Last week, news broke about Citi’s upcoming changes to their ultra-premium Prestige credit card: starting next year they’ll add 5X rewards for dining & airfare and limit 4th Night Free to 2 uses per year. In response, and even though I’m excited about these changes, I listed the reasons why I don’t think that the Citi Prestige has toppled the Sapphire Reserve. That post was written with an “average” traveler in mind. I believe that most frequent travelers will continue to do very well with the Sapphire Reserve and its fellow Ultimate Rewards cards. With those cards Chase makes it very easy to earn lots of points and to redeem them for great value.
But, what about a non-average traveler? Some of the techniques involved in earning the most points from Citi go beyond what I think of as “average”. Examples include: regularly seeking retention offers; obtaining an AT&T Access More card through multiple product changes (change first to the AT&T Access card and then to the More); finding manufactured spending options that offer 3X; etc. And the same goes for redeeming points for great value: combining 4th night free with Premier 1.25 redemption; redeeming sweet-spot awards with foreign airline partners; capitalizing on Citi transfer bonuses; etc. All of these things make the Citi ThankYou program extremely valuable for those willing and knowledgeable enough to go the extra mile.
What about me? Given the upcoming Citi Prestige changes, should I keep or ditch my Sapphire Reserve card?
I’ve kept my Prestige card the last few years because it easily pays for itself. Back when Citi Gold checking was for mere mortals (they now seem to require $200K in investments), I apparently locked in a $350 annual fee. After the card’s $250 travel reimbursement, my net cost is only $100. And, since I tend to use the 4th Night Free hotel benefit once or twice every year, keeping the card easily results in a profit.
I also recently signed up for the $95 Premier card when it was offering a 60K bonus (you can find up-to-date bonus info here). The Premier card offers a 20% discount on travel point redemptions (1.25 cents per point value). By pooling my Premier and Prestige accounts, I can now combine the 4th Night Free benefit and the Premier 20% point discount if I’m willing to book my stay online. When booking a 4 night stay, this combination results in a 40% point discount vs. paying 1 point per cent. That’s like getting 1.67 cents per point value (see this post for details or this post if you want to argue about the 1.67 value). Also see: Complete Guide to Citi Prestige 4th Night Free.
Dining 5X: Citi Prestige for the win
Currently I’m using my Amex Gold card to get 4X for dining within the US, and I’ll use the Sapphire Reserve for 3X dining elsewhere. When the Prestige card adds 5X categories in January 2019, I’ll switch to the Prestige card for all dining. The one possible exception is when dining at a hotel restaurant: you never know if it will code as dining or lodging.
Travel 5X or 3X and travel insurance
Travel spend gets more complicated. The Prestige card will offer 5X for airfare and “most travel agencies”. For all other travel expenses, I have multiple options to earn 3X rewards:
- Chase Sapphire Reserve: 3X travel
- Chase Ink Business Preferred: 3X travel
- US Bank Altitude Reserve: 3X travel
- Citi Premier: 3X travel
- CNB Crystal Visa Infinite: 3X travel
I listed the above cards roughly in the order in which I prefer their points: Chase Ultimate Rewards > US Bank points > Thank You points > CNB points.
In general, I want to use the card that offers the best rewards and the best travel protections. Let’s look at various types of travel I tend to spend money on…
Both Citi Prestige and Sapphire Reserve offer very good trip protections (see: Ultra-Premium Credit Card Travel Insurance). The Sapphire Reserve is better for trip cancellation and interruption since it covers you fully even if you only pay for part of the trip with the card. The Sapphire Reserve also has better trip delay protection since Citi doesn’t count delays caused by missed connections. And Chase throws in emergency medical and dental coverage, up to $2,500 per trip.
None of the other cards on my 3X travel list above provide anywhere near the same coverage as the Sapphire Reserve or Citi Prestige.
Both my Altitude Reserve and my CNB card offer primary collision coverage and 3X earnings. If I were to drop the Sapphire Reserve, I’d switch to the Altitude Reserve for car rentals. The Ink Business Preferred also offers primary coverage but only when renting “primarily for business purposes.”
I don’t usually prepay for hotels, so trip cancellation/interruption coverage isn’t much of an issue. If I were to drop the Sapphire Reserve, I’d probably start using my Altitude Reserve at hotels (or maybe the Citi Premier if I needed more ThankYou points).
Uber / Lyft
I already use my Altitude Reserve card for Uber and Lyft rides. The Altitude gives me 3X points and I can instantly redeem previously earned points at 1.5 cents per point value via Real Time Mobile Rewards. I can have my cake and eat it too. That is, I can earn my 3X points and use them too (at 1.5 cents per point value).
I’ll keep my Sapphire Reserve at least until January 2019. At that point, the question will be whether to downgrade it to a no-fee Freedom card before the next annual fee comes due (it would then become my fourth Freedom card!).
Given all of the above considerations, here is the value I’d continue to get from the Sapphire Reserve if I were to keep it:
- Annual $300 travel credits
- Trip protection peace of mind
- Simplicity: One card to use for all travel
- Ability to redeem Ultimate Rewards points for 1.5 cents each towards travel
Is it worth it just for those things? The $300 travel credit offers obvious value. The rest are less obvious. It’s hard to attach a value to the trip protection peace of mind, especially when the alternatives come very close. And while simplicity is great for most people, I don’t much mind picking and choosing different cards for different purposes. And, finally, the ability to redeem points for 1.5 cents each can be extremely valuable. In practice, though, I rarely use it. But, I do like knowing it’s there, just in case. If I did my math right, I’d have to redeem 60K points per year this way to break even:
- Annual Fee: $450
- Travel Credit: -$300
- 60K points redeemed at 1.5 cents value (vs. 1.25): -$150
I thought that writing this post would clarify the decision for me, but it hasn’t. I honestly haven’t yet decided whether to keep or downgrade the card, but I’m leaning towards downgrading it.
What do you think? Should I keep or cancel my Sapphire Reserve?