Is it time to get the Chase Sapphire Reserve?

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Few people are traveling these days.  As a result, credit card companies have had to work harder to convince cardholders that their expensive travel cards are worth keeping.  Amex was first out of the gate with terrific temporary perks for their ultra premium credit cards.  Some of those perks are so good, that it actually makes sense to sign up for those cards now.  This is especially true with Amex Platinum and Hilton cards.  See these posts for details:

Last week, Chase unveiled their answer with temporary new perks for Sapphire Reserve and Sapphire Preferred cardholders.  Like Amex, Chase is offering the best new perks to cardholders of their ultra-premium card: Chase Sapphire Reserve.  Are these perks valuable enough to make it worth picking up a Sapphire Reserve card today?

Sapphire Reserve Enhancements & Benefits

This chart shows a summary of the new perks (and the previously reported grocery bonus earnings):

The most exciting enhancement, in my opinion, is the ability to redeem points for 1.5 cents each against spend at grocery stores, restaurants, and home improvement stores.  For details about this feature, including commentary about why it is so exciting, please see: Chase “Pay Yourself Back”. Awesome new Sapphire feature!

Here’s a summary of what the Chase Sapphire Reserve offers, including both previous and new perks:

  • $550 annual fee
    (Through December, renewals cost $450)
  • $300 annual travel credit
    (Through December, purchases at gas and grocery stores count)
  • Earn 3X for travel and dining, 10X for Lyft, 1X everywhere else
    (Plus, through June, earn 5X at grocery stores)
  • Ultimate Rewards points can be transferred to travel partners or redeemed for 1.5 cents each towards travel booked through Chase
    (Plus, through September, redeem points for 1.5 cents each for charges at grocery stores, restaurants, and home improvement stores with Chase’s Pay Yourself Back feature)
  • Travel benefits: Priority Pass, Global Entry credit, car rental privileges, etc.
  • Travel protections: Primary auto, free roadside assistance 4 times per year, trip insurance, etc.
  • Purchase protection: Extended warranty, damage & theft protection, and return protection.
  • DoorDash: $60 per year in automatic statement credits + DashPass free delivery.
  • Lyft: Earn 10 points per dollar, plus get 1 year of Lyft Pink for free.

Our full guide to the Chase Sapphire Reserve card can be found here.

Which perks are valuable this year?

Assuming you don’t plan to travel much this year, here are the perks that I think offer concrete value under current COVID conditions:

  • Renew for $450 instead of $550.
  • $300 annual travel credit.  Since Chase is offering to rebate spend at gas and grocery stores this year, the travel credit is easier than ever to earn.
  • Earn 3X for dining and, through June, earn 5X at grocery stores.  With points easily redeemed for 1.5 cents each, this is like earning 4.5% back at restaurants (including food delivery) and 7.5% back at grocery stores in June.
  • Through September, redeem points for 1.5 cents each for charges at grocery stores, restaurants, and home improvement stores.
  • DoorDash: $60 per year in automatic statement credits + DashPass free delivery.

Where’s the enhanced value? 1.5 cents cash-out.

Even without considering the new point redemption options, I’d say that Chase has done a reasonably good job of making the Sapphire Reserve almost as valuable now as it is when frequently traveling.

The really big enhancement, though, is for those with lots of Ultimate Rewards points.  Through September, Sapphire Reserve cardholders can redeem those points for 1.5 cents each against grocery, dining, and home improvement store charges.  This is huge because it basically means that we can cash out points for 1.5 cents each.  Previously, if you wanted cash instead of points, you could only get 1 cent per point.

Nick covered in detail why this cash-out option is so compelling, so I won’t repeat the argument here.  Instead, please see his post: Is it now irrational to hold Ultimate Rewards points? (on Nick’s mind).

If you cash out 100,000 points this way, you’ll get $1,500 in statement credits.  That’s $500 more than you would have gotten before this feature was enabled; and $250 more than you would get with a Sapphire Preferred card which offers this same “Pay Yourself Back” feature but at 1.25 cents per point.

The point is this: the more points you have in your household that you’d like to cash out, the more valuable the Sapphire Reserve card is right now.  That value will drop after September unless Chase extends the Pay Yourself Back feature (which they might do).

Should you sign up new now?

There are two groups of people that might find it more appealing than ever before to sign up for the Sapphire Reserve card right now:

  1. Those with lots of Ultimate Rewards points
  2. Those who prefer cash back over points

Let’s look at each, in turn…

Sign up now if you have lots of points?

Here’s the thing: if you have a huge stash of Ultimate Rewards points, you might not be eligible for a new Sapphire Reserve card.  To get this card you must be under 5/24, you must not be a current Sapphire Preferred or Sapphire Reserve cardholder, and at least 48 months must have passed since you last received a new cardmember bonus for the Sapphire Preferred or Sapphire Reserve card.

