One year of earning and burning with Chase Sapphire Reserve
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If you’re new to rewards credit cards, one of the best ways to get started is choosing one of the best travel rewards credit cards. And although it’s possible to maximize your earnings by using different cards for each type of expense, many consumers prefer the simplicity of using one card for all of their purchases.
So, in this post, I’ll consider how easy it is to earn rewards by opening and using a single card for one year. I’ll also discuss what types of rewards one year of spending could provide. In particular, today I’ll consider one of the most popular premium travel rewards cards on the market: the Chase Sapphire Reserve.
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Sign-up bonus and benefits
The Chase Sapphire Reserve is currently offering a limited-time sign-up bonus of 60,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months from account opening. This bonus is worth $1,200 based on TPG’s valuations, thanks to the various ways you can redeem Ultimate Rewards points.
When you use your card, you’ll earn 3x points per dollar spent on travel and dining purchases as well as 10x points per dollar spent on Lyft rides through March 2022. Plus, the Chase Sapphire Reserve carries other benefits, including:
- $300 annual travel credit
- Priority Pass Select membership
- Elite-like hotel perks through Chase’s Luxury Hotel & Resort Collection
- Up to $120 in statement credits on an eligible Peloton Digital or All-Access Membership through Dec. 31, 2021
- Up to $60 in statement credits on DoorDash purchases through 2021 and at least one year of free DashPass when you activate by Dec. 31, 2021
- Up to a $100 application fee credit every four years for Global Entry or TSA Precheck
- One complimentary Lyft Pink membership for 12 consecutive months when you activate by March 31, 2022
The Chase Sapphire Reserve carries a $550 annual fee. But, the annual travel credit is easy to use, so you’re effectively looking at a $250 annual fee before you even consider the card’s other benefits. To learn more, check out the full Chase Sapphire Reserve credit card review.
Earning points in your first year
So if you open the Chase Sapphire Reserve, earn the sign-up bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns. For this analysis, I used consumer-expenditure data from the U.S. Bureau of Labor Statistics for the most recent year available (2019) to estimate what an “average” household would spend (and thus earn) on the Chase Sapphire Reserve in one year.
In doing so, I made the following assumptions:
- Only the “other lodging” category under “shelter” can easily be paid with a credit card (since you’ll usually pay a fee for paying mortgage and rent payments with credit cards), and these transactions earn 3x points as travel purchases.
- The “vehicle purchases” category under “transportation” can’t be paid with a credit card, but all other transportation expenses can.
- 10% of the “public and other transportation” consists of Lyft rides
- 50% of the “healthcare” category consists of premiums and can’t be paid with a credit card.
- All “personal insurance and pensions” expenditures can’t be paid with a credit card.
- All other expenses (including “entertainment” and “education“) can be paid with a credit card.
Your situation may differ substantially, so feel free to adjust these assumptions to calculate your earning potential. Likewise, if you plan to use another card for some expenses, be sure to consider that as well.
Here’s a quick table that shows how these spending patterns in the first year of card membership would translate to Ultimate Rewards points:
|Food at home||$4,643||1 point/$||4,643|
|Food away from home||$3,526||3 points/$||10,578|
|Alcoholic beverages||$579||1 point/$||579|
|Housing (other lodging)||$961||3 points/$||2,883|
|Utilities, fuels and public services||$4,055||1 point/$||4,055|
|Household operations||$1,570||1 point/$||1,570|
|Housekeeping supplies||$766||1 point/$||766|
|Household furnishings and equipment||$2,098||1 point/$||2,098|
|Apparel and services||$1,883||1 point/$||1,883|
|Transportation (gasoline)||$2,094||1 point/$||2,094|
|Other vehicle expenses||$3,474||1 point/$||3,474|
|Public and other transportation||$781||3 points/$ for 90%
10 points/$ for 10%
|All other expenses||$6,630||1 point/$||6,630|
As you can see, the “average” American consumer would earn 106,740 Ultimate Rewards points in his or her first year of using the Chase Sapphire Reserve. Based on TPG’s valuations, these points are worth a massive $2,135.
Redeeming points from your first year
Of course, earning points is one thing, but knowing how to redeem Ultimate Rewards points for maximum value is an entirely different story. Fortunately, the Ultimate Rewards program has many valuable redemptions, most of which involve transferring to the program’s 10 airline and three hotel partners at a 1:1 ratio.
Here’s a sample of what the average consumer could get after their first year of using the Chase Sapphire Reserve.
