While the annual fee is high, if you travel often (or spend money on purchases classified as travel), the Chase Sapphire Reserve card is worth it. But be sure to utilize the perks provided; otherwise, the cost will outweigh the benefits.
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Dear Cashing In,
I have been looking into getting the Chase Sapphire Reserve credit card. I like some of its features, but its annual fee looks pretty steep. Is it worth it? – Emily
When it first came out in 2016, the Chase Sapphire Reserve card was so popular that the company famously ran out of metal to make them. Part of the reason why it was so popular was that it debuted with a sign-up bonus of 100,000 Chase Ultimate Rewards points.
Since then, a lot of the hype has died down, and Chase has lowered that sign-up bonus. But the Reserve is still a card worth examining.
In January 2020, Chase hiked the annual fee on the card for new applicants to $550. For existing cardholders, that change starts in April 2020. When the card debuted, its annual fee was $450.
It’s true that annual fee is quite steep. However, the value becomes apparent when you start to add up the perks.
Benefits, both old and new
If you travel even occasionally, this card can make some sense. Here’s why:
- $300 annual travel credit. When you use the card for travel purchases, you receive a travel credit up to $300 every year.
- 50,000-point sign-up bonus. You receive the Ultimate Rewards points after spending $4,000 in the first three months. You can transfer these points to many airlines and hotels – including United, Southwest or Marriott – or use them to book travel on Chase’s travel portal.
- Up to $100 credit for TSA Precheck or Global Entry every four years. This can help you get through customs and security at the airport more quickly.
- Airport lounge access. The card comes with Priority Pass, which can get you into more than 1,000 airport lounges in 500 cities at no additional charge.
- Triple points on travel and restaurant purchases. You earn three points per dollar in these categories – which is high when compared to other cards. You’ll begin earning 3x on travel after earning the $300 credit annually.
In addition, starting in 2020, the Chase Sapphire Reserve added the following perks:
- 10 points per dollar on Lyft purchases through March 2022.
- A free year of Lyft Pink (valued at $19.99 a month) which gets you a 15% discount on Lyft rides and scooters.
- Up to $120 in DoorDash credits (up to $60 in 2020 and up to $60 in 2021).
- Free DashPass membership (valued at $9.99/month) which gives you no service charges on DoorDash deliveries over $12.
If you start totaling the value of these perks, you can see that they can be worth more than the $550 annual fee. The main question to consider is: Do you travel enough that these perks would be valuable to you?
Most valuable perk
One of the most valuable perks of the card is the travel credit. You can think of it like this: You are paying a $550 annual fee for $300 in travel credits. Assuming you spend $300 a year on hotels, flights, parking garages, toll roads, ride-hailing services and the like, that effectively knocks down the annual fee to $250.
While that’s still a little pricey, for that $250 annual fee, you also receive 50,000 Chase Ultimate Rewards points. When redeemed on Chase’s travel portal, those points are worth $750 in travel.
Worth it – if you travel
You would definitely come out ahead if you had the card for a year or less since you would pay the $550 annual fee only once but would receive $300 in credits, plus $750 worth of Ultimate Rewards points.
The value diminishes after a year since you would continue to pay the annual fee but wouldn’t receive the sign-up bonus. But some people still hang on to the card because the dining and travel category bonus is so high, and cardholders continue to receive the $300 annual travel credit.
In addition, some people might wring value from the minor perks Chase added to the card in 2020. Not everybody uses Lyft or DoorDash so those seem like perks added to attract younger cardholders.
It is important to note that if you receive the card only to cancel it before your second annual fee is due, you will lose any remaining Chase points in your account.
In the end, Chase Sapphire Reserve is a card that will appeal to a lot of people – despite its high annual fee. It might make sense for you if you spend $300 a year in travel and are able to use the $750 worth of points – and if you can absorb a $550 charge to your account right after you apply.
If you find a $550 a year card just too hard to swallow, you might consider other options. Until the Chase Sapphire Reserve came along, the Chase Sapphire Preferred Card was considered a valuable option. It sometimes gets passed over amid the hoopla of its pricier cousin, but it is still a solid card – and at $95 a year, a lot cheaper.
It earns double Chase points on travel and dining, and it comes with a 60,000-point sign-up bonus (after spending $4,000 on purchases in the first 3 months) which is worth the same as the Chase Sapphire Reserve’s sign-up bonus (because of how Chase values the points when you have different cards).
While there is no travel credit and the Lyft and DoorDash perks are not as significant, the Chase Sapphire Preferred is worth considering if those benefits aren’t important to you. Other travel cards with similar annual fees, such as Capital One Venture Rewards Credit Card or the Citi Premier® Card, are also good options.