Chase Changes Rules On Sign-Up Bonuses For Popular Sapphire Credit Cards. How Does It Affect You?

The Chase Sapphire credit cards have been popular for the last few years.  They earn Ultimate Rewards points, one of the most flexible currencies you can collect and redeem for travel.  I recommend these cards frequently to people who don’t travel for a living and are looking for an easy way to accumulate useful points.

I’ve held a Chase Sapphire Preferred card for a number of years.  Chase introduced a new premium card, the Chase Sapphire Reserve, last year.  A bunch of folks jumped on the lucrative sign-up bonus and initial generous terms.  Now, Chase has announced new restrictions on the Sapphire cards.

Doctor of Credit reported the news yesterday that you’ll only be able to hold one Chase Sapphire card going forward.  When I first started seeing the headlines roll in from fellow travel bloggers I thought this was a really bad change for the occasional traveler.  But, the more I think about it, the less I’m concerned.

Chase is giving direction on product changes, where you call Chase and ask to be switched from Sapphire Preferred to Sapphire Reserve.  I would rarely recommend product switching.  If you don’t want the small negative impact to your credit score that comes with applying for a new credit card, you probably shouldn’t be applying for a card in the first place.

Folks can continue to earn a sign-up bonus when they sign-up for a new Chase Sapphire card.  If you already have a Chase Sapphire card, the right procedure will be to cancel that card before applying for a new one.  Don’t ask to switch products.  The sign-up bonuses are too lucrative to miss out on.

The Final Two Pennies

The lesson to take away from yesterday’s announcement is to think a bit more carefully if you’re applying for a Chase Sapphire card for the first time.  If you pick one and decide to switch, you’ll have to cancel and re-apply.  You will have to wait 24 months from the time you received a sign-up bonus to receive it again.  But, if you have Chase Sapphire Preferred now and the Reserve bonus pops back up to 100,000 points, it may be worth cancelling your Preferred and grabbing the Reserve.  Given how Chase has publicly admitted they’re concerned about a drag on their earnings based on how much they paid out to Reserve customers in the first year of the card, I don’t expect to see that 100K bonus back anytime soon.

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