If you’re not eligible for a new bonus, you may be better off upgrading from a Slate, Freedom, Sapphire, or Sapphire Preferred card.  See the “should you upgrade?” section for details.

Sign up now if you prefer cash back?

With the ability to cash out points at 1.5 cents each, the Sapphire Reserve card’s 50,000 point welcome bonus is like $750 cash (assuming you redeem the points before the end of September).  By signing up new, you would still have to pay the $550 annual fee, but you would easily get back $300 from the travel credit which can be earned with grocery and gas station spend this year.  So, ignoring the card’s other features, the first year net value of the Sapphire Reserve card is around $500 ($750 bonus – $550 annual fee + $300 travel credit).  Maybe the value is a little more if you also value the DoorDash benefits.

But consider that the much cheaper $95 per year Sapphire Preferred card is offering 60,000 points and the ability to redeem points for 1.25 cents each.  Those 60,000 points are worth the same $750!  60,000 x 1.25 cents per point = $750.   Ignoring the card’s other features, the first year net value of the Sapphire Preferred card is $655 ($750 bonus – $95 annual fee).

My point is that if you’re primarily interested in cash back, and you don’t already have a bunch of Ultimate Rewards points that you want to cash out, the Sapphire Preferred welcome offer is a much better deal.

Here are up-to-date details about both offers:

Chase Sapphire Reserve Card
50K points
50K after $4K spend in 3 months

$550 Annual Fee

FM Mini Review: Excellent all-around card for frequent traveler. Best when paired with no-fee Chase Freedom, no-fee Freedom Unlimited & no-fee Chase Ink Cash


Card Type: Visa Infinite

Base
Travel
Dine
Other

Earning rate: 3X Travel and Dining ⚬ 10X Lyft

Noteworthy perks: $300 Annual Travel Credit ⚬ Points worth 1.5 cents each towards travel ⚬ Primary auto rental collision damage waiver ⚬ Priority Pass Select lounge access ⚬ $100 Global Entry fee credit ⚬ $60 annual DoorDash credit in 2020 & 2021 ⚬ Free DashPass for up to 2 years upon activation ⚬ One year Lyft Pink membership ⚬ Earn 10X on Lyft spend

See also: Chase Ultimate Rewards Complete Guide

Chase Sapphire Preferred Card
60K points
60K after $4K spend in the first 3 months

$95 Annual Fee

FM Mini Review: Great signup bonus. This may be the single best "starter card" for those eager to get into miles & points.


Card Type: Visa Signature

Base
Travel
Dine
Other

Earning rate: 2X Travel and Dining ⚬ 5X Lyft

Noteworthy perks: Primary auto rental collision damage waiver ⚬ Free DashPass for up to 2 years upon activation

See also: Chase Ultimate Rewards Complete Guide

Should you upgrade now?

If you have another consumer Chase Ultimate Rewards card (Freedom, Freedom Unlimited, Sapphire, Sapphire Preferred) or Slate card, and you’ve had it for at least a year, you may be able to upgrade to the Sapphire Reserve simply by calling and asking.  You’ll need a credit limit of $10K or more.  If you don’t have a large enough credit limit on the card you want to upgrade from, the agent may be able to move credit from other Chase consumer cards to make the upgrade possible.

You won’t get a bonus for upgrading, but you will get all of these benefits immediately:

  • $300 annual travel credit.  Since Chase is offering to rebate spend at gas and grocery stores this year, the travel credit is easier than ever to earn.
  • Earn 3X for dining and, through June, earn 5X at grocery stores up to $1500 per month.  With points easily redeemed for 1.5 cents each, this is like earning 4.5% back at restaurants (including food delivery) and 7.5% back at grocery stores in June.
  • Through September, redeem points for 1.5 cents each for charges at grocery stores, restaurants, and home improvement stores.
  • DoorDash: $60 per year in automatic statement credits + DashPass free delivery.

I previously thought that you would keep your account anniversary when upgrading, but recent reports suggest that Chase may reset the clock on your account.  This means that upon upgrading you will soon owe the full annual fee.  What’s unclear is whether you’ll be charged $450 or $550 this year.  Reader reports about this have been mixed.  Some have been told $450 and others $550.  We’ll have to wait and see what shows up on people’s actual statements.

Is it worth it?  To make the math easy, lets make the following simplifying assumptions:

  • You are upgrading from a no-fee card to the Sapphire Reserve
  • You will be charged the full $550 rather than $450 (the jury is still out on this one)
  • You value the $300 travel credits at full face value (again, this is to simplify the math)

With the above simplifications, we can calculate that the upgrade will cost you $250 ($550 – $300).  Upgrading to the Sapphire Preferred card, meanwhile, would cost you only the card’s $95 annual fee.  If you don’t consider any of the other Sapphire Reserve perks, then we can say that upgrading to the Sapphire Reserve is worth it if the 1.5 cent cash-out ability of the Sapphire Reserve results in more than $155 extra ($250-$95) over cashing out at 1.25 cents with the Sapphire Preferred.

