Chase confirmed rumors earlier this month that there were going to be significant changes to the “King” of US travel credit cards, the Chase Sapphire Reserve card. These changes include the following:
- An increase in the annual fee from $450 to $550
- The addition of a $60 DoorDash credit in 2020 and 2021, plus a DashPass membership (free delivery and reduced service fees on select restaurants)
- The addition of the ability to earn 10x points on all Lyft spend through March 2022, plus a Lyft Pink Membership (valid for 1 year, primary benefit of 15% off all rides)
Update: Video to accompany this post below.
The initial reaction is always negative to changes like this. I saw a lot of comments around the internet that they’re switching back to the Amex Platinum card. Before you do that, I recommend you check out my last post where I did a detailed comparison between the two cards to see which is actually better for you.
The Sapphire Reserve was largely considered to be one of the most valuable cards for the many benefits it provides. Included in those benefits are an easy-to-use $300 travel credit, Priority Pass Select Lounge access (including restaurant credits), 3x points on Travel/Dining purchases, Primary rental car insurance coverage, and a slew of other travel/purchase protections.
Those that travel regularly, which should be the only people getting this type of card, point out that the $300 travel credit is “money that would have been spent on travel anyway” and so the annual fee could have been thought of as being $450 – $300 = $150. All those other benefits I mentioned (plus several others), then, were for an adjusted cost of $150. Compared to the Sapphire Preferred fee of $95, the $55 is a massive deal for someone that books flights/travel, wants to use lounges, and/or gets rental cars even a couple of times per year.
The $100 increase in the annual fee changes that calculation, and for many people, significantly so. While new benefits were added, they are not ones that can be considered “money that would have been spent anyway” like the travel credit is. They are simply not as universal of expenditures. So doing the math on whether the extra $100 is worth its isn’t as simple.
For the last several years, whenever someone asked me for my opinion of the best credit card to get, my go-to response was the Chase Sapphire Reserve. Sure, a complicated discussion and question process could reveal a more valuable card for someones specific spending/travel preferences, but you would have been hard pressed to find a traveler that would go wrong by getting the CSR.
Unfortunately it is not as simple anymore, and in fact it’s complicated enough that I decided to write this post. Whether you’re getting one of these cards for the first time or are deciding on which one to keep going forward, here are the factors to consider:
Sign Up Bonus
If you don’t have either card or haven’t signed up for either in the last 48 months, this section will matter. The sign up bonus for the Chase Sapphire Preferred card is, as of the date this article was posted, 60,000 after $4k spend in 3 months. The Sapphire Reserve offers 50,000 points after the same spending. So right off the bat, the extra 10k points is better.
There is an argument for the value of those points. The CSR has a built-in minimum value of 1.5 cents per point if you redeem through Chase’s Ultimate Rewards portal. The Sapphire Preferred has a built-in minimum value of 1.25 cents per point. If you look at the value from the perspective of Ultimate Rewards portal redemptions, then each sign-up bonus is worth $750.
But most of us know that you generally get better value by transferring those points to a travel partner like United, Virgin Atlantic, Singapore Airlines, Hyatt, or the several other partners Chase has. I use my points almost exclusively for this purpose, only booking through the Ultimate Rewards portal about once a year for specific purposes like mistake fares or the rare occasion where 1.5 cents yields better value than transferring would (often extremely cheap economy fares).
Because I consider the transferable nature of the points to be their main source of value, I simply give the edge to the card that gives more points. Currently, that’s the Chase Sapphire Preferred. You can always product change to the Sapphire Reserve down the road.
The Benefits
If you’re deciding on whether to keep the CSR or downgrade, this section matters most. I’ve tried to simplify this as much as possible to avoid getting into details that aren’t as significant, while also covering the ones that are.
