Best Credit Cards

Is Chase Ink Plus the Best Thing Since Sliced Bread?

This is yet another installment in my “Sliced Bread” series. First, the sign-up bonus of 60,000 points on Chase Ink Plus is very attractive, so no problem there. It’s “awesome sauce,” though, not the “awesomest sauce” because it was as high as 70,000 points in the past. Be careful because the minimum spend is quite high at $5,000 in 3 months.

This particular offer will end on March 1st and does pay me referral. Check inside the branch to see if they can waive the annual fee. You can qualify for this bonus as long as you haven’t received it in the last 24 months.

OK, sales pitch out of the way, phew! So, let’s say you get this card. The question arises: Should you keep it past the first year? Does this card justify $95 annual fee for a normal family? Many think it does, especially if paired up with Chase Freedom. What’s attractive about it is the fact that you can take advantage of 5% bonus categories on both cards, and transfer the points to programs like Southwest and Hyatt.

Many of my readers are fans of both programs, which is perfectly fine.  I love Southwest too, and for 5,000 points per night for Category 1, many Hyatt properties are a good deal, especially during holidays. Still, I wanted to make a comparison. We will have two teams of cards. No battles, just a friendly debate this time:

1. Chase Ink Plus and Chase Freedom

Chase Ink Plus comes with $95 annual fee and earns 5 Ultimate Rewards points on gas, cable and office supplies purchases. It also earns 2 points on gas stations and hotels.

Chase Freedom earns 5 points in rotating categories, 1 point everywhere else.

freedom

2. Amex EveryDay Preferred and Sallie Mae Barclaycard  (no longer available for new sign-ups, also see this post for reviews of all best long-term cards) 

Amex earns 4.5 Membership Rewards points on groceries, 3 points on gas and 1.5 points on everything else. You have to make 30 transactions in order to get this payout. Annual fee is $95.

Sallie Mae earns 5% cash back on groceries and gas (on up to $250 in each category per month); 5% on book stores, including Amazon (on up to $750 per month).

The argument

One of the reasons folks like Chase Ink Plus is due to the fact that you can buy gift cards at office supply stores like Staples, and get 5 points per dollar. One of the best ways to leverage this is to stock up on Amazon and gas station gift cards, since you can rarely find a discount on those elsewhere. You can see a full list of gift cards and corresponding stores in this post on DansDeals

So, let’s assume that we have a large family who  spends a lot on Amazon. Their imaginary budget breaks down like this:

1. Gas:   $200 per month

2. Amazon: $300  per month

3. Dining:  $300 per month (mostly fast food and Starbucks)

4. Groceries: $750 per month

5. Cell phone: $100 per month

6. Everything else: $350 per month

The total is $2,000 per month.

Let’s say the family is willing to purchase dining, gas and Amazon gift cards and don’t mind juggling two credit cards in their wallet on top of that. You can buy Visa gift cards at Staples, though only $200 denomination (with $6.95 fee). You can also buy Visa gift cards at some gas stations and get 3 points per dollar with Amex EveryDay Preferred.

But let’s assume they don’t want to go this route, and prefer to use credit cards for everything else. Both spouses are anal retentive and very conscientious of bonus categories and which card should be used for each and every purchase.

The rewards breakdown

We assume that they buy gas station, dining and Amazon gift cards at office supply stores in order to get 5 points per dollar, and maximize Freedom when it’s a bonus category.

Using Chase Ink Plus and Chase Freedom, you will get:

1. Gas: 12,000 Ultimate Rewards points.

2. Amazon: 18,000 points.

3. Dining: 18,000 points.

4. Groceries: 7,500 points from the first quarter; 7,500 from the rest of the year. Total of 15,000 points.

5. Cell phone: 6,000 points.

6. Everything else: 4,200 points.

Grand total: 73,200 points.

We will utilize Sallie Mae Barclaycard for gas, Amazon and $250 in grocery bills each month. Using Amex and Sallie Mae cards, you will get:

1. Gas: $120

2. Amazon: $180

3. Dining: Here is a small twist. You can buy Starbucks and many other restaurant gift cards at 10% off (or more) by searching Giftcardgranny

burger king

And here is another example:

starbucksI usually stock up on fast food gift cards and use my new credit card in order to reach minimum spending requirements.

So, assuming we use Amex and get 1.5 MR points per dollar, plus 10% off (conservative estimate), the total will be:

5,400 MR points, plus $360 we’ve saved on gift cards. Remember, when we use Chase Ink Plus, we are foregoing the 10% in savings.

