested in the travel protection, bonus earning, or redemption uplift of those cards and aren't eligible to apply for them directly (due to 5/24 or simply having already earned the signup bonus too recently).

Referral bonuses

While not necessarily a reason to sign up in its own right, it's also true that Ink Plus and Ink Bold cardmembers can currently only refer friends and fellow business owners to the Ink Business Preferred, while I assume Ink Business Unlimited customers will eventually be able to generate links to Ink Business Unlimited applications (if they can't already).

So if you like earning referral bonuses but don't think the Ink Business Preferred is worth referring people to, you might want a card that can generate links to the no-annual-fee Ink Business Unlimited instead.

Conclusion

Many, if not most, long-time travel hackers are so far above Chase's 5/24 restriction that applying for new Chase credit cards isn't an option. But that's no excuse to ignore the launch of new credit cards, since additional cards open up new opportunities for product changes, and under almost no circumstances should you close a Chase credit card, given the difficulty you might have in opening additional ones in the future.

How I talked myself around on Chase ending pooled Ultimate Rewards points

When the travel hacking blogosphere erupted in recent weeks with "rumors" that Chase might, maybe, eventually end the ability to combine points between fixed-value Ultimate Rewards accounts and flexible Ultimate Rewards accounts, I met the rumors with a yawn, for two reasons:

• such a change would smash the value of their credit card portfolio and cause many heavy spenders to move their purchases to more valuable rewards programs, which you'd think Chase would want to avoid, or at least avoid admitting to their shareholders;
• and as a travel hacker, there's no use whining about how great things used to be, how terrible they are now, and how much worse they're going to be in the future.

The second point is still true, but over the weekend I had the chance to chat with a couple fellow travel hackers while up in Boston and managed to talk myself around to Chase's logic in ending points pooling, should they ever choose to do so.

Chase Freedom, Freedom Unlimited, and Ink Cash are bad cashback cards

I love my Freedoms, with which I max out the bonus categories 3-4 quarters each year, and I love my Freedom Unlimited, which gets a lot of my unbonused spend, but we need to clearly understand that they are lousy cashback cards.

The golden standard for a cashback credit card is 2% cashback on all purchases, with no annual fee. There are several such cards; the two I happen to carry are the Citi Double Cash and Fidelity Rewards cards, but there are others.

Note, however, that 2% cashback credit cards with no annual fee are invariably somewhat cumbersome: the Double Cash pays out 1% on purchases and 1% on payments. Fidelity Rewards have to be redeemed into Fidelity accounts, and you have to meet payout minimums and deal with their somewhat primitive rewards site. Both cards charge foreign transaction fees, as well.

In other words, 2% is the ceiling on the value banks are willing to offer their customers in cashback on purchases made with a no-annual-fee card, and even then, they do so only under duress and in the expectation they'll earn at least some of that value back in interest charges and ancillary fees.

Freedom, Freedom Unlimited, and Ink Cash cards fall far short of that ceiling. Instead of offering 2% cashback, Freedom and Ink Cash cards earn just 1% cashback. Instead of 2% cashback, Freedom Unlimited cards earn just 1.5% cashback. The gimmick — and let's be clear: it's a gimmick — is that Freedom and Ink Cash cards earn bonus points in certain categories, with the idea that a person who carries the card to make bonused purchases will also reach for it when making unbonused purchases, giving up a whole 1% cashback on those unbonused transactions.

With the launch of the Freedom Unlimited offer for 3% cashback the first year, we see something similar: if you can convince someone to use their Freedom Unlimited for all purchases the first year, when it's a good deal, then maybe they'll keep using it in later years, earning just 1.5% cashback and leaving 0.5% cashback for Chase to pocket.

Chase Sapphire Preferred, Ink Plus/Bold, and Ink Preferred cards are replacement-level travel cards

All three of Chase's "premium" travel credit cards are middle-of-the-pack offerings for business travelers and other heavy spenders. If you don't manufacture spend, then deciding between the flexible travel rewards cards offered by Chase, American Express, and Citi is just an exercise in optimizing between imperfect airline and hotel chain combinations.

