There were a lot of angry people after the recent United and Hyatt devaluations since it also decreased the transfer value of Chase Ultimate Rewards points. This prompted many people, including myself temporarily, to shun the use of the Sapphire Preferred card in favor of other cards. After all, Ultimate Rewards points had been watered down pretty heavily (who would want to spend so much money to earn 160K points just to get one round trip Business Class flight to Asia?) while the Barclay’s Arrival card provides the best cash back rate at 2.22% on all purchases.
Many people switched to the Arrival card for normal purchases in order to earn cash back since the new, super-high redemption rates on United were no longer worth attaining (except through manufactured spend). But let’s take a step back and evaluate the current values of these cards.
As a reminder, the Sapphire Preferred card gives 2x points on all travel and restaurant purchases. It also provides a year-end dividend of 7% on all the points earned the previous year. Therefore you can look at the card as earning 2.14 points-per-dollar on travel/restaurants and 1.07 points-per-dollar on all other purchases. If you book travel through the Ultimate Rewards Portal, your points are worth 1.25 cents each, plus you can transfer them to partners to potentially get even more value.
On the other hand, the Arrival card earns 2x points on all purchases, but there are no transfer partners so it is strictly cash back. Each point is worth 1 cent, and if you redeem the cash back for travel purchases, then you get a 10% rebate. That means you essentially earn 2.22 points-per-dollar on all purchases.
So let’s compare the value of the points we earn from these two cards in a couple of examples.
Example 1: $15K of Annual, Non-Bonused Spending
The points earned shown above should be straightforward. The value might require some further explanation for some people, so here’s how I got to those numbers: with the Sapphire Preferred card, you can redeem your points for travel at 1.25 cents per point (that’s why they say the 40K sign-up bonus is worth $500). So the 16,050 points multiplied by $0.0125 becomes $200.63. With the Arrival card, each point you earn is worth only 1 cent (but remember you earned 2 points on the purchase, so it’s like being worth 2 cents) plus a 10% rebate. So the 30,000 points are multiplied by $0.011 and becomes $330.00.
Thus, for non-bonused spend, the Barclay’s Arrival Card is far superior to the Sapphire Preferred card when redeeming for travel purchases in my opinion.
Example 2: $15K of Annual, Bonused Spending
In the bonus categories of travel and restaurants, the Sapphire Preferred card will earn 32.1K points that would be worth $401.25 in travel. The points earned and subsequent value from the Arrival card remain completely unchanged at $330.00 since it has no bonus categories.
That means all purchases on travel and restaurants should be put on the Sapphire Preferred card, with pretty much no exceptions (except if you have a 5x option). Also consider that UR points are more flexible with the transfer partners and can potentially be worth much more.
Summary
The Barclay’s Arrival card has undeniable value, particularly for non-bonused spending. You earn 2.22 cents per dollar on everything, making it superior to all other cards that provide some form of cash back. The only other card I’d put in the same category in terms of value is the SPG Amex, since SPG points are flexible and have a high potential value.
The Sapphire Preferred card is still the best card to use for travel and restaurant purchases, assuming you don’t have a 5x option. Not only are the points more valuable when redeeming for travel through Ultimate Rewards, but you have the added flexibility of choosing to transfer them to one of several transfer partners in case you find a better option. Remember, there is a sweet spot around $312.50 for redeeming through Ultimate Rewards vs transferring points.
Ugh I started using Arrival for almost everything. Good thing I didn’t cancel my CSP yet.
Disagree. The analysis doesn’t take into account where you are spending the money correctly in my opinion. I looked into this for a similar study and it is clear that the prices in the UR Travel portal are marked up, which cancels out the 25% bonus.
Additionally, If you use the Barclaycard by not being limited to their travel portal, so you can avoid paying the higher prices and also take advantage of coupon codes, shopping portal bonuses etc to drop the price even lower.
I’ve found prices in the UR portal are only rarely higher, and even then it’s only by a small amount.
I’ve found prices on the UR portal to be competitive to Barclays, and sometimes cheaper for travel. Considering the wider array of options you have with UR, whether you book through UR or via point conversion, it tends to allow you to find a better deal. Barclays has not doubt the better point conversion rate, but a little extra effort actually puts the sapphire on equal footing with barclays. Plus UR portal isn’t limited to travel. There’s a lot more to reward yourself with if you care about other fine things in life as well
I think you should also factor in the annual fees if you are assuming you will get the 7% annual dividend bonus.
I would probably say that an Ink Bold/Plus card with a Sapphire basic card is a better 1-2 combination than the CSP by itself.
Both cards have the same annual fee…
At this rate of devaluations we’ll almost need to start throwing the Capital One Venture cards in there for comparison.
