Should You Renew Your Chase Sapphire Reserve?
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Were you one of the thousands of people that rushed to sign up for the Chase Sapphire Reserve when it was released last summer? If so, you were likely drawn to the whopping 100,000-point sign-up bonus as well as other outstanding perks that other issuers have since scrambled to match. Now, however, you have a decision to make. The one-year anniversary of the card is upon us, and you have to decide whether it's worth paying the $450 annual fee for another year.
As is usually the case when it comes to credit cards, the decision depends on your award travel priorities, as well as your comfort with paying a substantial fee for the privilege of using a feature-packed credit card. So, it goes without saying that there's no one-size-fits-all answer to the question of whether or not you should renew. But by asking yourself the following questions, you can get a clearer picture of whether or not you're utilizing the card's benefits enough to warrant keeping it open.
Do you spend at least $300 per year on travel?
One of the Sapphire Reserve's best perks is a $300 annual travel credit that will automatically be applied toward any eligible purchase you make with the card. Not only is this one of the most generous annual credits among premium rewards cards based on actual dollar amount — the Ritz-Carlton Rewards Credit Card is the only one to equal it — but it also has some of the most lenient definitions of what counts as a travel purchase. This credit is good toward virtually any expense you'll encounter when arranging a trip, from parking and tolls to airfare and hotel stays.
If you'd spend at least $300 on these types of purchases regardless of whether you have the CSR, charging these expenses to this card effectively lowers the annual fee to $150. That's still on the high end for a credit card, but it's certainly much easier to swallow.
Do you spend enough to hit the break-even point?
Back when the card launched in late-ish 2016, our Senior Points & Miles Contributor Nick Ewen ran the numbers to find a break-even point for when it makes sense to pay the $450 fee for the Sapphire Reserve. To summarize his findings, if you spend at least $2,500 a year on travel and dining (the categories eligible for 3x Ultimate Rewards points on the CSR), it's worth paying the $450 rather than going for the Chase Sapphire Preferred Card, with an annual fee of $95 that's waived for the first 12 months. That breaks down to only about $208 per month.
Note that this calculation is based on TPG's valuations, which currently peg Chase Ultimate Rewards points at 2.2 cents apiece. But it's also important to keep in mind that the CSR is the only Chase card that offers 1.5 cents per point when redeeming directly for travel through the Ultimate Rewards travel portal, so you'll get the best value with the Sapphire Reserve if you tend to redeem your points that way.
Nick also looked at how much you'd need to spend to make it worth paying the Sapphire Reserve's annual fee, without comparing it to the cheaper Sapphire Preferred Card. If you spend at least $2,273 a year on travel and dining — just $189 per month — worth getting the Chase Sapphire Reserve, and if you spend about $6,818 on non-travel, non-dining purchases ($568 per month), you'll make up for the card's annual fee.
Are you utilizing the card's other perks?
The $300 annual travel credit is just one of several valuable benefits offered by the Sapphire Reserve. If you're on the fence about renewing it, take inventory of the following perks and decide how much they're worth to you:
- Global Entry/TSA PreCheck Application Fee Reimbursement — Once every four years, if you pay the application fee for Global Entry or TSA PreCheck with the Sapphire Reserve, you'll be reimbursed with a statement credit. Global Entry costs $100 for a membership that lasts five years and it includes enrollment in TSA PreCheck for expedited airport security access, so by using this benefit you're effectively getting $100 in value.
- Priority Pass Select Membership — This gets you into more than 1,000 airport lounges around the world for free, and this membership includes guests as well.
- Primary Car Rental Insurance — Hopefully you'll never have to use this perk, but the CSR does include primary auto rental coverage, entitling you to up to $75,000 in reimbursement for theft and collision damage if you charge the entire rental to your card.
- No foreign transaction fees — You can travel abroad without having to worry about looking at your statement and discovering you'd been charged transaction fees for your credit card purchases while out of the country.
This isn't an exhaustive list of the card's perks — for more info on benefits, see this FAQ post.
There are many factors to consider when it comes to deciding whether you want to pay $450 to keep the Chase Sapphire Reserve Card open for another year. Hopefully this post has helped you clarify where you stand by examining the top ways the card offers value. It's safe to say you can more than make up for the high annual fee if you spend heavily in the travel and dining categories and can maximize the $300 annual travel credit, among other benefits. However, be sure to weigh your own situation and preferences above all when it comes to making this decision.
Will you be renewing the CSR when your annual fee comes up?