Should I Switch All My Spending to the Chase Sapphire Reserve?

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"Reader Questions" are answered twice a week — Tuesdays and Fridays — by TPG Senior Writer Julian Mark Kheel. Note that this is an update of the Monday and Friday schedule we have run until now.

Ever have that feeling that you're using the wrong credit card? That's the feeling TPG reader Forrest has about his current card combo, and he wants to know if it's time to switch things up a bit...

[pullquote source="TPG Reader Forrest"]I generally charge $25,000 a year on the United card to receive the additional 10,000 miles, and $30,000 on SPG Amex to receive Gold status at Marriott/SPG. I believe I would be better off charging everything to Chase Sapphire Reserve but old habits are hard to break. Do you have the data to convince me my hunch is correct?[/pullquote]

Well, Forrest, if you're looking for data on travel rewards, you've come to the right place. Let's take a look at this situation and see if we can determine if it'd be a good idea in this case to switch all spending to the Chase Sapphire Reserve.

First, as we've said many times before, when it comes to travel rewards, it's not just how many points you're earning, but how much those points are worth. So let's start our analysis there by looking at the value of Chase Ultimate Rewards points, United MileagePlus miles and SPG Starpoints, based on TPG's latest monthly valuations.

As we can see, the value of Ultimate Rewards points falls roughly halfway between the two other currencies, which means at first glance, moving all your spending to the CSR would seem to be roughly a wash. But we also need to remember that by spending $25,000 on the United MileagePlus Explorer Card, you get a bonus 10,000 miles, so you're earning more overall points and miles with the two-card combo.

By adding up the actual points and miles earned in this scenario, we come up with this:

The combined values of the United card with the Starwood Preferred Guest® Credit Card from American Express come to $1,300, which is almost $150 better than the Chase Sapphire Reserve. So that means our reader should stay with his current two-card arrangement.

But hang on! We haven't taken into account any category bonuses yet. Since the CSR earns 3x points on all travel and dining expenses, it's likely Forrest will earn more than 1 point per dollar on at least a portion of his spend. Based on the same survey data that TPG Contributor Nick Ewen used in his "One Year of Earning and Burning with Chase Sapphire Reserve" analysis, travel and dining expenditures come to roughly 14% of overall average household spend, so we can recalculate our values again using 14% of the overall $55,000 in annual spend at 3 points per dollar.

Now when we add the two sets of numbers together, the return on the Chase Sapphire Reserve comes to $1,478, easily beating out the $1,300 of the United/SPG combo. So the CSR is the actual winner, right?

Except we're not done, because none of these cards are free. The Chase Sapphire Reserve comes with a significant $450 annual fee, while the United and SPG cards only cost $95 each for a total of $190. However, the CSR fee is partially offset by the $300 annual travel credit that comes with the card, which makes the effective annual fee only $150.

As long as you can fully utilize that credit — and Chase defines travel broadly so there's a lot of opportunities to do so — the net $150 cost of the CSR is $40 better than the combo of the other two at $190 total.

Finally, by putting $30,000 in spend on his SPG Amex card, Forrest is earning Gold status at both Starwood and at Marriott hotels as well, thanks to status matching available from the Marriott/Starwood merger. The combination of those two statuses are worth a whopping $2,670, but that's only if you really use them on a regular basis. If you only stay at a Marriott or SPG properties a few times a year, you won't get anywhere near that amount of value from them. And the Chase Sapphire Reserve comes with its own set of travel benefits — including a Priority Pass membership, up to $100 application fee credit for Global Entry/TSA PreCheck and more — but you don't have to put any additional spending on the card to get those benefits.

Where does all that leave us? It's actually pretty simple. Without the SPG/Marriott status, the CSR beats the other two cards by roughly $220. So if you stay at Starwood or Marriott properties enough times each year to get that much value from elite status at those chains, you should continue putting $30,000 in spend on the SPG Amex card.

However, if you're going to hang onto the Chase Sapphire Reserve for all its benefits and pay its annual fee, you may want to consider shifting the remaining $25,000 in annual spend from the United card to the CSR. Even though you're earning 10,000 extra points on the United card, the Ultimate Rewards points are worth more, enough so that you'll get a slightly better overall return with fewer of them — especially if you focus all your travel and dining spend on the Sapphire Reserve.

As you can see, doing all the calculations can be complicated, but you can certainly do the same math for yourself as we've done here for Forrest. Thanks for the question, and if you're a TPG reader who'd like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.