Should you renew your Chase Sapphire Reserve?

Jan 17, 2020

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The Chase Sapphire Reserve is the go-to card for many travelers because of its solid earning, redemptions and benefits. But with premium American Express cards now offering select travel protections and Chase raising the Sapphire Reserve’s annual fee to $550, you may be wondering whether it’s worth renewing the card when the annual fee comes due.

As is usually the case with 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 to renew. But ask yourself the following questions and you can get a clearer picture of whether or not you’re using the card’s benefits enough to warrant keeping it open.

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In This Post

Is your renewal date before April 1, 2020?

Although new applicants for the Chase Sapphire Reserve will need to immediately pay the higher $550 annual fee, existing cardholders who renew before April 1, 2020 will do so at the previous fee for one more year. It might be easier to justify the annual fee if your renewal date is before the beginning of April.

Related reading: Significant changes confirmed for Chase’s Sapphire Reserve card

Do you spend at least $300 a year on travel?

One of the Chase Sapphire Reserve‘s best perks is a $300 annual travel credit that is automatically 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 but it also comes with 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. Many commuting expenses also count as travel.

If you’d spend at least $300 on these types of purchases whether or not you have the Sapphire Reserve, charging these expenses to this card effectively decreases the annual fee to $250 (or $150 if you renew before April 1, 2020) — which may feel much more reasonable.

Related reading: The best travel credit cards

Do you spend enough to hit the break-even point?

(Photo by Eric Helgas for The Points Guy)
Would you be better off with the Chase Sapphire Preferred Card ? (Photo by Eric Helgas/The Points Guy)

I recently calculated the break-even point when it makes sense to pay the new $550 annual fee for the Chase Sapphire Reserve instead of the lesser $95 annual fee for the Chase Sapphire Preferred Card. The math was solely based on spending and how you plan to redeem your points.

I found that if you plan to redeem your points for travel booked through the Chase Ultimate Rewards travel portal, you’ll be better off with the Chase Sapphire Reserve if you spend more than $8,425 per year on travel and dining. That breaks down to about $703 per month.

If you plan to redeem your points by transferring them to hotel and airline travel partners, you’ll be better off with the Chase Sapphire Reserve if you spend more than $8,650 per year on travel and dining. That’s just $721 per month.

Related reading: By the numbers: When does it make sense to get the Sapphire Preferred vs. the Sapphire Reserve

However, if you have the Sapphire Reserve but aren’t looking to replace it with a Sapphire Preferred, the true question is how much you’d need to spend on travel and dining to justify keeping the Sapphire Reserve. This is difficult to answer without knowing the specifics of your individual situation because it is dependent on what card you’d use instead for these expenses as well as how much you value the Sapphire Reserve’s other perks.

Related reading: Reasons Chase Sapphire Preferred should be your first card

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 restaurants) 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 statement credits of up to $60 in 2020 and $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, including passenger fares, tours and hotels.
  • 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 period 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 through the program.
  • No foreign transaction fees

This isn’t an exhaustive list of the card’s perks, so you may also find other benefits that provide value to you.

Related reading: Chase Sapphire Reserve credit card review

Do you have Ultimate Reward points left?

Woman in cafe shopping online with laptop. Photo by filadendron/Getty Images
Treat with care you Ultimate Rewards points, like the ones you earn from shopping. (Photo by filadendron/Getty Images)

If you have a large stash of Ultimate Reward points in your account, you may want to keep your Chase Sapphire Reserve to maintain your current redemption options.

If you decide not to renew your Sapphire Reserve, you should take care of your Ultimate Rewards points before closing or downgrading your card. For example, you could use your points or you could transfer your points to a hotel or airline partner where you know you will use them or you could transfer them to another Ultimate Rewards account for safe storage.

There are other Ultimate Reward cards that also have the ability to transfer points 1:1 to transfer partners, including the Chase Sapphire Preferred Card and the Ink Business Preferred Credit Card. However, there is no other Ultimate Rewards card that 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, 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.

Related reading: How to maximize your Chase Ultimate Rewards points

What’s your 5/24 status?

Chase cards that earn Ultimate Reward points can be difficult to get because of Chase’s 5/24 rule. Under this rule you cannot have opened five or more personal credit cards across all banks in the last 24 months to be approved for any new Chase card subject to 5/24.

If you think you are going to close your Sapphire Reserve and then apply for the Sapphire Preferred, make sure you are under 5/24 and that you haven’t received a bonus for any Sapphire card in the past 48 months.

Related reading: Chase Sapphire Preferred vs. Chase Sapphire Reserve: Which card is right for you?

Alternatively, if you decide keeping your Sapphire Reserve isn’t the best idea for you, you may want to request a product change to a no-annual-fee Ultimate Rewards card such as the Chase Freedom Unlimited. This card earns 1.5% cash back on all purchases, which can become 1.5 Chase Ultimate Reward points if you have a Chase Ultimate Rewards card such as the Chase Sapphire Reserve, Chase Sapphire Preferred Card or Ink Business Preferred Credit Card.

Related reading: How to calculate your 5/24 standing

Bottom line

There are many factors to consider when it comes to deciding whether you want to pay the annual fee to keep your Chase Sapphire Reserve open for another year. I hope 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. But be sure to weigh your own situation and preferences above all when it comes to making this decision.

Still undecided? The following guides may help:

Additional reporting by Summer Hull.

Featured photo by The Points Guy.

2019 TPG Award Winner: Premium Card of the Year
Chase Sapphire Reserve®

SIGN-UP BONUS: 50,000 Points

TPG'S BONUS VALUATION*: $1,000

CARD HIGHLIGHTS: 3X points on all travel and dining, $300 annual travel credit, 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.

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More Things to Know
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 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
  • 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
  • Up to $100 application fee credit for Global Entry or TSA Pre✓®
  • One Year Complimentary Lyft Pink ($199 minimum value). Complimentary DashPass subscription from DoorDash after activating by 12/31/21.
Intro APR on Purchases
N/A
Regular APR
18.49% - 25.49% Variable
Annual Fee
$550
Balance Transfer Fee
Either $5 or 5% of the amount of each balance transfer, whichever is greater
Recommended Credit
Excellent Credit

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.

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