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As an expert in credit cards and travel rewards, I know how to work the system. Up until COVID hit the U.S. this spring, I earned hundreds of thousands of points in Chase’s Ultimate Rewards program, which I redeemed to take personal and business trips nearly every month.
But I haven’t traveled since March. And it’s unlikely that I’ll travel again this year. So what do rewards credit card users like me do with all of the travel rewards that we’ve earned?
Thankfully, Chase now offers several non-travel ways to redeem rewards, called Pay Yourself Back℠. Should you use your points for these new options?
How Chase ‘Pay Yourself Back’ works
Before COVID, there were two ways to redeem Chase Ultimate Rewards points for travel rewards. One way was to transfer rewards to airline miles and hotel points, which includes brands such as United, Southwest, Hyatt and British Airways. You would then have to redeem those points or miles through their respective programs.
Alternatively, you could redeem your Ultimate Rewards points directly through Chase’s Ultimate Rewards Travel Center, which is now powered by Expedia. Options there include airfare, hotels, rental cars, cruises, activities and transfers; pretty much anything you would find at Expedia.com. If you have a Chase Sapphire Preferred or Ink Business Preferred, these points were worth 1.25 cents each towards travel reservations, and Sapphire Reserve cardholders received 1.5 cents in value per point redeemed.
But with travel down dramatically, (and cruise ships mostly out of the picture), Chase introduced new ways to redeem points for non-travel rewards. Act quickly, though. Through September 30, 2020, you can redeem points for statement credits towards purchases in the following categories: grocery stores, restaurants (including takeout and eligible delivery services), home improvement stores and donations to select charitable organizations.
Just like the option to redeem points for travel reservations, Chase Sapphire Preferred or Ink Business Preferred receive 1.25 cents in value per point redeemed in the Pay Yourself Back program, and Sapphire Reserve cardholders received 1.5 cents in value per point redeemed.
Is this a good deal?
Yes and no. It’s a good deal if you are looking for ways to get the most value from points right now, and you aren’t traveling. Chase touts these Pay Yourself Back options as offering 25% and 50% more value than redeeming points for gift cards, merchandise and cash back. So you’re definitely better off redeeming Ultimate Rewards points for restaurant, grocery and home improvement expenditures, then you are for most other options. (When it comes to charitable donations, it might be better to simply write a check, as you’ll have no problem claiming a tax deduction that way.)
Personally, however, I’m holding off on redeeming my points for groceries, dining or home improvement purchases. That’s because I hope that it will be safe to travel again next year, and I find that I’m often able to realize better than 1.5 cents per point when I transfer my rewards to airline miles and hotel points. When travel resumes, I’d love to redeem my miles for an international trip or a luxury hotel stay, and I think I’ll enjoy even more value for my saved rewards. Also, it’s likely that my next vacation or two will be to destinations within driving distance, and I can still transfer my Chase points to Hyatt and redeem those for the hotel stays.
Chase Cards that offer Ultimate Rewards Points
Sapphire Preferred. Sapphire Preferred offers 2x points on all travel and dining, and has an annual fee of $95. New applicants receive 80,000 bonus points, worth at least $800 in rewards, after spending $4,000 on new purchases within three months of account opening.
Sapphire Reserve. Chase’s flagship rewards card offers 3x points on all travel and dining, and has an annual fee of $550. Benefits include airport lounge access, a $200 annual travel statement credit, a $120 DoorDash credit and a $100 credit towards a Global Entry or TSA PreCheck application. New applicants receive 50,000 bonus points, worth at least $750 in rewards, after spending $4,000 on new purchases within three months of account opening.
Freedom Unlimited. While this card isn’t part of the Pay Yourself Back program, Freedom Unlimited does offer rewards that you can transfer to your Sapphire Preferred or Sapphire Reserve card. You earn 1.5 points per dollar on all purchases with no limits. New applicants earn $200 in cash back after spending just $500 on new purchases within three months of account opening. You also receive 5x points on groceries for the account’s first 12 months (limited to the first $12,000 spent). There’s no annual fee for this card.
With Chase’s new feature, your choice is to redeem points now at a good rate, for non-travel rewards, or hold on to them in the hopes of finding even better travel later, when you resume traveling. Either way, you’ll be glad to receive valuable rewards from your Chase rewards cards both this year and in the future.
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