With the Arrival card, I’m hoping we never have to discuss CapOne cards! (assuming no huge bonuses)
Not too far off. Arrival card is 2.2 points per dollar, CapOne 2 points per dollar. Of course the only reason I even have it is from that huge 120,000 point sign-up bonus they had when it started. CapOne just keep waiving my annual fee every year.
Could you do a detailed comparison with the SPG card as well. Consider the annual fee of $65 as well. I’m deciding where next years non bonused spending will go. I’m starting the year with meeting the $25k spend to get the extra 10k miles for both my Amex Delta Plat and the Chase United Explorer. Also hitting the extra $25k ($50k in total) on the United Explorer. Travel/restaurants go to Sapphire. Inks get all the office supply gift card stuff. But after that,,,where do I put non bonus spending? My other choices are Amex Personal Plat,Lufthansa,IHG and some Citi AA cards,,but they are low point earners. Looking like either B Arrival or SPG?
You’re not the only one asking me this question, so I’ll try to write up an analysis soon. My short answer is that if you’re looking to get the best value, the SPG card is my favorite. It also provides added flexibility with the transfer partners. It’s a bit of a subjective measure, though, since you may not necessarily want to stay at SPG hotels.
Arrival card is good , particularly if you go to Europe. It helps paying for Euro rail, Easyjet, Ryan Air, etc. If you go to Japan, it pays for Japan Rail Pass. I got the card a month ago. But I am debating if I would keep it for the 2nd year. I’ll see if Barclay will give me any incentive.
I used in in Turkey a few weeks ago as well! I’m assuming they’ll give you an incentive since they usually give one for their other cards.
Funny how the tide of popularity can shift! Until maybe a month ago, CHASE Sapphire Preferred was touted as the “Best card in the world!”. I have both CSP and Barclay’s, and have started shifting most of my non-category spend to the Barclay’s.
Your calculations need some amplification:
Your examples basically show that the more your spend in the Travel & Dining categories, the better CSP looks (2.5X vs Barclays 2.2X). In my case, I charge my Dining to the CITI Forward card, earning 5X, so CSP doesn’t help me there. I do understand that 5X is no longer the case for new Forward accounts tho.
Most people won’t spend $15K/year just on travel and meals. A more appropriate example might be 2/3 non-category, 1/3 category. If you keep the total spend the same ($10K + $5K) you end up earning $ 320 (CSP) vs $330 (Barclays). Barclays wins.
So aside from the big new-account bonus on CSP (40K), the card really isn’t turning out to be of much benefit. Now that I am putting min spend on CSP, why keep the card on renewal? Well, I can get a RT on Amtrak in the Northeast (BOS-DC) for 8K pts, putting the points value at maybe 2ct/pt. Also, with CSP (or one of the premium Ink cards), I can get 25% discount on car rentals or hotels. That’s been a big help in the past.
Overall, I like 2X in cash better than anything — which basicallt means the Fidelity AMEX Investment Rewards card. Yet guess where my spend was b/f I switched it to Barclays?? FIDEL AMEX!
It’s a complicated world if you want to maximize your rewards. I suppose the alternative is to regress into passive behavior, and just carry a single, 1X rewards card!! I don’t think so!
Thanks for all the good info to chew on
— Scott
FYI I understand on renewal, there is a no-fee Barclays — still 2.2X, but somewhat more restrictive in its reward structure.
Your example #1 doesn’t apply to the majority of your blog readers. People aren’t going to redeem 15K UR points for travel via the Chase UR portal. They are going to xfer it to United or Hyatt and redeem it for a hotel or airfare that could possibly be worth up to 2 cents per UR point. You have to let the reader value their Chase UR point. If they value it at more than 2.2 cents (by redeeming it for international premium travel or a suite at a top tier Hyatt hotel), then it still might make sense for them to use the CSP card.
But if that hotel night is only $150, it makes a whole lot more sense to use 12K points from the UR portal vs using 15K points. You definitely have to make that valuation on your own, but you can’t dismiss the UR option.
if you are part of the chase banking ecosystem, you could get a higher return on UR points by taking advantage of freedom rewards using the 5% categories. Furthermore, if you have a checking account with them, you get an annual 10% on top of that. If you take full advantage of the categories, that’s 33k points on a 6k spend. Obviously this really depends on a person’s expenses, but it’ll make sense to people who hit the typical gas, grocery and shopping categories.
Anyways, point being, you can redeem 1.1%+ off your freedom/checking and then transfer it to your sapphire UR point total, which only helps the cause. Personally, I’ve been able to get returns north of 1.6% without trying to maximize the 5% promotions simply based on my spending habits. If I actually took the effort, I could feasibly break 2%, but at full potential, I’d be looking to eke out another .5~1% depending on my spending that year
Best bet is just to have both cards and use the CSP when you’re getting the bonus categories then the Arrival when you’re not.