The break-even point is when you redeem 62,000 points.  Here’s the math:

  • Upgrade to Sapphire Reserve for net $250 cost.  Redeem 62,000 points for $930.  Net result: $930 – $250 = $680.
  • Upgrade to Sapphire Preferred for net $95 cost.  Redeem 62,000 points for $775.  Net result: $775- $95 = $680.

All of the above, gets us to this advice: If you want to cash out more than 62,000 points, then upgrading to the Sapphire Reserve card makes sense.

Conclusion

Chase has made excellent temporary enhancements to the Sapphire Reserve card.  These changes ought to be enough to convince most current cardholders to keep their cards.  Plus, as I’ve argued above, those with lots of points to cash out should consider upgrading to the Sapphire Reserve.

For those thinking of signing up new for the Sapphire Reserve, I’m less bullish, unless you’re one of the rare few who have a lot of Ultimate Rewards points and can qualify now for a new Sapphire Reserve card.  For others, I don’t think it’s a bad time to sign up, but I also don’t see much advantage to doing so now versus waiting until travel resumes.  Many would do better to sign up now for the Sapphire Preferred and, after a year, upgrade to the Sapphire Reserve.

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MalMel
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MalMel

P1 has a Sapphire, P2 has neither Sapphire. If P2 signs up for Preferred, can those points be transferred to P1 for cash out at 1.5?

MalMel
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MalMel

P1 has CSR.

Dario
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Dario

Do you remember if $300 credit is by cardmember year or calendar year? I think that’d be the main reason for me to upgrade freedom unlimited to reserve as wife already has reserve.

tim
Guest
tim

Great article – thanks! I think it’s important to also realize the difference that Reserve offers with Priority Pass restaurants. There are many who may not benefit from this, but our family of three uses Reagan National airport primarily. Every time we depart (and many times when we arrive somewhere else) we get a “free” $84 meal. The only other cards to my knowledge that still offer this are Citi Prestige and US Bank Altitude Reserve

Nun
Guest
Nun

Just a hunch but maybe one factor in the fee and anniversary date is whether you’re converting from a Sapphire (no-fee or preferred) or whether you’re converting from some other product. When downgrading CSR to the no-fee Sapphire I kept my card number for example.

JeffS
Guest
JeffS

Great post, Greg (and Nick yesterday). Something to consider re the grocery bonus and I’d be interested in you take on it. My CSR 90 day history shows restaurant and, since 5/1, grocery purchases, so point values of 3X and 5X respectively. Redeeming at 1.5 cents per point thus gives me a return of 4.5% and 7.5%. However, if Chase ends the CSR 5X grocery bonus on 6/30, I’ll be getting 1X on grocery purchases, so only 1.5% return on grocery purchases until 9/30 (and, for that matter, on home improvement stores now). That’s less than I can get on a Citi Double Cash Card.

John
Guest
John

Just to be clear, I could not transfer all my UR points (600k+) to a new CSR card and cash them out at 1.5, correct?

Miles Ahead
Guest
Miles Ahead

Hi Greg, I know this was discussed on your YouTube session with Nick last Friday, where you speculated about how CHase would handle a product change from CSP to CSR re. the monthly grocery credit double dip. Has there been any confirmation on whether one can max the monthly $1500 3%UR grocery credit on CSP, product change to the CSR and max out a new $1500 grocery credit for 5% in the same month (I do understand that the first $300 would give a full credit and not give 5% UR).

Thanks

Neil
Guest
Neil

Question about this statement: “If you have another consumer Chase Ultimate Rewards card (Freedom, Freedom Unlimited, Sapphire, Sapphire Preferred) or Slate card, and you’ve had it for at least a year, you may be able to upgrade to the Sapphire Reserve simply by calling and asking.”

I had a CSP for 7 or 8 years, in February downgraded to CFU. If I got the CFU via downgrade rather than by a new appication do I still need to hold it for a year before upgrading it to a CSR?

Matt
Guest
Matt

Do You think chase will let me upgrade my new CSP? I got just over a month ago before they started changing all the benefits, and still working on sign up bonus spend

Jacinto
Guest
Jacinto

my 1m URs are in Ink Cards. If I get a new CSR, can I transfer the URs and cash out at 1.5 cents by buying VGCs at grocery store? Good strategy?

Gabe
Guest
Gabe

Any add’l data points on whether an upgrade (from CF) results in a full or prorated annual fee? If prorated, possible to downgrade again at next AF?

Aloha808
Guest
Aloha808

There have been some reports recently of folks being able to move credit over from chase business cards to personal.

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