This gives us access to what I think of as one of the most valuable insights of the economics profession: revealed preferences.

Since the Sapphire Preferred and premium Ink cards earn just one flexible Ultimate Rewards point per dollar on unbonused purchases, but the Freedom Unlimited pays 1.5 Ultimate Rewards points per dollar on unbonused purchases, we know for a fact that Chase values flexible points at least 33% higher than fixed-value points.

That is to say, if Chase has determined that a dollar of unbonused spend is worth, at a maximum, 1.5 cents in rewards, then a dollar spent with the premium cards earns 1 cent in cashback plus 0.5 cents in flexibility (adjusted for the hefty annual fees you have to pay whether you get any value from the cards or not).

This makes pooled points a problem for Chase

If fixed-value Ultimate Rewards points can be freely converted into flexible Ultimate Rewards points, then a dollar spent with the Freedom Unlimited costs Chase not the 1.5 cents they're willing to pay out on unbonused spend, but 2.25 cents: 1.5 cents in cashback plus 0.75 cents in flexibility.

It literally makes no sense that for a single $95 annual fee, someone can earn 2 flexible Ultimate Rewards points using a Sapphire Preferred for their travel and dining purchases and 1.5 flexible Ultimate Rewards points on all other purchases using a Freedom Unlimited. Even if the $95 annual fee covers the cost of making the Sapphire Preferred points flexible, it can't also cover the cost of making the Freedom Unlimited points flexible.

Points that are easy to earn are easy to redeem

Everybody knows my maxim that the least valuable point is the one you don't redeem. But for banks, it's just the opposite: when you redeem a point, they actually have to cut a check, whether it's to the airline or hotel you book a paid reservation with, or the partner you transfer your points to.

That means folks who redeem points confident that they'll be able to easily earn many more are much more expensive to a bank than the folks who, in making sure they only redeem points when they're able to get the "maximum possible value," never redeem their points at all.

So if Chase knows what they're doing, as I suspect they do, they've noticed that folks who are transferring in big balances from Freedom and Freedom Unlimited cards to flexible Ultimate Rewards accounts, and especially super-premium Sapphire Reserve accounts, are much more likely to also redeem their points for expensive partner transfers and paid reservations.

While they may be content with the rates they pay their travel partners, and even the redemption rate on paid travel bookings, Chase may not be content with the speed with which folks build up and redeem their balances. Restricting points pooling thus has the added benefit of slowing down redemption rates and leaving more points orphaned, perhaps permanently, or redeemed for cash.

Conclusion

If this change ever comes down in any form, whether it's restricting household pooling, restricting pooling between personal and business cards (forcing some folks to hold 2 premium cards), or eliminating pooling altogether, there won't be anything you can do about it, besides adapting and shifting your spending to more lucrative opportunities.

But in the meantime, you should certainly be combining all your Ultimate Rewards points into your most valuable account on every statement close.

Not because of any potential devaluation or restriction, but because it's common sense.

Travel hacking with less manufactured spend

It seems that the travel hacking community has been thrown into one of its periodic panics, first over the loss of a popular gift card reselling opportunity and then an online bill payment option. I don't participate in such panics myself, but it's an opportunity to ask the question: what would travel hacking look like not in a world without manufactured spend, but in a world with less manufactured spend?

It's a good question because in a world with plentiful manufactured spend, lots of things are worth doing that might not be in a more constrained world. For example, today I happily earn 1.5 Ultimate Rewards points per dollar spent with a Chase Freedom Unlimited card, essentially speculating that I'll get more than 1.3 cents per point when I ultimately redeem them (since I could use a 2% cash back card instead). That wouldn't make any sense (for me) in a world where every dollar manufactured on one card reduces the amount I can manufacture on the others.

So, here's what I would do in a world of severely constrained — but not eliminated — manufactured spend.

