Credit Cards

Chase Sapphire Preferred Eliminates 7% Dividend, Adds Collision Waiver

One of the key benefits of the Chase Sapphire Preferred card, aside from the initial sign-up bonus and travel/restaurant category bonus, has been the annual 7% dividend paid out annually on all point earnings. This payout wasn’t significant for folks who were using the card for everyday spend, but for those involved in manufactured spending, this bonus could be big enough to off-set the $95 annual fee.

Chase is doing away with this feature for good. Current applicants will notice the 7% annual dividend is left out of the marketing bullet points altogether. Chase has confirmed that current Sapphire Preferred cardholders will keep their dividend bonus benefit through 2015, with the last dividend payout occurring in February 2016.

With the devaluation of multiple Ultimate Rewards transfer partners and now the upcoming elimination of the 7% dividend on the Sapphire Preferred card, this may leave little incentive to keep the Sapphire Preferred beyond the initial sign-up bonus. The 2 points on dining and travel? I can get that with the Barclay Arrival Plus card or I can more than double my earnings to 5 points per $1 by purchasing merchant gift cards with the Chase Ink Bold card. The problem is, the Sapphire Preferred was one of the first cards for many card churners and so far, there has been some justification for keeping it open. However, now that the benefit is going away and the currency has been devalued, many of us won’t want to cancel the card because it’s one of our oldest accounts. Well played, Chase.

It’s not all bad, since Chase is offering primary rental car collision damage waiver and increasing trip cancellation coverage from $5,000 to $10,000. This is a nice benefit because the next time the guy at the McCarran Airport rental kiosk tries to strong-arm you into getting collision coverage, you just whip out your Sapphire Preferred card and tell him in an equally condescending tone, “it’s covered with the card.”

Overall, these changes aren’t great but not worth creating an angry hashtag over – though that won’t stop some people.

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  1. Since the CSP saved me a TON of money on insurance on a recent 10-day car rental in Ireland, I’m inclined to keep it for now…

    • PointChaser

      I can see how that’s extremely valuable for you. In my case, I hardly ever rent cars so the benefit is lost on me.

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