Getting the Chase Sapphire Reserve or Sapphire Preferred?

Aug 23, 2016

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Update: Some offers mentioned below are no longer available. View the current offers here – Chase Sapphire Reserve

I know this site (and probably many others) are on Chase Sapphire Reserve credit card overload right now, but just hang with me for a bit longer if you are not interested in this card. I keep getting questions about this new card that are easier to answer one time in a blog post rather than multiple times individually, so I have a few more posts to write on this card in the near term, but will mix it up with some other topics, too.

One of the questions I have been asked a number of times already is whether you should get the Chase Sapphire Preferred or Chase Sapphire Reserve, and if you already have the Sapphire Preferred, should you keep it.

Keep the Chase Sapphire Preferred if you get the Sapphire Reserve?

I’ll start with whether you should you keep the Sapphire Preferred if you get the Sapphire Reserve. For clarity, the Sapphire Preferred is the Chase credit card that has been out for several years with the $95 annual fee, 50,000 sign-up bonus points, and it earns 2x Ultimate Reward points on travel and dining, among other things. The Sapphire Reserve is the brand new one with the $450 annual fee, 100,000 sign-up bonus points, $300 annual travel allowance, and it earns 3x on travel and dining.

They both earn Chase Ultimate Rewards that can be transferred 1:1 to Ultimate Reward partners that include: United, Southwest, British Airways, Air France/KLM Flying Blue, Korean Air SkyPass, Singapore Airlines KrisFlyer, Virgin Atlantic Flying Club, Hyatt, Marriott, IHG, and Ritz Carlton Rewards. You can also use the Ultimate Reward points earned by the Sapphire Preferred at a rate of 1.25 cents per point toward travel booked through Chase and the points earned through the Sapphire Reserve (or presumably transferred to that card) at a rate of 1.50 cents per point towards travel booked through Chase.

The Sapphire Reserve also has equal to, or in many cases better built-in travel and purchase protections than the Sapphire Preferred. But, to keep things simple, let’s just look from an annual fee perspective for now.

Assuming you get approved for the Sapphire Reserve, and will use the $300 travel credits each year, you are looking at an out-of-pocket cost of $150 for the Reserve each year factoring in the $300 credit vs. the $95 per year cost for the Sapphire Preferred. That is a $55 per year difference to get the added protections, better point redemption rate, lounge access, and more the Reserve provides over the Sapphire Preferred. My gut says all of that makes the Reserve the no-brainer winner.

But, to look at it another way overly simplistic way, with the 3x vs 2x earning on travel and dining categories on the two cards, if you spend at least $3,666 on travel and dining each year, then that alone should make up the $55 out-of-pocket difference each year on the two cards at 3x on the Reserve over 2x on the Sapphire Preferred, assuming a 1.5 cent value on the points earned by the Reserve. That $3,666 yearly total breaks out to an average of about $305/month on travel and dining, which is a number I think many of us exceed in those two categories combined. Someone feel free to check my math here…

If you value the $300 travel credit same as cash, I think the Sapphire Reserve is the clear winner to get and hold over the Sapphire Preferred for most of us. The is especially true if you put an average of $305 per month in travel or dining expenses on the card, or you value some of the many other perks the Reserve has over the Preferred…including the increased point redemption rate for travel booked via Chase Ultimate Rewards.

I can’t think of any reason to keep both the Sapphire Preferred and the Sapphire Reserve card for the long term as there is no unique benefit the Preferred version brings to the table, other than the 50,000 point sign-up bonus that are still worth getting at some point if you haven’t already. I will add a reminder to combine your Ultimate Reward points from the Sapphire Preferred into the Sapphire Reserve before closing your Sapphire Preferred account if you decide to go that route.

Which should you get first – Chase Sapphire Preferred or Sapphire Reserve?

In terms of which card to get first, I would personally go for the Sapphire Reserve right now because of the massive 100,000 point sign-up bonus. I don’t expect that bonus to drop down overnight, nor do I expect it to last forever. The Sapphire Preferred has a 50,000 point bonus which is great, but I would get the Reserve first since 100,000 > 50,000, plus all the other reasons already stated.

If you want both do keep the Chase 5/24 “rule” in mind as many people report having problems getting approved for one of these Chase cards if they have five or more new credit card accounts opened in the previous 24 months.

Bottom Line: Chase Sapphire Preferred or Chase Sapphire Reserve?

To summarize, I think for travelers who use regularly the card for travel and dining and who will use the $300 annual travel credit towards travel purchases, the Sapphire Reserve makes more sense to hold long term over the Sapphire Preferred. I don’t think there is a reason to keep the Sapphire Preferred if you have the Sapphire Reserve. If you have neither, but want both, I would get the Sapphire Reserve first with the 100,000 points and the Sapphire Preferred later, but keep the “5/24 rule” in mind with timing other card applications. I know that all sounds confusing at first, so please let me know if you have questions!

I’d love to hear if my thoughts on Sapphire Preferred vs Sapphire Reserve are in line with yours and what your Ultimate Rewards strategy is now that this new card is in the line-up.

 

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,650

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
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Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.