The Chase Sapphire Reserve has arguably the richest rewards available today. It also has a $450 annual fee. Is it worth the cost? We think so and here’s why.
Less than two years ago, Chase decided to spin-off their Chase Sapphire Preferred card for higher value customers. The new Chase Sapphire Reserve offers a bigger and better everything, designed to attract any excellent credit customer who can rationalize a high annual fee.
How high is the annual fee you ask? Well, the Chase Sapphire Reserve isn’t shy about advertising it–a whopping $450 plus $75 for each additional user. Before you run away, please provide me a few moments to convince you that a $450 isn’t what it seems. Trust me when I say the Chase Sapphire Reserve is worth it.
I’m going to offer four reasons why you should own this credit card, and one why you shouldn’t.
1. Chase Sapphire Reserve Signing Bonus
When you sign up for the Chase Sapphire Reserve, you’ll have the opportunity to earn 50,000 bonus points. To do so, you must spend $4,000 in the first three months of card ownership. If you think $4,000 is simply to much to spend, let me offer you my personal experience.
If I put all of my groceries, car insurance, phone bill(s), gas and cable bill on my credit card each month, it would total just over $1,100 a month. I’ve not included restaurants, or my heating bill, or all the stuff my wife buys using Amazon Prime. I’ve also not included clothing, vacations, office supplies (for my small business) or the other 100 normal everyday purchases you can use this credit card for. Sign up and make a big purchase, or make an effort to use this card often. Either way, you can reach the $4,000 threshold fairly easily.
Now, 50,000 bonus points can be worth $750 in travel when you book through Chase, or $500 in cash. Membership Rewards points are worth 50% more when you use them to book travel through Chase, and this benefit cannot be understated. Owning this card myself, I can attest to the fact that the flights I booked through Chase (on United) were much less expensive using my points than if I booked through a site like Orbitz or Travelocity. A flight that cost me $300 on those sites only cost me 20,000 rewards points.
NOTE–When the Chase Sapphire Reserve launched, it initially offered a 100,000 point bonus. That is when I took advantage of this offer and there is a chance the offer goes back that high in the future.
2. Rewards Program
When looking for a good cash back credit card, rule of thumb is anything greater than 1.5% is a great return. The Chase Sapphire Reserve offers that kind of reward at it’s base level. Membership Rewards points are earned on the following tiers:
- 3x points per dollar spent on travel purchases
- 3x points per dollar spent at restaurants
- 1x points per dollar spent everywhere else
Remember that points are worth 50% more when you use them for travel through Chase. This effectively means that you’re earning a 4.5% cash back rate on travel and restaurant purchases and a 1.5% cash back rate on everything else. If you use your points for something else, the rate of 3% and 1% is still very good, but not AS good.
You might be able to find a credit card that offers 5% cash back on restaurant purchases for a single quarter, but finding one that offers this high a rate all year round isn’t going to happen. The very reason why when making travel arrangements and eating out with my family, I always use this card.
Learn about this card HERE.
3. $300 Annual Travel Credit
A $450 annual fee is a lot to swallow. Most cardmembers would never dare dream to pay that kind of price to own a credit card; especially in a credit card market with plenty of no fee choices. But what if the Chase Sapphire Reserve promised to give you back $300 of it every year? Well, that’s kind of what they do by offering a $300 annual travel credit. If you use this card to pay for an airline ticket, hotel stay, rented car, baggage fee or many other travel related purchases, you’ll receive a statement credit. Every calendar year, $300 will be covered in travel expenses.
It’s important to mention that Chase does not classify merchants. If you make what you think is a travel related purchase, but the charge does not come in related to travel, then there’s nothing Chase can to in terms of a reimbursement.
You may be asking, why doesn’t Chase just make the annual fee $150 if they’re willing to give every cardholder a $300 travel credit? Well, the simple reason is that a lot of cardholders won’t reach the full $300 every year, and some may not even remember of the benefit. Advantage Chase.
4. Elite Sapphire Reserve Perks
In addition to the bonus, rewards program and travel credit, there are also a handful of additional perks which make the Chase Sapphire Reserve a top flight credit card. They include:
- A $100 credit to apply for the TSA Pre Check or Global Entry program.
- Access to over 1,000 airport lounges after enrollment in Priority Pass Select
- No foreign transaction fees
- 1:1 point transfer with most every airline rewards program
- 24/7 customer support to a real live operator
If you’re unfamiliar with TSA Pre Check or Global Entry, this is the program that allows you to skip the lines at the security checkpoint in airports. I rarely travel alone (typically with my family) so this is a benefit I’ve yet to take advantage of, but it’s nice to stare down the people in the Pre Check line.
So there you have four excellent ways in which the Chase Sapphire Reserve deserves a place in your wallet. Why wouldn’t you want to add this card?
For cardmembers that carry a balance month to month, this card is less than ideal. The ongoing purchase and balance transfer APR is 19.24% – 26.24% variable depending on credit history. As noted a few times in this thread the annual fee is $450, and the additional annual fee for extra cardmembers is $75. It’s rare for an issuer to charge a secondary annual fee, but it happens here.
Additional fees to consider:
- Up to $38 late payment fee
- $38 return payment fee
- $5 or 5% of each balance transfer, whichever is greater
- $10 or 5% of each cash advance, whichever is greater
Is the Chase Sapphire Reserve Right for You?
The bottom line here is simple. If you’re a frequent traveler then the Chase Sapphire Reserve is perhaps the best card for your needs on the market today. If you’re not a frequent traveler, then you need to figure out whether or not you’ll use this credit card enough to take advantage of all it has to offer. A $450 annual fee is scary, especially for casual credit card users.
Take solace in the fact that Chase is willing to give you over $1,000 in benefits right away ($750 in travel bonus, $300 in annual travel credit reimbursement), so you’ll still come out way ahead after the first annual fee.
- Learn more about this and other travel rewards credit cards