Chase Ink Plus or Ink Cash for office supply stores

I consider buying $200 or $300 Visa prepaid debit cards from office supply stores with a Chase Ink Plus or, if you're signing up today, Ink Cash, to be the best current opportunity, even though liquidating smaller-denomination gift cards can be time-consuming if you have to do it in-person. Paying $8.95 in activation fees and $0.35 for money orders lets you buy 1,545 Ultimate Rewards for $9.35. That's slightly more expensive than paying $4.30 for 756 Ultimate Rewards points by using a Freedom Unlimited at an unbonused merchant, but it's over twice as efficient, in that a single money order transaction made with four $300 debit cards earns 6,180 Ultimate Rewards points (at 0.6 cents each), while one transaction with four $500 debit cards earns just 3,024 points (at 0.57 cents each). In a world of limited manufactured spend, maximizing the total haul from each transaction would inevitably become a much higher priority.

Since flexible Ultimate Rewards points can be redeemed for 1.25 cents each for paid travel, doing this alone would let you earn $3,125 in paid travel each year for about $1,504.

Annual spend: $25,000 (Ink Cash) or $50,000 (Ink Bold or Ink Plus).

"Old" Blue Cash for grocery stores

For reasons that are beyond my petty comprehension, American Express still issues the "old" Blue Cash card that earns 5% cash back on up to $43,500 in purchases at supermarkets, gas stations and "select" drugstores in the United States. That's a devaluation from the previous, unlimited bonus earning, but it's still a lot of money.

Since grocery store spend is somewhat cheaper than office supply store spend, whether you prefer to prioritize Ink Plus or Ink Cash spend or "old" Blue Cash spend properly depends on the value you expect to get from Ultimate Rewards points redemptions.

Annual spend: $50,000.

Amex EveryDay Preferred for grocery stores

I almost hesitate to include this one since the cap on earning is so low, but if you can knock out $6,000 in grocery store purchases, then make enough additional purchases to get to 30 transactions in the same statement cycle, you can earn 27,000 flexible Membership Rewards points per year (and pay an annual fee of $95).

That's not very many Membership Rewards points, so in a world of unlimited manufactured spend you'd want to supplement them with, for example, a Premier Rewards Gold card. But in a world of less manufactured spend, it would roughly add up to a business class international award ticket every 3-5 years. That's not great compared to the status quo, but it's not terrible either.

Annual spend: $6,000

A good cashback card for unbonused spend

So far so good, right? The problem is that all these cards are terrible for anything except manufactured spend. The Ink Cash and EveryDay Preferred have foreign transaction fees (the "old" Blue Cash card does not for some reason), and the Ink Bold and Ink Plus only earn 1 Ultimate Rewards point per dollar on unbonused spend.

Obviously if you have a lot of money the answer is the BankAmericard Travel Rewards with Platinum Honors Preferred Rewards, which earns 2.625% on all spend, has no foreign transaction fee, and is PIN-enabled for use internationally.

If you don't have a lot of money, you can use the PenFed Credit Union Power Cash Rewards card, which earns 1.5% cash back, or 2% if you have a PenFed Access America Checking Account. It's PIN-enabled and has no foreign transaction or annual fees, although the checking account requires a $500 average daily balance or monthly direct deposit to avoid a $10 monthly fee.

For domestic transactions you might consider using a Chase Freedom Unlimited to top up your Ultimate Rewards balance, but that card also has a foreign transaction fee so shouldn't be used internationally.

Conclusion

I think this is roughly the strategy I would pursue if my access to manufactured spend were suddenly constrained. It's pretty cheap (two $95 annual fees), pretty lucrative, and isn't very time-consuming, requiring only an average of about 6 total trips per month.

It would yield 125,000 or 250,000 Ultimate Rewards points, $2,240 in cash, and 27,000 Membership Rewards points. Whether or not that's sufficient to cover all your travel expenses depends on how many travel expenses you have, but it would certainly make a dent in mine.

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!

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.

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.