Why Chase Ultimate Rewards Is Falling Behind in the Rewards Race

Why Chase Ultimate Rewards Is Falling Behind in the Rewards Race

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Chase has widely been considered a leader in credit card rewards for years. When it introduced the Chase Sapphire cards in 2009, Chase was catapulted to the front of the credit card space.

In 2016, Chase reached the peak of popularity with the launch of its Chase Sapphire Reserve® card. Chase's new luxury card product had such high demand in the month of its release that Chase actually ran out of cards to print.

However, the Chase Ultimate Rewards® program is beginning to lose its allure. The program hasn’t made any changes to its partners in some time, and other credit card reward programs are beginning to challenge Chase through perks with their various rewards credit cards.

Why Is Chase Ultimate Rewards so popular?

Chase Ultimate Rewards established itself as a leader in credit card rewards through its excellent credit card products and flexible redemption options.

The cards that earn Chase Ultimate Rewards offer hefty sign-up bonuses, broad spending categories, comprehensive travel insurance, purchase protection and more.

Furthermore, between the Ultimate Rewards portal and Chase's transfer partners, your redemption possibilities are nearly endless. If you prefer convenience, you can book a flight through the travel portal and receive a 25% to 50% bonus if you own the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve® card. You can achieve an even better value by transferring your points to Chase’s partners. For example, you can transfer your points to British Airways Executive Club and book American Airlines flights using British Airways Avios.

This full offering of outstanding card products along with robust redemption options has made Chase Ultimate Rewards cards hot commodities. Competitors like American Express and Capital One have historically lacked a strong card product or valuable redemption options. It has only been in recent years that competitors have made efforts to enhance their products to compete with Chase.

Chase Ultimate Rewards cards

CardsGreat for...Sign-up bonusSpending categoriesAnnual fee
Chase Sapphire Preferred® CardOccasional travelersEarn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.2X points on travel and dining at restaurants, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases worldwide.$95
Chase Sapphire Reserve®Frequent travelersEarn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards.3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases.$550
Ink Business Preferred℠ Credit CardSmall business owners with high spending.New Offer! Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening. That's $1,250 toward travel rewards when you redeem through Chase Ultimate Rewards.Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.$95

Recent changes to Chase Ultimate Rewards cards

Recently, the value of Chase's cards have come into question amid strong competition from other card issuers, along with some recent changes that have decreased the value of its products. At the beginning of 2020, Chase announced that it was raising the Chase Sapphire Reserve®’s annual fee by $100 to $550 per year. While several benefits were added to the card, many cardholders began to question its value. Shortly after the increase, the country began its shutdown due to the coronavirus outbreak.

Chase made adjustments to both the Chase Sapphire Preferred® Card and Chase Sapphire Reserve® cards in response to COVID-19. With cardmembers not utilizing benefits such as travel credits and travel insurance, Chase compensated by adding several limited-time benefits, including new earning categories and new categories for the Chase Sapphire Reserve®'s $300 travel credit.

Unfortunately, while these benefits may help retain cardholders, they fall short of the value of the cards' travel benefits. In the meantime, Chase has made little progress in differentiating the Ultimate Rewards program from its major competitors: American Express and Capital One.

Chase Ultimate Rewards vs. American Express Membership Rewards

There have been conversations for years in the points and miles space on who is the top dog between Chase Ultimate Rewards and American Express Membership Rewards. While American Express has been doing an excellent job to cater to customers wants and needs during the coronavirus crisis, its rewards program easily demonstrates better value through its travel partners.

Here is the breakdown between the partners that both programs have in common and the unique partners for each program:

PartnerChaseAmerican Express
Aer Lingus
AeroMexico
Aeroplan
Alitalia
ANA
Asia Miles
Avianca
British Airways Executive Club
Choice Privileges
Delta Air Lines
El Al
Emirates Skywards®
Etihad
Flying Blue (Air France/KLM)
Hawaiian Airlines
Iberia
Hilton Honors
IHG® Rewards Club
JetBlue TrueBlue
Marriott Bonvoy™
Qantas
Singapore Airlines KrisFlyer
Virgin Atlantic Flying Club
Southwest Airlines Rapid Rewards®
United Airlines MileagePlus®
World of Hyatt®

American Express has a much longer list of both domestic and international airline partners, as well as unique hotel partners.

