Despite an increased annual fee, the Chase Sapphire Reserve still outpaces the Chase Sapphire Preferred Card.
This week Chase made a major announcement: The Chase Sapphire Reserve® has upped its annual fee to a steep $550 and added several new perks. Most notably, the card has new partnerships with food-delivery service DoorDash and rideshare service Lyft that offer compelling memberships to frequent travelers and diners.
Chase Sapphire Preferred vs. Chase Sapphire Reserve
Chase Sapphire Preferred Card
Chase Sapphire Reserve
|Sign-up bonus||60,000 points if you spend $4,000 in first 3 months||50,000 points if you spend $4,000 in first 3 months|
|More things to know|
Why the Chase Sapphire Reserve card has the advantage
The first thing you may notice when you compare the Sapphire Preferred and Reserve cards is that on the Chase Sapphire Reserve, the bonus is smaller (only 50,000 points for spending $4,000 in the first three months) and the $550 annual fee is significantly higher than the Preferred card’s $95 annual fee. However, the Reserve card has a few features that give it an edge over the Preferred card (even for moderate spenders):
- A higher earning rate on dining and travel purchases (3X points)
- A $300 travel credit that applies to most travel purchases, canceling out more than half of the card’s $550 annual fee
- A 50 percent bonus on travel redemptions through the Chase Ultimate Rewards portal (the Preferred card has only a 25 percent redemption bonus), boosting the value of the card’s points to 1.5 cents per point
- Priority Pass lounge access
- Up to $100 credit toward your Global Entry or TSA Precheck application
- Up to $120 in DoorDash credits ($60 in 2020 and $60 in 2021)
All these features add up to a lot of value that can easily make up for the card’s larger annual fee.
How to decide which card is best for you
Since the main difference between the Sapphire Preferred and Reserve cards is the amount of rewards they offer on dining and travel, the decision between the two cards mostly comes down to how much you spend on these two categories. In comparing the value of the cards, you should estimate the amount you spend on dining and travel each year, multiply it by the number of points you can earn, factor in the redemption bonus and subtract out each card’s annual fee. Basically, try the following calculation:
Yearly dining and travel spend x earning rate x redemption bonus – annual fee
For the Reserve card, you should also factor the $60 DoorDash and $300 travel credit into the value (and note that any travel purchases covered by the $300 credit earn only 1X points).
To make the Reserve a better value, we estimate that the threshold on dining and travel expenses is $5,425. At this level, the rewards that you earn on dining and travel with both of these cards – factoring in the travel credit and annual fees – are exactly the same.
Comparing the value of $5,425 yearly dining and travel spend
|Chase Sapphire Reserve card||Chase Sapphire Preferred card|
|$5,125 travel and dining spend (excludes purchases covered by $300 travel credit) x 3 points per dollar = 15,375 points|
|$5,425 travel and dining spend x 2 points per dollar = 10,850 points|
|15,375 points x 1.5 cents point value = $231 (when redeemed for travel through Ultimate Rewards)||10,850 points x 1.25 cent point value = $136 (when redeemed for travel through Ultimate Rewards)|
|$231 + $300 travel credit + $60 DoorDash credit – $550 annual fee = $41||$136 – $95 annual fee = $41|
Beyond this threshold, however, the Reserve ekes more rewards out of travel and dining spend each year. In other words, if you spend more than $5,425 on dining on travel annually, the Sapphire Reserve card is the best bet for you, because you’ll get more value out of it.
The fact that the Reserve card also comes with premium travel benefits – including complimentary Priority Pass access and a $100 credit toward Global Entry or TSA Precheck – is just cream on top of the card’s rewards.
The 60,000-point offer on the Sapphire Preferred card is a tempting one, but you should take a moment to compare cards before you apply, because Chase only gives you one shot at opening up a Sapphire card. Chase does not allow you to own a Reserve and Preferred card at the same time, and, once you are a Preferred card member, you may have to wait a year or longer before Chase will allow you to upgrade to its Reserve card. To spare yourself some buyer’s remorse, be sure to do the math ahead of time to see which card will take you further in your travels.