Up to four round-trip economy tickets to Hawaii
Planning a trip using points and miles to the Aloha State isn’t always easy. However, you have a wealth of options at your disposal through the Ultimate Rewards program.
My personal favorite is for West Coast residents. By transferring points to British Airways Avios, you can take advantage of its distance-based award chart to book tickets from several West Coast gateways to Hawaii for just 26,000 Avios round-trip per person. So you can book four round-trip tickets and still have 2,000 Ultimate Rewards points left over.
Transferring points to Singapore Airlines Krisflyer for economy-class flights to Hawaii on Alaska is also a great option. Flights from most Rocky Mountain states cost 23,000 Krisflyer miles round-trip, while flights from California, Oregon and Washington cost 24,000 miles round-trip (see this pdf for rates). Flights from many central U.S. states cost 25,000 miles round-trip. So, if you depart from one of these regions, you could transfer your Ultimate Rewards points to Singapore Krisflyer and redeem for four round-trip flights.
Finally, you could also transfer to Singapore Krisflyer (35,000 miles) and book United-operated round-trip flights from anywhere in the continental U.S. to Hawaii. But this would only get you three round-trip economy tickets with your haul of Ultimate Rewards points.
Three nights in a top-tier Hyatt property
Another valuable transfer partner through Ultimate Rewards is World of Hyatt. After a year of spending on the Chase Sapphire Reserve, you’ll have enough points for three free nights at Hyatt’s excellent Category 7 properties — or 21 free nights at Hyatt’s impressive Category 1 properties.
Note that World of Hyatt will move to peak, standard and off-peak pricing in July 2021. Once that happens, you’ll still barely be able to get three Category 7 nights during peak times — but you could get up to 30 nights at Category 1 properties during off-peak times. Whether you want to splurge for a couple of nights or stretch your points to the max, you can get a ton of value from the World of Hyatt program.
Two or three nights in New York City plus airfare from multiple U.S. cities
If you’re looking to redeem your points for a trip that includes both flights and hotel, consider a weekend trip to the Big Apple.
One of the most economical options for flights would be for those readers east of the Mississippi and would again use British Airways. If you can find availability on American, you and a friend could fly to New York City and back from cities including Charlotte (CTL) and Detroit (DTW) for just 30,000 BA Avios round-trip. Slightly more distant cities such as Miami (MIA) and Chicago (ORD) would cost 9,000 Avios per person each way, for a total of 36,000 Avios for you and a friend round-trip.
You also could consider transferring to Southwest Rapid Rewards, as the carrier serves both New York-LaGuardia (LGA) and Long Island MacArthur Airport (ISP). Even though Southwest follows a revenue-based redemption scheme, you can still get some great value on Wanna Get Away fares. At a quick glance, I was able to find round-trip, nonstop tickets from Atlanta (ATL) to New York (LGA) for a random weekend in June for just 10,970 points each. Or you could redeem your Ultimate Rewards points through the Chase travel portal to book Southwest flights.
For hotels, you could always look at spending a couple of nights at one of the many World of Hyatt properties in Manhattan. My favorites are the Andaz Fifth Avenue (25,000 Hyatt points per night) and the Andaz Wall Street (20,000 Hyatt points per night), but the Gild Hall (15,000 Hyatt points per night) isn’t a bad choice, either. You also have the option of transferring points to Marriott, which has several Category 4 and Category 5 properties in the city. I’d recommend going the Hyatt route, but it’s always nice to have alternatives.
The Ultimate Rewards program is one of my favorite transferable currencies and regularly clocks in as one of the most valuable currencies on TPG’s monthly valuations. And the Chase Sapphire Reserve is one of the best premium travel rewards credit cards out there.
Keep in mind, too, that the above calculation may even be a bit too conservative because:
- The calculation assumes that you’re the average consumer. If you typically spend more in a year, especially on dining and travel, your earnings will be even higher.
- The calculation assumes that you don’t make any purchases through an online shopping portal. The Ultimate Rewards shopping portal allows you to earn bonus points at many different online retailers, which provides an excellent way to boost your earnings even more.
- The calculation assumes that you only open one card. Other Chase Ultimate Rewards cards, such as the Chase Freedom Unlimited, Chase Freedom Flex and the Ink Business Preferred Credit Card, can be opened and used alongside the Chase Sapphire Reserve for even more earning potential.
I hope this post has illustrated just how rewarding a single card (especially in the first year) can be when it comes to free travel.
Official application link: Chase Sapphire Reserve
Additional reporting by Katie Genter.
Featured image by Isabelle Raphael/The Points Guy.
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