Credit cards can be dangerous things. Many of us have dealt with outsize credit card debt at one time or another, and it’s common knowledge that the fees for carrying that debt can be astronomical, especially if you pay only minimum balance. But what if I could introduce you to a credit card that pays you every time you use it? Better still, what if that credit card paid out points that you could use almost anywhere, and that behaved almost like real money? Would you be interested? Well, that product exists—the Chase Sapphire Preferred Visa Card. Like most other credit cards, the revolving debt will kill you, but if you use it strategically, you can actually make money.

Key Facts

Name: Chase Sapphire Preferred Visa Card

Where to get it: J.P. Morgan Chase and Co.

What’s the price: Free the first year, $95 per year following

What’s the interest rate: 16.99-23.99%
What are the main benefits: 5000 bonus points for first purchase, 2x bonus points for travel and dining worldwide, 1 point per dollar spent on every other purchase, points can be used on the Chase Sapphire Rewards website, with all major hotel and airline loyalty programs, and on Amazon

What other benefits are there: Auto rental collision damage waiver, trip cancellation / trip interruption insurance, travel and emergency assistance services, extended warranty protection, purchase protection

What I love

When you use Sapphire Preferred strategically, you can make real passive income. By strategically, I mean, use it to pay for most or all of the things you buy (groceries, gas, movie tickets, subscription services, digital purchases) on a daily basis. Even use it to pay your bills if you can. But then pay it off every month. If you pay the full statement balance every month, you won’t incur any interest charges, but you’ll get a generous helping of rewards points, and you can use those points almost like money. Perhaps the biggest benefit is that Amazon accepts them like currency. If you register your Sapphire Preferred card with Amazon, they will know how many points you have, and when you check out, you will be given the option to use your points to pay for all or part of your purchase. Using this technique, most of my Amazon purchases during the year are absolutely free. Since Amazon sells practically everything I could want to buy, by using the Sapphire Preferred card for the majority of my purchases and then shopping with points on Amazon, I stretch every dollar. It’s like being paid just to use the card.


For travel the benefits are really amazing. After using the Sapphire Preferred card for several months, I was able to accumulate enough points to pay for my last trip to Tampa—airfare, hotel and rental car—by booking my trip using the Chase Sapphire Rewards website. I found the website easy to use and full of desirable travel services, and Chase was true to it’s promise that there were no blackout dates. I was able to use the points just like money.

I also like the Chase Blueprint program, which allows you to pay off a portion of your statement, but let another portion revolve. So, for example, let’s say in a given month you use your Sapphire Preferred card to purchase groceries, gas, Netflix, Hulu, and to take your SO to dinner and a movie. But your sofa, which you’ve had since college, suddenly collapses in two and you and your SO also choose to purchase a new sofa using your Sapphire Preferred card. You can split your bill into the sofa and everything else, pay off everything else, and only incur interest on the price of the sofa, which you let revolve because it was an unexpected emergency purchase. The Blueprint program also lets you divide the price of the sofa into your choice of equally sized installment payments so that you can pay it off quickly and lower your borrowing costs.

What I Dislike

The interest rates on this product are astronomical, and Chase has all sorts of little tricks up its sleeve to get you to incur revolving debt. In the first place, you can only get this card if you have very good to excellent credit, meaning you are not over leveraged. Then, when you get the card, Chase encourages you to over leverage yourself by giving you an enormous spending limit. I got my Sapphire Preferred card when I had less than half of the net worth I have now, but I was given a $30K borrowing limit. That’s insane! That’s a decent car! They wave temptation in front of your face. Don’t give in to that temptation.

Second, because the card offers such generous rewards, you’ll want to use it a lot, and you may even justify in your head that it’s ok to overspend because you’re essentially getting paid to do it. Don’t. It’s a trap. The points you obtain never outpace the interest payments Chase levies.

Lastly, Chase’s Blueprint payment plan is a double edged sword. While its great to have spending power for an emergency and still be able to minimize your interest, Blueprint can tempt you to borrow more than you can afford and justify it by saying you’ll use the Blueprint tools to minimize the interest. Better to just pay off the full statement balance every month.

The Final Verdict

Sapphire Preferred can be a very useful financial product for if you use it strategically, and pay off your statement balance every month. It’s high purchasing power and flexible payment plans also make it a good card to have in an emergency. But it’s very easy to fall into the high interest revolving debt trap with the Sapphire Preferred card, so, whenever possible, I advise you use it like cash. Do that, and it’s a very powerful tool to have in your wallet.




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