The benefits that the two cards offer are extremely similar, with one major caveat. Here are the significant benefits that are the same between the Sapphire Preferred and Sapphire Reserve:
- Primary Car Rental Coverage
- Travel / Delay Coverage (see note below)
- Purchase Protections / Extended Warranty
- No foreign transaction fees
The major benefits that are different are:
- No Lounge access with CSP
- Trip Delay coverage kicks in at 12 hours with CSP vs 6 hours with CSR
- Earn 2x travel/dining with CSP instead of 3x with CSR
- CSP does not offer the credit for DoorDash or most Lyft benefits of the CSR
This is really where each person decides which card is more valuable to them. You still get Primary rental car coverage, which is huge in my book. Almost all of the travel/purchase protections are the same on both cards, with the exception of the 6 hours vs 12 hour delay requirement.
I don’t see the points earning as a problem. I earn 4x on dining on the Amex Gold card so that’s where all that spend goes, anyway (a card I recommend for most people btw). Airfare and car rentals will always be booked on my Sapphire because of the coverage described above, so that’s where the 2x vs 3x comes into play. Personally, much of my airfare/hotel spend is with points anyway (and I hope yours is as well if you’re reading this blog and others like it), so award travel taxes/fees are the main source of that expenditure. It won’t be a ton of spend unless you either have a ton of points or are fortunate enough to travel extremely frequently (a beginner generally fits neither).
The Lounge access is by far the most significant loss, as no lounge access is included with the Sapphire Preferred. I generally use my points/miles for international Business Class flights, where lounge access is almost always included. If you will be traveling like this, it’s not a big loss in my opinion.
If you travel in economy or just enjoy lounge-hopping, I can offer a frugal alternative: the Amex Hilton Surpass card offers 10 Priority Pass Lounge entries per year for its annual fee of $95/year. That might do the trick if you’re keeping an eye on how much you spend on annual fees and only take two or three trips per year.
Breaking It Down
Here’s how I break down the differences to come to my conclusion:
Chase Sapphire Reserve: $550 annual fee minus $300 travel credit (“money you would have spent anyway”) = $250 adjusted annual fee. For $250 you’ll get the lounge access, $60 in DoorDash credit, Lyft discounts, and Trip Delay coverage starts at 6 hours instead of 12 hours.
Chase Sapphire Preferred: $95 annual fee gets you similar coverage but no lounge access or credits/discounts.
The effective difference in the annual fee is the $250 for the CSR minus the $95 for the CSP = $155. What this comes down to, in my opinion, is simply do you value the below items at $155 or more:
- Lounge Access (including restaurants)
- $60 DoorDash credit + other benefits
- Lyft benefits
- 6 hour trip delay coverage vs 12 hours with Sapphire Preferred
- The ability to use the Ultimate Rewards portal for 1.5 cents per point vs 1.25 with Sapphire Preferred
- 3x points on travel vs 2x with Sapphire Preferred
I know people that use DoorDash regularly, so the $60 credit is as good as the travel credit to them. The $155 reduces further to $95 if you’re one of those people. I know people that easily spend $500 on ride sharing apps each year, and with the 15% discount that’s an additional discount of $75, reducing the effective annual fee for the CSR to just $20. That becomes a no-brainer for lounge access and the other items.
If you never use DoorDash or ridesharing apps, you’ll need to do some additional thinking or calculations.
Summary
Deciding between the Chase Sapphire Reserve and Preferred cards is more complicated than it used to be. In my opinion, it simply breaks down to whether you think the added Lounge Access, $60 DoorDash credits, Lyft benefits, and 6 hour trip delay coverage that the CSR offers is worth $155. If it is, that’s the card for you. If not, maybe the Sapphire Preferred is more appropriate.
For beginners, I think the CSP might be a better option since it comes with 60k points right now vs just 50k with the CSR.
For those that have been doing this for a while, we’re coming up on 48 months with the Chase Sapphire Reserve card in late 2020. While that’s a long time from now, here’s what my plan is as of today: I plan on using as many of the new CSR benefits as I can before it renews at $550 towards the end of this year. Once I know I’m clear of the 48 month hurdle, I’ll apply for the CSP to get the 60k point bonus (assuming it’s still around). Then at some point in the future, I’ll product change back to the CSR.
What is your plan given these changes to the Chase Sapphire Reserve card?
IMPORTANT: I DO NOT sell credit cards as an affiliate marketer! That means you can trust everything I say because I’m not getting paid by the banks I discuss. Ask other reviewers if they have the same policy! (hint: most don’t)