By: Luke Sims
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Around this time last year, one of the most lucrative offers in travel credit card history hit the market – the Chase Sapphire Reserve. If you were one of the lucky people who got in on the original 100,000 Ultimate Rewards sign-up bonus offer than the $450 annual fee was easy to swallow, but now, one year later, that gut-punch annual fee is due again and it’s time to decide if the Chase Sapphire Reserve will retain a spot in your wallet.
As is true with all decisions to keep a credit card beyond year one, there is no right answer for all. Lucky for you, we have an extremely accessible team at 10xTravel and we are more than happy to help each of you personally figure out what the best decision is for you.
That said, I have put together a list of things to consider that will help you decide what to do with your Chase Sapphire Reserve. If you don’t reach perfect clarity about your decision by the end of this, then please reach out and we would love to help!
$300 Annual Travel Credit
The first place we have to start is with the $300 annual travel credit that is automatically applied toward any eligible purchase you make with your Sapphire Reserve.
That means, the first $300 you spend on your Sapphire Reserve on airfare, airline fees, hotels, Airbnb, car rentals, parking, Uber/Lyft/taxis, cruises, tolls, and more (see Chase’s website) will be given back to you in the form of statement credit.
If you spend at least $300 in those eligible purchases in one year, that travel credit is like subtracting $300 from the $450 annual fee, making your net effective annual fee $150.
If you follow 10xTravel and have the Sapphire reserve, there’s a 99.9% chance that you spend that $300 in eligible purchases in one year. So stop viewing the annual fee as $450, it’s really $150 and that’s not all that bad.
*If you applied and were approved before May 21, 2017, you are one of the lucky people who would have actually gotten $600 in travel credit for your first year of card membership. Needless to say, that won’t happen again. Your second year of card membership will start in January 2018, and you will receive $300 in travel credit like all the rest of us sore losers.
Lounge Access and Other Perks
Along with the many fantastic perks of the Chase Sapphire Reserve (we’ll go over a few others below), comes access to Priority Pass Select airport lounges. In my opinion, this perk is second only to the $300 annual travel credit, and has a value potential higher than any of the other perks.
Priority Pass has a network of over 1,000 lounges in over 120 countries, making it a valuable companion to any frequent traveler. Maybe even more important, there is no stated limit on the number of guests you can bring in with you (great for people who travel with friends and family a lot).
This type of Priority Pass membership would cost $399 if you wanted to buy it. Now that doesn’t automatically give it the value of $399 for everyone, you have to evaluate your own use of this perk in order to determine the value. If you use airport lounges often, like to bring friends or family into lounges, or you think you might start trying lounges (check this out) than this is a valuable benefit that might make keeping the Sapphire Reserve worth it.
Global Entry/TSA PreCheck
If you don’t already have Global Entry or TSA PreCheck, you can use your Sapphire Reserve when you apply for either and you will receive a $100 statement credit to cover the fee. If you have already used this benefit, the marginal value for the next year is zero. But, if you are planning to apply for either Global Entry or TSA PreCheck, than that is at least $100 in value (depending on how much you value the stress relief/time saving aspect of it).
Travel Insurance
Many travel credit cards offer travel insurance. The key is that you have to use that certain credit card to book the travel in order to receive the credit card insurance, and there is no better card on the market than earning 3x points for travel.
Earning and Using Ultimate Rewards Points
Chase Ultimate Rewards points are some of the most useful and valuable points in all of award travel (learn everything you need to know about them here). In order to decide if you should keep the Sapphire Reserve for year 2 and beyond, it’s important to understand your points earning potential and the value you can get with those points.
The Sapphire Reserve awards 3x Ultimate Rewards points on travel and restaurants, and if you’re anything like me than that’s where a big chunk of your paycheck goes. Having these two categories at 3x kickback is a great way to rack up those valuable points. You should check out your “My Rewards Dashboard” to see your year-to-date point earnings.
The value of your Ultimate Rewards points is at least 1.5 cents each, which is what you get when using the Ultimate Rewards travel portal for airfare, hotels, car rentals, cruises, and more. If you transfer Ultimate Rewards points to airline or hotel partners, you could easily get a value of 3 or 4 cents (or more) per point. Just as important, Chase has 11 travel partners that you can transfer points to at a 1:1 ratio, making it easier to find great value with your points.
Bottom Line
Deciding if the $450 annual fee is worth it for another year of the Chase Sapphire Reserve is different for everyone.
If you maximize the $300 annual travel credit (most 10xT readers do), than the annual fee is really $150. If you use the other benefits, they could easily add up to huge value. For most people, it would make sense to keep your Sapphire Reserve for year two and beyond.
Please reach out to the 10xTravel staff if you need additional help making your decision!
Wheels Up,
Luke
