Should You Keep Both Sapphire Preferred and Arrival Card?

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Reader Bundy asked the following question on the “Ask Lucky” page of the blog:

What is your take on keeping the Barclay Arrival Card & Chase Sapphire Preferred Card past the annual renewal date? I did my calculation and it seems hefty to recoup the annual fees.

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I would consider these two cards to be the two travel “super cards,” if I could only choose two. They both have:

  • Extremely flexible points currencies
  • High return on everyday spend
  • No foreign transaction fees
  • Annual fees of under $100 (both waived the first year)

I should also note that I love the Starwood Preferred Guest® Credit Card from American Express and would put it in the same league as these two, though it does have foreign transaction fees.

Chase Sapphire Preferred® Card earning rates

With the Sapphire Preferred Card you earn:

Barclaycard Arrival Plus™ World Elite Mastercard® earning rates:

With the Barlcaycard Arrival Plus Card you earn:

  • Two miles per dollar spent
  • 10% refund of miles redeemed
  • Each mile can be redeemed for one cent towards the cost of a travel purchase, which means you’re basically earning a 2.22% return on everyday spend

Comparing earnings rates between the two

The math on the Barclaycard is easy — you’re earning a return of 2.22% per dollar spent.

What about the Sapphire Preferred? I value Ultimate Rewards points at roughly 1.6 cents each, so you’re earning a return of ~1.6% on everyday, non-bonused spend.

But that doesn’t factor in the double points on dining and travel. Roughly half of my credit card spend falls in those two categories, though I realize everyone has different spending patterns. So for me, I’m earning an average return of 2.4%+ per dollar spent on the Sapphire Preferred. Of course that doesn’t represent the average consumer, and for others the math works out differently.

Say, on the other hand, a quarter of your spend fits in the dining and travel category. If that were the case, you’d be earning an average of ~1.25 Ultimate Rewards points per dollar spent, which I consider to be a return of ~2%

Chances are that regardless of which card you have, you’ll come out roughly even.

So can it make sense to pay the annual fee on both cards?

Both cards have no annual fee the first year, so they’re at least worth taking for a “test drive.” What about after the first year, though? The Sapphire Preferred has a $95 annual fee while the Arrival Plus has an $89 annual fee. So while both cards individually have reasonable annual fees, chances are you won’t get enough marginal “return” out of the second card to justify it. Unless…

You value “hedging” your mileage “portfolio”

When it comes to having miles and points there’s both such a thing as over diversifying and under diversifying.

By my definition, over diversifying would generally be when you have so many different points currencies that you don’t have enough in a single currency to redeem for an aspirational award. Under diversifying would be when you have so many points in a single program that you’re totally screwed if there’s a mega devaluation.

So if you’re a fairly big credit card spender, there’s something to be said for not putting all of your eggs in one basket. I’ve explained in the past that I like having Arrival miles for subsidizing fuel surcharges on award tickets, as it certainly makes those redemptions sting less.

Bottom line

These really are the two “super cards” when it comes to travel, given the return they provide on everyday spend as well as the lack of foreign transaction fees. If I were putting under $50,000 or so per year on the card I’d probably choose just one, based on whether I valued travel “cash” more, or whether I spent a lot on dining and travel.

But for a really big spender it might be worth having both cards in your wallet just for the sake of diversifying the points you earn.

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Comments

  1. So funny – my post about keeping the Arrival card with the annual fee posted at the same time as this one! Great minds, or something like that… 🙂

  2. Are these so much better than the Everyday and Fidelity 2% straight cash? Both of those have no annual fee

    Sure, get the arrival for the signup bonus (and again, and again, …) but use the Fidelity to hold and keep year over year.
    If you choose to keep the Arrival with the annual fee, you need to spend >$45k to make up that amount rather than just using the fidelity amex.

    Duly noted Amex vs MC distinction, and Arrival cash restricted to travel put on their card, but it just looks like the above advertisement is based on purely referral bonuses and not good faith advice

  3. Super cards? Nonsense…I have neither of these cars, and last time I checked, I know what I am doing.

  4. I have the Fidelity AmEx 2% card too and generally agree with Erich’s comment that it would be hard to justify paying the annual fee for the Arrival.

    However, if the Arrival Rewards Boost portal continues to offer 4% on AmEx gift cards, it’s easy to recoup the annual fee and more. With some effort, can be used to earn 6.6% on most of your credit card spend.

  5. I have both of these cards and the math works out for me. All travel/dining goes on the Sapphire. Everything else goes on the Arrival. And then other more specific cards for other stuff, but I think it’s possible to have them both.

  6. I beg to differ with you. How are those cards better than Amex Everyday Preferred?

    SPG Amex used to be most hyped card, now chase sapphire preferred and Arrival…

  7. And then you might want to add the Freedom card for additional UR points with the quarterly bonus categories

  8. I keep the Preferred ’cause I want to transfer my UR points around. The Arrival points are ridiculously flexible, you can’t beat ’em for travel to non-chain hotels, etc. I only have about $5,000 spend/month, but can’t make myself get rid of either one.

