What to Do with Your Chase Sapphire Reserve Credit Card
If you’re a savvy credit card customer, you snapped up the best credit card of 2016, the Chase Sapphire Reserve. Sure, it had a hefty $450 annual membership fee, but with rewards including a $300 credit for travel spending, 3x bonus on travel and dining, Priority Pass airport lounge membership, free Global Entry/TSA Pre application and 1.5x point value on Chase’s Ultimate Rewards travel booking site — not to mention a 100,000 signup bonus — it paid for itself in no time. But as year one comes to a close, many cardholders are wondering: should I renew my membership and shell out another $450?
I have a Chase Sapphire Reserve, and I assessed its value to me. Conclusion: I am keeping my membership another year and paying the $450 fee. Here’s why:
The value of a second year of membership boils down to two benefits:
- getting access to the 1.5x points on Ultimate Rewards
2. Priority Pass membership
Note that if you downgrade from Sapphire Reserve, you lose the Ultimate Rewards 1.5x bonus. Thus if you still have a lot of points, the value of staying Sapphire Reserve is even greater.
(There’s also no foreign transaction fees for Sapphire Reserve, but many other cards have this perk.)
The effective cost of the card is $150 ($450 membership fee minus $300 credit on travel spending.) I’ve called Sapphire Reserve customer service to negotiate a lower membership fee. Unfortunately, the agent I spoke with was unwilling to make a deal.
Comparison with Costco Visa
If I canceled Chase Sapphire, I would move my spending to another card I own, the Citi Costco Visa. Like Sapphire Reserve, Citi Costco has a 3x point bonus for dining and travel spending. But Citi Costco has no membership fee. (Note: I limit my spending on Chase Sapphire Reserve to dining and travel. For all other spending I use the Citi Double Cash, which has a 2% bonus for all purchases.)
I created a spreadsheet comparing Sapphire Reserve’s benefits over Citi Costco’s. Result: If I spend the same amount next year as this year, I will get $203 in extra value on Ultimate Rewards. This exceeds the card’s effective fee of $150. Staying a member is a no-brainer.
What if my spending changes next year? If I spend more, Chase’s advantage grows. Now suppose I spend less — 1/3 less. I will get $135 in extra value on Ultimate Rewards, which is less than the card’s $150 effective fee. But there’s the Priority Pass. Its membership fees start at $99. Although I use Priority Pass just a few times a year, I value the annual benefit more than $15. Thus it still makes sense for me to stay a member.
Comparison with other cards
If there were another card that offered similar benefits to Sapphire Reserve AND had a signup bonus, the equation would change dramatically. It would make sense to drop Sapphire and get that card. However, at this time there aren’t any good signup deals. The best I found is United MileagePlus Explorer: up to 50K miles for a $95 annual fee. For the upcoming year, I’m planning to use the Priority Pass benefit several times so I’m hesitant to cancel Sapphire Reserve. However it makes sense to sign up for United MileagePlus Explorer on its own to get the bonus. Earlier this year, the sign up bonus was 60K and for some customers even 70K! If this happens again I will pull the trigger.
Bottom line
I’m paying for a second year of Chase Sapphire Reserve because I benefit from its 3x travel and dining rewards, the 1.5x Ultimate Rewards travel booking bonus and Priority Pass airport lounge access. And if you don’t believe me, listen to The Points Guy.
