Is Upgrading from Chase Freedom UnlimitedÂ^® to Chase Sapphire Worth it?

The Sapphire Preferred^® and Sapphire Reserve^® are some of Chase’s most sought-after credit cards—and for good reason. They are high-quality travel cards that both offer enticing sign-up bonuses, a lucrative Chase Ultimate Rewards^® system, and a sense of exclusivity for those who hold them. All of these factors are persuading reasons on why it is worth it to obtain these cards if you can. Both are great options depending on what you're looking for. Make sure to compare Chase's Preferred and Reserve cards side-by-side before applying.

However, if you’re currently holding the Chase Freedom Unlimited^® card, there are two ways for you to obtain either of the Sapphire cards. You can either:

1. Upgrade your current Chase Freedom Unlimited through a product exchange for the Sapphire Preferred or Sapphire Reserve.
2. Apply for the Sapphire Preferred or Sapphire Reserve through a new application, keeping your current Chase Freedom Unlimited card.

Which option should you choose?

Let’s take a deeper look into the pros and cons of each scenario to determine your best course of action. Both are great options regardless. You can compare both cards here as you follow along with the article.

Exchanging Your Chase Freedom Unlimited Through an Upgrade

The Pros

Maximize Your Accumulated Points’ Value - Chase has a very favorable points interface where you can keep all of your accumulated points when you upgrade a card. Additionally, when upgrading to the Chase Sapphire Preferred or Chase Sapphire Reserve, you’ll get 25% or 50% more value, respectively, when you use your points for hotels, flights, cruises, or car rentals through the exclusive Chase Ultimate Rewards portal. In short, your points’ purchasing power immediately goes up.

Maintain Your Credit Score and Portfolio - An important rule to keep in mind when applying to or upgrading cards for Chase is the “5/24” rule. The “5/24” rule is this: if you have opened 5 or more new credit cards from any bank in the past 24 months, you will not be approved for a new Chase card. This implies that if you are at the 5 card limit, but one of your cards is the Chase Freedom Unlimited, you can actually still get the Sapphire Preferred or Sapphire Reserve because you are not opening a new card. If you are in this position, upgrading would make sense, especially if you are looking to travel a lot in the near future.

The Cons

Lose Out on Welcome Offers - When you upgrade your Chase Freedom Unlimited, you won’t be qualified for the initial point bonuses for the Chase Sapphire Preferred or the Chase Sapphire Reserve. This is the biggest con to upgrading your card, as each of the Sapphire cards has bonuses worth hundreds to thousands of dollars.

Lose Out on 1.5% Cash Back for Everything - The Chase Freedom Unlimited is unique because you get 1.5% cash back for every purchase, no matter the category. On the flip side, both the Sapphire Preferred and Sapphire Reserve cards offer only 1x points for purchase outside of travel or dining, which translates to about 1 cent per dollar spent. You lose out on the 1.5% cash back if you upgrade.

Keeping Your Chase Freedom Unlimited and Submitting a New Application

The Pros

Score on Attractive Bonuses - As mentioned before, the Sapphire class of cards have attractive sign-up bonuses. The Chase Sapphire Preferred offers 60,000 bonus points in the first three months of opening if you spend $4,000. Similarly, the Chase Sapphire Reserve offers 50,000 bonus points for the same spending. These bonus point values easily translate to over $600 worth on their own, not even considering the high point multipliers each card already has.

The Chase Freedom Unlimited Has No Annual Fee - The Chase Sapphire Preferred and Chase Sapphire Reserve have annual fees of $95 and $550, respectively. However, the Chase Freedom Unlimited has no annual fee, meaning it costs no extra to just keep the card open. This makes your credit rewards more diverse at no extra cost. Additionally, keeping this line of credit open can actually also help your credit score in the long-run if you manage payments on time.

The Cons

A Hard Inquiry on Your Credit Score - When applying for a new credit card, the credit card issuer conducts a hard inquiry, also known as a “hard pull,” on your credit information. This is something that stays on your credit report for about two years, and it can actually lower your score by a few points. However, if you are applying for the Chase Sapphire Preferred or Chase Sapphire Reserve cards, you already probably have a high credit score, so this will not have too much of an impact.

Managing an Extra Card - If you decide to apply for a new card and keep your Chase Freedom Unlimited, it simply means an extra card for you to use and manage payments on. However, as long as you are aware and willing to keep track of it, there can be no major harm.

Final Analysis: Keep Your Chase Freedom Unlimited (If You Can)

It seems that the major pros of signup bonuses and diverse rewards paired with minimal cons of a hard pull to credit likely outweigh those of just upgrading your Chase Freedom Unlimited Card. This means that as long as you have the credit reputation and are under the 5/24 rule, applying rather than upgrading for the Chase Sapphire Preferred or Chase Sapphire Reserve cards is the better option. However, as with all things related to credit, everything is situational to each person. Considering the major benefits that you receive by wielding a Sapphire-class card in the first place, both applying and upgrading for them are great options.