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.
It is true that its annual fee of $450 is high. However, when you start adding up the perks that come with this card, you can see that their value can be worth more than the $450 you have to pay every year.
What you need to know
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. 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.
If you start totaling the value of these perks, you can see that they are worth more than the $450 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 $450 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 $150 – which sounds much more reasonable.
And for that $150 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 at least a year or less, since you would pay the $450 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.
However, 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 – unless you have another Chase card that earns Ultimate Rewards points.
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 $450 charge to your account right after you apply.