4. Groceries: 27,000 MR points, plus $150 cash back with Sallie Mae.

5. Cell phone: 1,800 MR points ( we get 1.5 points per dollar with Amex)

6. Everything else: 6,300 MR points.

Grand total: $810 in cash back and 40,500 Membership Rewards points.

Assuming that you value MR and UR points equally (I do), you would essentially be trading $810 in cash back  for 32,700 Ultimate Rewards points. Taking into account the fact that you can make up for Amex annual fee through various promos, the number is actually $905.

I’ve gotten over $100 worth of discounts on places like Walmart and Staples in one year, and that doesn’t even take into account Small Business Saturday promo that netted me $60 on just one Amex card. By that logic, you would be buying Ultimate Rewards points for 2.77 cents a piece.

That’s extremely steep and means that even a category 1 Hyatt will cost you $139 per night based on this logic. And that’s for their lowest tier redemption!  I simply don’t find Hyatt option all that compelling, to be honest.

To be clear, I’m not talking about using points from your sign-up bonus, but rather devoting all of your credit card spending with the idea of getting “free” Hyatt stays. As you can see, they are far from free. One possible exception where it could make sense is if you plan to redeem during New Year’s Eve or other major holidays.

There is another compelling argument for Amex+Sallie Mae combo. You would only have to deal with gift cards for restaurants. Personally, I hate gift cards, especially for gas stations, so to me, this is a huge plus.

Of course, I’m not here to tell people which cards they should or shouldn’t use. I simply want to encourage everyone to do their own math and crunch the numbers to make sure they are getting  optimal return on their credit card spending. Every point you earn has a cost associated with it.

The Devil cards’ advocate 

Segment within a segment alert! If you have a Southwest Companion Pass and plan to leverage the heck out of it, you may want to stick with Chase Ink Plus/Freedom combo. That’s because every Ultimate Rewards point you transfer to Southwest will yield around 1.61 cents in flight credits (factoring in tax). Bringing companion will double it to 3.2 cents.

Incidentally, Southwest has just announced that you will no longer be guaranteed that fixed value for Wanna Get Away fares after April 17th. My guess  is that international flights will get closer to 1 cent per point, especially during popular times.

Remember, awards to Caribbean and Mexico usually cost considerably more miles in traditional award programs. I would book those Southwest flights now if you had any plans to do so. Obscure routes to visit grandma will probably still yield the same value. Well, unless grandma lives in Los Cabos or Aruba.

Why did Southwest decide to introduce this dynamic (read “less transparent”) pricing? IMO you can thank the trifecta of Chase Ink Plus/Freedom card/Companion pass for that. Too many points+ too many free companions=devaluation.

At the moment,  you can bring  a friend for free with your pass, so you get 3.2 cents per point, which beats 2.77 cents by  a decent margin. This scenario makes Ultimate Rewards program somewhat appealing.

buy southwest points

Keep in mind, you can buy up to 60,000 Rapid Rewards points at a cost of 2.75 cents each. Plus Southwest runs sales on those fairly often. But if you don’t want to risk a rise in price, you may want to stick with “buying” your points via credit card rewards.

Bottom line

While Chase Ink Plus/Chase Freedom combo is superior to Chase Sapphire Preferred in terms of rewards, IMO it’s not the best fit for most regular families. The annual fee may not seem like a huge amount, but in ten years, it will add up to almost $1,000. That’s a potential vacation right there.

Additionally, cash is king. Points are valuable, but only to an extent. Don’t ever forget that when you collect them through your everyday spending, you are buying them with real money. Are you happy with the price you are paying?

Readers, what do you think of my analysis? Agree or disagree?

If you liked my post, please, subscribe to receive free blog updates through email and recommend me to your family and friends. You can also follow me on Twitter, like me on Facebook  and download my e-book  If you found my content helpful, consider doing your Amazon shopping through my site

 

Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

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13 thoughts on “Is Chase Ink Plus the Best Thing Since Sliced Bread?

  1. Wow! As a newbie, I only have the AA and US Air card. It’s almost been 3 months since last application date. I’ve had “a” Chase card on my list, researching which one to get first, Ink or Saphirre. This breakdown let’s me know, with our amount of spending, how many UR we are missing out in every month.

