Chase Sapphire Reserve℠

5 Things Amex and Citi Need to Do in Response to Chase Sapphire Reserve

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Official Chase Sapphire Reserve Application: Link

In case you missed it, Chase announced the Sapphire Reserve card earlier this week. This is the must-have card of 2016, if not the most appealing credit card ever. We’ve run through many of the card’s perks in detail here, but to summarize, there’s a 100,000-point sign-up bonus (after you spend $4,000 in the first three months), a $300 annual travel credit that can be applied to most travel expenses, 3x points on travel and dining and a whole lot more. The card does carry a $450 annual fee, but then again so do the Amex Platinum card and Citi Prestige — two top-of-the-line products that look a whole lot less appealing with the Sapphire Reserve now set to launch next week.

That’s not to say you should overlook these products entirely — Amex’s Centurion Lounges are fantastic and it can definitely be worthwhile to have access, and I still find myself drooling over Citi’s 4th Night Free program, even with the changes coming in 2017 — but there’s no question that both Amex and Citi have their work cut out for them if they want to avoid having premium cardholders cancel their accounts in favor of Chase Sapphire Reserve.

The new Chase Sapphire Reserve Card — one of the strongest value propositions I've ever seen in a credit card.
The new Chase Sapphire Reserve Card — one of the strongest value propositions I’ve ever seen in a credit card.

So what exactly do Amex and Citi need to do? Let’s run through the list…

1. Match Chase’s $300 travel credit — Amex Platinum once led the way when it came to annual fee credits, but the card’s $200 annual airline fee credit hasn’t changed in at least five years. Officially, this credit can be used to cover things like baggage fees, airport lounge memberships, in-flight snacks and similar expenses, though you can (in theory) also redeem it for Amazon gift cards. Since Amex introduced its credit, Citi launched the Prestige card with its much more flexible $250 annual credit that can also be used for airfare. However, Reserve has a $300 annual credit that be applied to nearly all travel purchases, including hotel stays, taxi rides and more. We need that flexibility from Platinum and Prestige.

2. Offer 3x points on travel and dining — A few days ago, a reader wrote in sharing an email he received from American Express, offering 2x points on upcoming purchases with his Platinum card. But that offer was highly targeted, limited to two months and capped at 100,000 points. With the exception of that targeted offer, Amex offers a flat 1x points on purchases in every category (with the exception of 2x points for select travel booked through Amex’s portal) — that’s far behind the times. At least Citi offers 3x points on some categories with the Prestige card, but Chase Sapphire Reserve’s 3x bonus goes far beyond airfare and hotels.

3. Improve transfer partners — As transferrable credit card points programs go, American Express Membership Rewards definitely leads the way when it comes to the number of partners it offers, although the transfer rates haven’t been changing for the better. Citi, for its part, lags behind with its ThankYou Program, though the issuer is making an effort to catch up. Still, there’s no question that Chase’s Ultimate Rewards program offers some of the most lucrative transfer opportunities, letting you send points to programs like United MileagePlus and Hyatt Gold Passport, and with speedy transfers available across the board, it’s a frequent go-to when it comes time to boost an account balance for a specific redemption. It’s one reason we value Ultimate Rewards points at 2.1 cents each, compared to 1.9 cents for Amex and 1.6 for Citi. With stronger transfer partners (such as American Airlines for Citi) and consistent transfer ratios (ahem, Membership Rewards), these programs could be in a much better position to compete.

Chase offers instant 1:1 transfers to United.
Chase offers instant 1:1 transfers to United.

4. Increase the redemption rate for portal bookings — If you read this site frequently, you probably know that you’ll often get the most value from your points by transferring them to an airline or hotel. Still, there are plenty of situations where that may not make sense for you, due to award availability, redemption options and more. With Sapphire Reserve, you’ll be able to redeem your Ultimate Rewards points at a rate of 1.5 cents each for all travel booked through the portal. With Amex, you can expect to get 1 cent per point in value when booking flights, and a bit less with hotels. With Citi Prestige, you can currently get up to 1.6 cents in value (when booking AA revenue flights), but that’s dropping to 1.25 cents in 2017. No question here — Amex and Citi need to match Chase Reserve’s rate of 1.5 cents.

5. Offer primary rental car insurance — Sapphire Reserve includes primary coverage for most rentals when you pay for a car with your card. There isn’t anything else you need to do — just pay with your Reserve card and decline the agency’s Collision Damage Waiver (CDW). Chase even offers this coverage with two $95 cards, including Sapphire Preferred and the United MileagePlus Explorer Card. Meanwhile, with Amex Platinum, you’ll need to pay $19.95 per rental or this coverage, and while Citi recently announced enhanced coverage with Prestige, primary rental car coverage within the US is still not listed as a perk, though it does apply for international rentals.

Bottom Line

So, as you may have gathered, Amex and Citi have some catching up to do. That said, there are some perks that you’ll get with Amex Platinum and Citi Prestige, but not Chase Sapphire Reserve, such as Centurion Lounge access and 4th Night Free, respectively. We’ll be digging into whether or not it makes sense to have more than one of these cards shortly, but for now, I wouldn’t race to close your accounts. And, if the perks make sense for you (and aren’t also offered by Sapphire Reserve), I’d definitely still consider adding one or both of these cards to your wallet.

For more on the Chase Sapphire Reserve card:

What other perks do you think Amex and Citi should add to their premium cards?

Chase Sapphire Reserve℠

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  • New! Earn 100K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,500 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases such as airfare and hotels charged to your card
  • 3X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases. Plus, no foreign transaction fees
  • Get 50% more value when you redeem your points for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 100,000 points are worth $1,500 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 900+ airport lounges worldwide with complimentary Priority Pass™ Select membership
  • Up to $100 application fee credit for Global Entry or TSA Pre√®
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR Regular APR Annual Fee Foreign Transaction Fee Credit Rating
N/A 16.24%-23.24% Variable $450 0% Excellent Credit