  9. @BlackHill

    So what’s your point about the SPG AmEx as being the “most hyped card” and now it’s not? In its day, it was a good card. But it hasn’t kept up with the times. AmEx still has to fight the fact that its cards aren’t quite as widely accepted as Visa/MC. It doesn’t bonus categories, unless you somehow manage to generate 20,000 points and transfer them to an airline other than United. Even then, you only get a 25% bonus.

    The Chase combos with SP and Ink bonus the heck out of a decent variety of categories, and have multiple useful transfer partners. It really is a superior pairing.

  10. I’ve recently been crunching numbers on this exact question. I love the Arrival card, but when I really look at the numbers, I just can’t justify having both cards and paying the two annual fees, given my level and categories of spend. I am able to rack up UR points more quickly, and their flexibility make them more valuable to me. Yes, for instance, I could get 40K Arrival points, worth $440. But that same 20K UR points will get me almost to an airline ticket on, say, UA or AA worth way more than the $440. Every which way I look at it, I come to the same conclusion in my case. Really interested to hear others’ takes on this. Thanks.

  11. I have the ink bold too, for UR transferability. CSP is just lying around – as i use ink bold for 5x and arrival for most everything else.

  12. You aren’t considering the fact that the sooner you cancel the cards, the sooner you can reapply and get the signing bonus. That blows away the 2% or so which you get on spending

  13. @Cogswell

    I was under the impression that Barclays is rather strict about not issuing the bonus more than once. Not so?

  14. @ Gene — I clearly defined “super cards” by my definition, and am curious which cards you have that are as versatile and rewarding as these.

  15. @ Erich — Fidelity 2% is great, though it has foreign transaction fees, and this post was more about “if you could/should you only have one card.”

    The Arrival Card has a $440 sign-up bonus, and while it also has an annual fee, it’s year five before you come out behind using it, at worst. Sure if you want to only churn cards then you can argue get it for the sign-up bonus and dump it, but all around I do think it’s still pretty compelling.

  16. @Dan, I never said SPG Amex was/is good(now or then). Most bloggers went gaga over Amex SPG before, now they are doing the same with CSP and Arrival.I’m not sure why you have to bring out Ink card into this since this article talks only about CSP and Arrival.

    Here is my argument,

    1. Gives 1.5 MR points for all purchases as long as there are atleast 30 transactions in a billing cycle(To most point junkies it should not be a problem at all)
    2. Gives 3 MR points for all Gas transaction purchases including manufactured spending.
    3. Gives 4.5 MR points for super markets purchases up to $6000/yr.
    You can use other cards like Arrival when you are out of the country.
    Ink Plus and Everyday Preferred always stay in my wallet.

  17. Sapphire Preferred is the only card I’ve ever seen that seems to give travel insurance benefits on award tickets. If you charge you $2.50 fee or whatever and they delay your luggage, you can get insurance. I think that is a unique benefit that is worth the $95 alone.

    Same thing with the Chase United Explorer Card. Having primary rental car insurance is worth the annual fee on the card, even with no spending.

  18. Sorry for skimming. I generally don’t read all the credit card pushing posts carefully. Anyway, ok these cards meet your definition, but that doesn’t make them super. Of course, I am not the average user, with $500,000 of annual spending, so my strategy isn’t likely fto be appropriate for your average reader. Generally, for big MS spenders like myself, cards with threshold bonuses are more lucrative, and constantly opening new cards is even more lucrative.

  19. Lucky,

    Are we able to get the Arrival card and then after a year, switch to the no fee one?

  20. @Lucky,

    Thanks Lucky for your reply. Ok since you make a valid point that I should probably cancel 1 card, (I plan to cancel Barclays Arrival). Do you know the best way to utilized the points before my annual fees are due? I don’t think I am planning to travel or I don’t think I can spend all my points. Do you know where I can spend it – some travel giftcards?

    My 2nd question is a little more advance. Some of the previous post mention that they have the Fidelity 2% card. I also have the Fidelity 2% card. I was wondering if it make sense to cancel BOTH cards since the incremental benefits are so small and its not worth paying for the annual fees. Whats your take? Should I keep one diversification? I believe you can downgrade the Sapphire card.

    Thanks in advance/

  21. I second Ginny’s question. I haven’t seen any posts on success or failure with downgrading the Arrival to a no-fee version.

  22. @ Bundy — Can you maybe book future travel that you know you’ll take now? That seems like the best way to cash out those points.

    You can downgrade the Sapphire Preferred to the Sapphire. Ultimately I do think it’s worth keeping one card for the lack of foreign transaction fees, since that’s valuable if you travel internationally. Whether it’s worth keeping one of them over the Fidelity 2%, well, you’ll have to crunch the numbers for yourself and decide based on your spend if it makes sense. If you’re not a huge credit card spender that might be a good option.

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