UPDATE: The 7% annual points dividend is no longer a feature of the Sapphire Preferred Card, see current offer for full terms.
I’ve written a lot lately about Chase Sapphire Preferred® Card, which I consider to be the best all around credit card nowadays thanks to the double points on dining and travel, no foreign transaction fees, valuable transfer partners (Continental, United, Hyatt, etc.), reasonable annual fee, access to the Ultimate Rewards shopping mall, and last but not least, the 7% annual points dividend.
I’ve gotten a couple of emails lately asking for more details on the 7% annual points dividend, so I figured I’d make a quick post explaining what exactly the benefit entails.
The benefit is described as follows:
Receive a 7% annual points dividend on all new points earned — even on points already redeemed
And the fine print reads as follows:
You will receive a yearly bonus of 7% of all points you earned in the previous Year. (“Year” means, for your first year as a cardmember, the period beginning with your enrollment date through your December statement date of that same year. For each year thereafter, “Year” means the twelve month period beginning the day after your December statement date through your December statement date of the next year). Your bonus will appear on your January or February billing statement.
So basically at the beginning of the year you earn a bonus of 7% of all the points earned the previous year. The current sign-up bonus is40,000 Ultimate Rewards points after spending $3,000 within three months, plus an additional 5,000 points when you add an authorized user and they make their first purchase within three months, so since the 7% annual points dividend applies to that too, you’re really earning a sign-up bonus of 51,000+ points, depending on which categories you’re spending money in.
Furthermore, the verbiage suggests that this applies to all points earned, so that should include points earned through the Ultimate Rewards shopping mall.
As I blogged about a couple of days ago the Ultimate Rewards shopping mall rocks not only because they have some massive bonuses for everyday shopping, but also because points typically post within a week, compared to 6-8 weeks with most other programs.
So for example on Friday Best Buy is offering 10 bonus points per dollar spent. That’s in addition to the one point per dollar spent you earn on your Chase Sapphire Preferred card, for a total of 11 points per dollar spent. Then at the end of the year you earn a 7% points dividend on that, for a grand total of ~12 points per dollar spent. For a retailer like Apple or Best Buy, that’s an amazing value. You usually only see those kinds of bonuses for flower shops or Tijuana botox clinics.
When I initially signed up for the card it was because of the great sign-up bonus. Then I realized just how great the card was for everyday spent, especially after Continental terminated their relationship with American Express Membership Rewards. But now as I’m moving and trying to furnish my new apartment, I’m quickly realizing that the Ultimate Rewards shopping mall can be even more useful than either of the other two benefits.
Lastly, keep in mind that it’s not too late to still earn the 7% points dividend for this year. If you were to sign up for the card now and complete the $3,000 in spending over the next month, you could still earn the 7% points dividend in a couple of months, getting you the 3,500+ bonus points in a couple of months instead of in over a year.