    • Stacy, I’m glad you found it beneficial! Everyone has different spending patterns, but I try to present numbers that are somewhat realistic for a normal family in America. As far as which card to get first: Chase Sapphire Preferred or Chase Ink Plus, it depends on whether you plan to keep it in the long run.
      If you are after Ultimate Rewards and don’t mind juggling gift cards, Chase Ink Plus is the winner in the long run. I don’t think Chase Sapphire Preferred is a great fit for most regular families past the first year. It’s targeted towards business travelers who spend a lot on dining and travel.
      Overall, both have a terrific sign-up bonus. Of course, Chase Ink Plus is superior, especially with this limited offer of 60,000 points. It has been as high as 70,000 points in the past, but no telling on whether it comes back. Some report getting the annual fee waived inside branch. If you live near one, it might be worth it to go in and ask. If you don’t live near Chase branch, you can apply online and message Chase asking to waive the fee. No guarantees, of course.
      So, to summarize: if given the choice between two cards, I would go with Chase Ink Plus right now, especially if you can get the fee waived and if you can meet the spend.

      • I got the Chase Ink Plus last year when it had a 70,000 bonus in the bank branch. I love the card! I put my cell phone and cable bill on it, and I’ve been going to Staples to pick up Amazon, Kohls and Petco gift cards for our normal spending. And recently I discovered that Staples is carrying Disney gift cards, so I’ve stocked up on some for our upcoming trip. 🙂

  2. @Shoesinks I bet you are making out like a bandit on those Disney gift cards as far as UR points go! 🙂 I know you have a Companion pass, so it makes sense to go that route. I’m glad you got in on that 70,000 points offer. Not sure if they will bring it back. I suspect they were pushing it due to the fact that Chase Ink Bold was phased out. Of course, you never know with these things.

  3. These analyses are awesome. And it seems like you are one of the only bloggers who does this.

    Have you ever done a Post on the right cash back stategy overall? In wondering if I focus on cash back for a while in preparation for next years but trips. I’m guessing some sort of combination of the freedom and discover card? For the portal bonuses?

    • @Cheapblackdad Thanks, I’m so glad you found my post beneficial! As far as the best combination of cash back cards, Freedom+Discover combo could work, but only if you can maximize the bonus categories. They do tend to overlap sometimes, but if you are willing to purchase gift cards, this strategy may be a winner for you.
      You might also want to read this post http://milesforfamily.com/2014/02/24/what-if-sallie-mae-married-amex-bcp/
      If you spend a good chunk on groceries or are able to buy Visa gift cards, this combo may work. Of course, it would require a hard pull for each card. The biggest downside of this combo is the fact that Amex BCP and Sallie Mae earn 1% on non-bonus categories. Obviously, you can do better. If you happen to have any Citi cards you don’t use, see if you can convert one to Citi Double Cash card. It earns 2% on everything and has no annual fee. If at all possible, I advise you try to convert the cards you already have so as to avoid a hard pull on your credit, especially if the card you want comes with a small sign-up bonus. Of course, it’s not always an option.
      I also recommend you take a look at my post on best 2- card combinations and see if you can find one that matches your needs http://milesforfamily.com/2014/01/27/yes-chase-sapphire-preferred-can-be-a-keeper/

  4. Thank you for your reply. I think I will apply for the Ink Plus and see what happens. My husband travels every week, so the Sapphire may work out better for him. We are trying to accrue enough points for a 1-2 week a Europe trip. May be impossible, lol!

    • Stacy, no problem. Both cards are good, it just depends on your spending patterns.
      I also encourage you to watch out for annual fees. They are waived for the first year, but after that both cards have $95 fee. That can add up over time. I recommend you take a look at some other long-term cards ( link in the post). Sam’s Club MasterCard is something to consider, especially if you shop at Sam’s. It gives 5% on gas, 3% cash back on travel and dining. If you only redeem points for economy flights, you might be better off earning 3% cash back instead of 2 Ultimate Rewards points.
      Basically, my point is: There is no perfect card, it depends on your goals. Both CSP and Chase Ink Plus are great in the first year due to sign-up bonus and waived fee. Whether you should keep them afterwards is debatable. I am very fee-averse, and I encourage my readers to be the same way. It’s not that you should never pay annual fees, just make sure to do the math and see if it’s worth it.
      I don’t think it’s impossible to accrue enough points for your Europe trip. I’ve mentioned US Bank Club Carlson Signature Visa and Chase IHG Rewards card. If both you and your husband get one of each, it should give you a pretty good supply of hotel points. If you don’t mind taking risk, you may want to look into purchasing Choice points via Daily Getaways promo that is set to return in March. The stash will have to sit there till next year, though. You can only book 60 days ahead for international locations. Overall, I think you can cover most hotel stays with points. Just don’t depend on them entirely. Plus, you may find something via vacation rental site that you like better.

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