When Chase launched the Sapphire Reserve Card about a year and a half ago it was probably one of the hottest credit cards to ever be introduced. Not only were the perks and spending bonuses competitive, but the sign-up bonus for the card was extraordinary, to say the least. Chase offered 100,000 points after $4,000 spent in the first three months, which was worth $1,500 in travel when redeemed through the Ultimate Rewards Travel Portal. Chase hit their sales goals in the first two weeks, causing some customers to be delayed in receiving their cards. Ultimately, Chase claimed to have lost money based on the bonus — but I think regardless it was incredible for the long term success of the brand. The 100,000 point bonus was understandably not sustainable, which leads us to where we are now — both the Chase Sapphire Preferred and Sapphire Reserve offering a 50,000 point sign-up bonus after $4,000 of spend in the first three months.
So, cards have the same sign-up bonus, but the Reserve carries a $450 annual fee while the Preferred is only $95 — which is waived the first year. One of the biggest questions I hear is, “why would I pay such a large annual fee when the Preferred gets me basically the same benefits?”
An extremely valid question, and like any other question here, it all depends on you the customer. For me, I see incredibly value in keeping the Reserve card, but let’s break down the benefits of each first.
Chase Sapphire Reserve
- $300 Annual Travel Credit
- 50,000 point sign-up bonus after $4,000 spent in the first 3 months
- 3x points spent on travel and dining
- Priority Pass Lounges Select Membership
- Global Entry fee waived every 4 years
- Travel and Purchases Insurance
- 50% bonus in points when redeemed through the Chase Ultimate Rewards travel portal
- Access to Chase transfer partners
- Much more access to luxury travel privileges
Chase Sapphire Preferred
- 50,000 points sing-up bonus after $4,000 spent in the first 3 months
- 2x points spent on travel and dining
- 25% bonus in points when redeemed through the Chase Ultimate Rewards travel portal
- Travel and Purchases Insurance
- Access to Chase transfer partners
First, the annual fees
Yes, $450 is a lot of money to be paying for a credit card, especially for someone of my age and financial standing. But in reality, it is only $150 when you subtract the $300 annual travel credit. This travel credit is all things travel — airlines, cruises, Uber, taxi, parking garages, and so much more– so if you normally spend $300 on these categories throughout a year (which to me adds up very fast), the travel credit similarly cancels out a large chunk of the annual fee. If you don’t normally spend $300 on travel throughout the year, this may not be the card for you.
So, assuming you can take advantage of the travel credit, you are looking at $150 vs. $0 the first year, but the Reserve also comes with a Global Entry fee waiver every 4 years. Even if you already have Global Entry, I would suggest taking advantage of this voucher by buying it for one of your friends or family members that is planning on buying it anyways. This voucher carries a $100 value, which brings down the annual fee to $50 the first year. So now we are looking at $50 vs. $0 in annual fees the first year.
Next, does spending bonus make such a difference
First, and most obvious, is 3x points on travel and dining with the Reserve versus 2x with the Preferred — so I want to break that down further to determine how much more value we can really get while spending on the Reserve. But it is also worth noting that the Reserve will get you 1.5 cents a point when redeemed through the Ultimate Rewards portal, where the Preferred only gets 1.25 cents a point. Looking just at the sign up bonus of 50,000 points, that is $750 in value from the Reserve, but only $625 from the Preferred. Right there, you are looking at $125 more in value.
Travel and dining are probably two of my biggest spend categories — unfortunately, since I am on the road a lot I am forced to eat out, instead of buying groceries. That makes these bonus categories for both cards that much more enticing.
For the sake of simplicity, I am going to say that I spend $200 a month on dining, and $100 a month on travel (this is personal travel only). So that is $3,600 a year on travel and dining — which I will round up to $4,000 (I think even that is conservative, but it will serve its purpose here). Based on straight up value, this is only a difference of 400 points. But when you take into consideration the value when redeemed through the Ultimate Rewards portal, the 3,600 Preferred points is equivalent to $45 (3,600 x 1.25 cents) and the 4,000 Reserve points is equivalent to $60. Ok. Well I did that math expecting there to be a bigger difference. But as I mentioned, I think that was a conservative estimate of spend. And while it doesn’t represent huge value, you can see that depending on the amount of spend in these categories could yield a very high return.
The deciding factor here comes down to how much you spend on travel and dining. You are not only getting 1 more point per dollar spent on travel and dining, but you are also getting 25 cents more when redeemed through the Chase Travel portal. I find enough value here, compounded into other categories that make the Reserve worth it for me.
Finally, the perks galore
I must say, this is a very millennial-like category. I not only want all the points and spending bonuses, I also want the nice things on the side — like the Priority Pass membership, or the complimentary car insurance. I find incredible value in the Priority Pass membership — as someone flying through Atlanta quite frankly, I am able to visit The Club at ATL whenever my flight is delayed or my layover is a bit longer. Free booze never hurts, and the food is definitely above par. I know plenty of people that are never able to utilize this perk, but part of it is making yourself aware! The network is growing within the US, so whenever you are traveling I’d check for a lounge or restaurant where you are — Priority Pass has restaurant vouchers on top of some of their lounge access passes. I wanted to point out one more perk that I haven’t got a chance to take advantage of yet. With the Chase Sapphire products you get purchase protection, where Chase will price match your purchase as long as you use the card. I have read some pretty lucrative success stories, so if you have the card, or are thinking about it, definitely keep this in mind.
The simple answer to a question of which card to get is “it depends” — but that is such a lazy answer. It does depend, but for each person it is a pretty straightforward financial decision. Do you spend $300 in travel annually? Are you mostly spending on travel and dining? Do you travel quite frequently at an airport where there is a Priority Pass lounge? These all should be pretty easy answers — and those answers should tell you whether or not to get the Chase Sapphire Preffered or Sapphire Reserve. I currently have both, actually, as I was able to secure the sign-up bonuses on both before the rule was changed, but I will definitely continue to spend the annual fee for the Reserve as I find immense value in the card.