Ultimate Rewards Redemption
Previously, Chase merely bored me, but things change. I think the bank blows now more than ever. I’m still a Chase customer, albeit an somewhat-unengaged one. I’ll take the relatively-small Chase wins along the way, knowing I can do so much better focusing on other bank relationships. But the circle is now complete with my Chase Ultimate Rewards redemption strategy, in a way I found inevitable. I’m considering that today.
My Chase Ultimate Rewards Redemption History
The Good, Old Days
For many years, my preferred Ultimate Rewards redemption was cashing out each point at a penny each. “Preferred” is definitely a pun and understatement here, as it’s the exclusive redemption I made for all those years. I opted for simple cash for a myriad of reasons, including:
- My wife and I already held healthy travel loyalty program point balances. The last thing we needed was to stack more points on top of our travel loyalty accounts which participated with Ultimate Rewards. Doing so wouldn’t have resulted in any true rewards for the foreseeable future, since those additional balances were of zero defined need.
- Chase offered no other superior redemption options for us. Without the need for anything else Chase offered, one cent per point was solid enough.
- We avoided costly annual fees. Many of Chase’s best cash back cards, including the Freedom and Business Cash, are fee-free.
- More access to attractive cash back rates. Downgrading cards like the Ink Business Preferred and Sapphire Reserve/Preferred gave us more access to 5% cash back options.
- We enhanced our freedom (travel and otherwise) with cash back. I use that cash back redeemed from my Chase cards to travel exactly the way I want and maximize the discounts I can obtain while earning rewards with the selected travel entity (and portal bonuses, etc).
My wife and I were fully satisfied earning Ultimate Rewards points at scale and cashing out at one cent each. Then, a global pandemic arrived.
Pay Yourself Back
Almost six years ago, Chase officially unveiled the Pay Yourself Back feature. Ultimate Rewards points, and eventually other reward currencies from certain cobranded cards, could be used to cover purchases. More importantly, Chase goosed the redemption values of Ultimate Rewards points for such redemptions to 1.25 and 1.5 cents per point. The selection of categories first eligible for Pay Yourself Back were arguably the best:
- Grocery stores
- Home improvement stores
- Dining, which included restaurants, takeout, and eligible delivery services
Chase Sapphire Reserve and Preferred cardholders could redeem Ultimate Rewards to cover purchases at a 1.5 and 1.25 cpp values, respectively.
Looking back, this was the high point of our Chase relationship. Overnight, Chase was rewarding my wife and I at a 50% higher rate for something we were already doing. One of us held a Sapphire Reserve at all times so that we could cash out in a variety of 50% categories. It was still a no-brainer for us even when the Reserve rates for the best categories decreased to 25%. After taking into account the Sapphire Reserve’s other benefits, we were still doing substantially better at that level than 1 cpp with all fee-free cards.
Over time, the 25% bonus Pay Yourself Back categories became less user-friendly for us, but the math still checked out. We made it work. Then, Chase threw us all a bucket of wrenches.
Chase Sapphire Reserve Refresh
With the Sapphire Reserve Refresh, Chase controlled the attention of existing and prospective credit card holders like no bank has, since, well, the Sapphire Reserve initially launched. For a hiked annual fee of $795, Chase provided a myriad of benefits with varying values and inevitable complications. Certain card benefits turned out to be less attractive than many originally perceived. After diving into the terms and conditions, certain annual perks for single-year cardholders might be better-described as nine-month benefits. At that point, I decided I was done with the Reserve for the foreseeable future. Nothing has changed there, except that I’m even less confident I’ll ever return.
The In-Between
Since I backed out of my Reserve space, I’ve modestly collected Chase rewards via Freedom spend. I maximized my previous 5%/5x Ink Business Cash spend and related redemptions before downgrading my Reserve, but I have another cardmember year resetting in the next couple months. For the past few, I’ve let my Chase rewards currency gradually pile up and decided to see what happens.
Would Chase provide me any reason to make a significant change, perhaps back to the Reserve or otherwise? The former isn’t the case, as I mentioned above. But Chase made no tweaks to encourage me to redeem in any other way beyond cash. Actually, Chase’s most valuable loyalty program transfer partner did the opposite. Hyatt annihilated its loyalty program with a significant devaluation. I had mildly considered upgrading a Business Cash to an Ink Preferred to transfer Ultimate Rewards points to Hyatt for some travel goals. I’m now better off not upgrading. And that brings me to last week.
Hello Again
I simply couldn’t find anything else I’d rather do with those rewards. I knew where I was headed, but Chase gave me yet another reason to get on with it. Effective 27 March, Chase Freedom, Sapphire, and Ink cardholders can no longer redeem cash back for deposits to non-Chase accounts. Last week – almost six years since my last one cpp cashout redemption – I redeemed my Chase rewards balance at one cent each for deposit to my non-Chase bank account. I don’t see my Chase redemptions changing any time soon, and that’s fine. I’ll continue to earn 5% cash back via our Freedom and Ink Cash accounts. Well, maybe not that first one any time soon, since the biggest second quarter participant is one I generally avoid.
Conclusion
I’m at peace with my return to cashing out Chase’s rewards for a penny each. Indeed, the reasons I expressed in the Good, Old Days section still apply. But it is surreal. Those remarkable Pay Yourself Back redemptions at 50% extra value, that feels just like yesterday. Back then, I shook my head at the surprising value Chase brought out of nowhere. Could something similar occur in the future? I’m not holding my breath.
How are you feeling about your Chase Ultimate Rewards redemption preferences now?
First of all it is “my wife and me” not “my wife and I” God people are such idiots with respect to this simple expression. Secondly, I pity the person that has to rely on cash back to live. I worked hard, invested well and live on my portfolio income. My points are ALL for travel. If I don’t get 2-3 cents/point (or often more with international first or business class travel) I simply pay for it. I don’t understand the under class that has to pick up pennies to live – so sad.
Yes, Chase UR points ecosystem has been decaying for 5 years. Less benefits, less value from partner transfers, and last nail is removal of extra cash back XX% last year.
They went from great program to complicated POC after trying to beat Amex too much, and also cutting expenses left and right despite loosing hoards of their enthusiasts. And those were the highly profitable years for US banks, including Chase, with over the top cash flows. So imagine what can happen in slow years, which are approaching…
But it goes in cycles or waves, so similar good opportunities should be back in another 3-5 years from now.