The only partner that Chase can hang their hat on is Hyatt. The World of Hyatt® program is extremely valuable as it has a wide range of properties, and its fixed award chart keeps Hyatt points at a high value.

Southwest and United Airlines, on the other hand, are less valuable partners as their award pricing is dynamic. This means that the amount of points or miles needed for a flight can fluctuate at any moment based on demand, making the rewards less desirable.

Further to its credit, American Express offers a robust portfolio of personal and business credit cards to earn Membership Rewards. In comparison to Chase cards, American Express overall provides a much better return on spending. Many credit card fanatics call the "Amex Trifecta" — including the The Platinum Card® from American Express, American Express® Gold Card and The Blue Business® Plus Credit Card from American Express — one of the best points earning combinations available.

If you are more focused on cashback rewards, American Express has excellent cashback options as well. In all, American Express has a better credit card portfolio for three reasons: more products, less restrictive application rules than Chase (i.e. Chase 5/24) and more robust travel partners to transfer points to.

If keeping it simple with one credit card for your spending better suits you, any of these American Express credit cards can potentially reward you for your spending:

Chase Ultimate Rewards vs. Capital One miles

Capital One has routinely fallen behind Chase and other competitors. Its portfolio of cards is limited as it only has the Capital One® Venture® Rewards Credit Cards, the Capital One® VentureOne® Rewards Credit Card and two business credit cards that earn Capital One miles. However, Capital One has a much broader list of transfer partners than Chase, including recent additions, Wyndham and Accor.

One important note when transferring rewards is ratios. All of Chase’s travel partners transfer points at a 1:1 ratio. So for example, transferring 10,000 Chase points equates to 10,000 United Airlines miles. With Capital One, the ratio is 2:1.5 for most partners, with some partners at 2:1. So by transferring miles with Capital One, you are losing a bit of value. But if you find a great award flight or hotel room, it may be worth it.

While Chase remains at a standstill with making enhancements to their program, Capital One continues to innovate to deliver value to its cardholders.

PartnerChaseCapitol One
Accor Live Limitless
Aer Lingus
Aeromexico
Air Canada (Aeroplan)
Alitalia
Avianca
British Airways Executive Club
Cathay Pacific
Emirates Skywards®
Etihad
EVA Air
Finnair
Flying Blue
Iberia
IHG® Rewards Club
JetBlue TrueBlue
Marriott Bonvoy™
Qantas
Singapore Airlines KrisFlyer
Southwest Airlines Rapid Rewards®
United Airlines MileagePlus®
Virgin Atlantic Flying Club
World of Hyatt®
Wyndham Rewards

The choice between Chase and Capital One, depends on which set of travel partners better fits your travel needs. However, Capital One’s list of transfer partners of partners is slightly more valuable because of a wider variety of airline partners.

Is Chase Ultimate Rewards still worth it?

Chase’s luster is fading as other programs continue to add partners and add new incentives. If Chase continues to be stagnant in its value proposition, it could potentially lose ground as one of the best credit card rewards programs.

However, Chase Ultimate Rewards is absolutely still worth investing in, if it works for your travel needs. With excellent personal and business credit card options, Ultimate Rewards is nothing to scoff at. Regardless if you book through the Chase travel portal or transfer your points, Ultimate Rewards points are still extremely valuable.

Interested in learning more about the Chase credit card family? Read about the best Chase credit cards.

The information related to The Business Platinum Card® from American Express has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.

Brett Holzhauer

Brett Holzhauer is ValuePenguin’s travel rewards expert, focusing on credit card rewards maximization, consumer travel trends, and personal finance news. He has earned and burned over 5 million points and miles throughout his travels, saving him roughly $75,000 in travel expenses.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).