Should you renew your Chase Sapphire Reserve?
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The Chase Sapphire Reserve is one of the top travel rewards cards. After all, the Chase Sapphire Reserve features substantial earning rates in some spending categories, has solid redemption options and premium perks. But with Chase raising the Sapphire Reserve’s annual fee to $550 and several other cards offering comparable earning rates, you may be wondering whether it’s worth renewing your card when the annual fee comes due.
As is usually the case with premium travel rewards cards, you’ll need to consider your travel priorities and your comfort with paying a pretty substantial annual fee. In short, there’s no one-size-fits-all answer to the question of whether to renew. But as you consider the following questions, you should get a clearer picture of whether or not you’re using the Chase Sapphire Reserve’s benefits enough to warrant keeping your card.
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Is your renewal date before April 1, 2021?
New applicants for the Chase Sapphire Reserve must pay a $550 annual fee. But, some existing cardholders who renew by the end of March 2021 will pay the previous $450 annual fee for one final year. It will be easier to justify the annual fee if your renewal date is before the beginning of April and you’re handed just a $450 bill instead of a $550 bill.
Will you use the $300 annual travel credit?
One of the Chase Sapphire Reserve’s best perks is its $300 annual travel credit. This travel credit is easy to use since Chase broadly defines what counts as a travel purchase. In particular, virtually any expense you’ll encounter when arranging a trip, from parking and tolls to airfare and hotel stays, counts toward this credit. Many commuting expenses also code as travel.
Plus, even if you aren’t traveling yet — gas and grocery purchases also count toward this travel credit through June 30, 2021.
If you spend at least $300 on these types of purchases each year, charging these expenses to the Chase Sapphire Reserve effectively decreases the annual fee to $250 (or $150 if you renew before April 1, 2021). And this lower effective annual fee may feel much more reasonable.
Does your spending justify keeping the Sapphire Reserve?
There are several other top cards for dining and top cards for travel. And while the Chase Sapphire Reserve awards 3x points per dollar spent on travel and dining, some of these cards either offer higher earning rates in these categories or similar earning rates with lower annual fees. Consider how much spending you’ll put on your Chase Sapphire Reserve in 3x categories within the next year. Doing so will allow you to calculate break-even points for your Chase Sapphire Reserve.
Of course, the calculation of break-even points is dependant on the other cards you have in your wallet. And you must consider how you’d redeem your Chase Ultimate Rewards points.
But, there’s more to the Chase Sapphire Reserve than its earning rates. There are other perks and credits to factor in, too!
Are you utilizing the card’s perks?
The $300 annual travel credit is just one of several benefits offered by the Chase Sapphire Reserve. If you’re on the fence about renewing, consider the following perks and decide how much they’re worth to you:
- Global Entry/TSA PreCheck application fee reimbursement: If you pay the application fee for Global Entry or TSA PreCheck with your Sapphire Reserve, you can be reimbursed with a statement credit for up to $100 every four years.
- Priority Pass Select membership: This membership gets you into more than 1,300 airport lounges around the world (including select airport restaurants that accept Priority Pass) for free, with up to two complimentary guests on each visit.
- Lyft Pink: Activate your membership in the Lyft app by March 2022 to enjoy a complimentary year of Lyft Pink.
- DoorDash credit: Automatically earn a statement credit of up to $60 in 2021 on DoorDash purchases.
- Bonus points on Lyft rides: Earn 10 Ultimate Rewards points per dollar spent on Lyft rides through March 2022.
- Primary car rental insurance: When you charge the entire rental to your card, you’ll be covered by primary auto rental coverage that may provide up to $75,000 in reimbursement for theft and collision damage.
- Trip cancellation/interruption insurance: If your trip is canceled or cut short by sickness, severe weather and other covered situations, you can be reimbursed up to $10,000 per person and $20,000 per trip for your prepaid, non-refundable travel expenses.
- Trip delay reimbursement: If your travel on a common carrier is delayed more than six hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket.
