Home Credit Cards Should You Use Ultimate Rewards Points To “Pay Yourself Back?”

Should You Use Ultimate Rewards Points To “Pay Yourself Back?”

by joeheg

In June 2020, Chase introduced a new feature for Sapphire Preferred and Sapphire Reserve cardholders. They introduced the “Pay Yourself Back” tool, which allowed you to use your points to erase charges in specific categories. This was a great move at the time because cardholders couldn’t use the points to book travel and may have been considering ditching their premium travel cards.

The original categories were restaurants and grocery stores (including takeout & eligible delivery services), and home improvement stores. To make things even more appealing, Chase provided the same bonus to this use of points as they did if you were booking travel through the Chase portal. Which meant Reserve cardholders got a 50% bonus and Preferred cardholders a 25% bonus.

Over the past two years, Chase has made several changes to the program. First they expanded it to all of its Ultimate Rewards earning cards, both personal and business. They also tweaked the categories for redemptions, eliminating the original categories for the Sapphire cards and replacing them with Airbnb and donations to select charities.

The only time I used the tool was to research it for our post on how to redeem points, which is still the same as in 2020. However, my dad cashed out his Ultimate Rewards for 1.5 cents each before canceling his Sapphire Reserve card.

Chase has announced changes to the Pay Yourself Back program. These include new redemption categories and reduced bonuses for using points to erase charges.

The Sapphire Reserve is now offering the following categories.

  • Gas Stations – 25% bonus
  • Grocery Stores – 25% bonus
  • Select Charities – 50% bonus
  • Annual Fee – 25% bonus

The Sapphire Preferred has the same categories but with no bonuses and no ability to pay the annual fee. 

  • Gas Stations
  • Grocery Stores
  • Select Charities – 25% bonus

The Ink Preferred card has the following categories:

  • Shipping – 25% bonus
  • Internet, cable and phone services – 25% bonus
  • Select Charities – 25% bonus

The no-annual-fee Ink Cash has similar categories but lower bonuses.

  • Shipping – 10% bonus
  • Internet, cable and phone services – 10% bonus
  • Select Charities – 25% bonus

Finally, the no annual fee Freedom Unlimited only has one redemption option.

  • Select Charities – 25% bonus

Should you still be using Chase Ultimate Rewards points to Pay Yourself Back?

Some are complaining about the new categories, but the big gripe is the 25% “devaluation” for Chase Sapphire Reserve and Preferred cardholders. The claim is that making points less valuable has destroyed the program’s usefulness.

I have to ask, why were you still cashing your Chase points out at 1.5 or 1.25 cents? During the pandemic, when point balances were growing and with little need to transfer points to airline or hotel partners, it made sense to use points to erase larger-than-usual grocery store or food delivery expenses.

But now, why not transfer those points to Aeroplan, KrisFlyer, United or Hyatt? If your Ultimate rewards balance is still too high, there are plenty of ways with different cards to earn at least 2 cents per point and erase any charge that you want.

I’m sure some people use their Chase cards for thousands of dollars per month through organic or manufactured spending. For them, this change will make a big difference. But the Pay Yourself Back tool has served its purpose for the rest of us using our Chase cards to earn Ultimate Rewards for award redemptions.

Put it in the category of things you should never do with your Ultimate Rewards, along with using them for Amazon purchases or redeeming them for gift cards.

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This post first appeared on Your Mileage May Vary

1 comment

Leon Dubin January 3, 2023 - 4:01 pm

I have had the chase trifecta for four years and the point value of 2 cents per point is ludicrous. United is maybe 1.2 per cent ish. I’ve heard Hyatt has good point value but I have Marriott and Hilton status (via Amex Platnium). I challange you to justify 2 cent per point cash out. I personally am downgrading my Reserve because this move absolutely guts point value to 1 cent

Respectfully,
Leon

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