- Emergency evacuation and transportation: If you or a member of your immediate family are injured or become sick during a trip far from home that results in an emergency evacuation, you can be covered for medical services and transportation up to $100,000.
- Purchase protection: Covers your new purchases for 120 days against damage or theft up to $10,000 per claim and $50,000 per year.
- Extended warranty protection: Extends the time of the U.S. manufacturer’s warranty by an additional year, on eligible warranties of three years or less.
- Return protection: You can be reimbursed for eligible items that the store won’t take back within 90 days of purchase, up to $500 per item, $1,000 per year.
- Access to Chase’s Luxury Hotel and Resort Collection: Provides elite-like benefits when you book select hotels through the program.
- No foreign transaction fees
- $120 in Peloton class credits through Dec. 31.
This isn’t an exhaustive list of the Chase Sapphire Reserve’s perks, so you may also find other benefits that provide value to your situation.
Do you have Ultimate Reward points left?
If you have a large stash of Chase Ultimate Reward points, you may want to keep your Chase Sapphire Reserve to maintain your current redemption options.
- Redeem your points for travel booked through the Chase Ultimate Rewards travel portal
- Use your points to get a statement credit through Chase’s Pay Yourself Back feature
- Transfer your points to a hotel or airline partner where you know you will use them (such as for a fancy Hyatt hotel stay as shown above)
- Transfer your points to another Ultimate Rewards account for safe storage
However, no other Ultimate Rewards card will make the points worth 1.5 cents each toward travel booked through the Chase travel portal. The best you will get from another card is 1.25 cents each if redeemed in that manner. So, if you like to use your points at a fixed value for travel, they will become less valuable if you don’t have the Sapphire Reserve.
What’s your 5/24 status?
Chase credit cards that earn Ultimate Reward points can be challenging to get because of Chase’s 5/24 rule. Under this rule, Chase will not approve you for a new Chase card subject to 5/24 if you’ve opened five or more personal credit cards across all banks in the last 24 months.
If you plan to cancel your Sapphire Reserve and then apply for the Sapphire Preferred, make sure you:
- Are under 5/24
- Don’t have a Sapphire card (including the no-annual-fee Sapphire)
- Haven’t received a bonus for any Sapphire card in the past 48 months
If you decide keeping your Sapphire Reserve isn’t worth it, consider downgrading your card to another product may be an option. You wouldn’t get the welcome bonus on that card, but you could protect your points. As mentioned, with the Sapphire Preferred you’d maintain the point transferability feature.
Alternatively, a no-annual-fee Ultimate Rewards card such as the Chase Freedom Unlimited or Chase Freedom Flex may be the best solution for your case. These cards typically earn cash-back rewards. But, you can transfer your cash-back rewards to Ultimate Rewards points if you have another Chase Ultimate Rewards card.
There are many factors to consider when deciding whether you want to pay the annual fee to keep your Chase Sapphire Reserve open for another year. If you’ve been able to lean into a variety of perks and credits on the card, the math can easily work in favor of keeping the card even if you aren’t yet back in the sky.
However, some cardholders that aren’t using those perks or simply need to cut as many annual fees as possible may be best served by downgrading or closing the account.
It’s safe to say you can more than make up for the Sapphire Reserve’s annual fee if you spend heavily in the travel and dining categories, use the card’s benefits and make use of the built-in credits — including the $300 annual travel credit. But be sure to weigh your specific situation and preferences when making this decision.
Additional reporting by Summer Hull.
Featured photo by Wyatt Smith/The Points Guy.
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- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $900 toward travel when you redeem through Chase Ultimate Rewards®
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year. Through December 31, 2021, gas station & grocery store purchases will also count towards earning your Travel Credit
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants including eligible delivery services, takeout and dining out & 1 point per $1 spent on all other purchases
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $900 toward travel
- With Pay Yourself Back℠, your points are worth 50% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
- 1:1 point transfer to leading airline and hotel loyalty programs
- Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit for Global Entry or TSA Pre✓®
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more