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A little over a year ago, with much fanfare Chase launched a new travel oriented rewards credit card, the Sapphire Reserve.
Despite a seemingly steep annual fee ($450), we were eagerly among the early adoptees.
After a year of card use, did the benefits exceed the cost? Let’s check (hint: yes, they did indeed.)
The benefits of the Chase Sapphire Reserve are many.(Disclaimer: benefits change all the time, this is believed to be true as of 10/29/2017.)
The benefits that I personally find most valuable are:
- $300 annual travel credit – reimburses $300 in travel expenses, effectively reducing annual fee to $150
- 3X Ultimate Rewards points on Travel and Dining worldwide – at ~2.2¢ per point, this yields 6.6% back
- Airport lounge access – free food and a comfortable / quiet place to sit in global airports (with free guest access!)
- No Foreign Transaction Fee
- 1:1 Point Transfer to a plethora of airline and hotel rewards programs (huge opportunity for high valuation!)
Great benefits that we haven’t used (yet?)
- Global Entry or TSA Pre Fee Credit – $100 credit for enrollment in these programs (a must for US residents, imho)
- Auto Rental Collision Damage Waiver – Primary car rental insurance (nice!)
- 1.5x Travel Rewards – 1.5¢ per point when booking travel through the Chase travel portal
- More – numerous and various
See more details on card benefits for this and other travel rewards cards on CardRatings.com (affiliate link.)
Crunching the Numbers – Card ROI
There are two forms of monetary benefits, real dollars and points. Let’s look at both
Annual Fee: -$450
The first billing cycle came with a charge of $450 for the annual fee.
Travel Credit: +$600
The $300 annual travel credit directly reimburses for travel related expenses per year. When we signed up for the card Chase had a weird policy where the reimbursement period was based on the calendar year (Jan – Dec) versus cardmember year. This means we were reimbursed $300 for flights/hotels/Uber in Oct & Nov 2016, and then double dipped for another $300 in Jan+.
Lounge Access: +£30 (~$40) plus $10+ in beverages we would have otherwise paid for
I would probably never pay for access to airport lounges, so the impact to the bottom line is zero, but with this card access is free… so, why not? (Retail value, +/- $250.) We were able to enjoy a bit more comfortable seating and a beer / coffee / snacks in Taipei, Athens, Amsterdam, London, and San Francisco… maybe more?
But my favorite was London’s Gatwick airport, where the lounge was full. Apparently we had to make a reservation in advance. Instead, our bill at the restaurant across the hall was discounted £15/person.
Total monetary benefit: +$200
Coming out ahead by $200 on the annual fee is nice, but where this card really shines is with points.
Sign up bonus: $1k cash -or- $1.5k direct travel booking -or- $2.2k+ via point transfers
As an early adopter we had the opportunity to earn 100,000 points by spending $4k in the first 3 months. Mission accomplished. (The signup bonus was quickly reduced to its current level of 50,000 points.) 100k points could be converted directly to $1,000 in cash or $1,500 in travel purchases, or transferred to partners for even higher ROI.
Earning: $1.2k+ cash… -or-… $1.8k direct travel booking -or- $2.6k+ via point transfers
According to the Ultimate Rewards portal, we have earned 121,594 points this year. In terms of efficiency, a full 88% of total spending ($44,201) was in 3 PTS/$1 earning categories of Travel and Dining. Not bad. A healthy percentage of the 1 PT/$1 spending was on estimated tax payments as part of meeting the minimum spend requirement.
Point transfers: ~$3k actual savings
We transferred UR points twice to book International flights.
- Transferred 10,000 UR points to British Airways, as part of saving $19,000 on Business Class airfare to Paris.
(UR portion saved ~$1,000, 10.8¢/point!)
- Transferred 70,000 UR points to United for 2 economy flights from SFO to Tokyo Haneda on ANA
(Total savings ~$2,000, 2.86¢/point.)
Despite the use of 80k points to date, we still have a few extra points to spend on future travel (We’ve combined all UR points into this one account.)
Future Card ROI
Clearly this card has had tremendous ROI to date, with $4.4k+ earnings in the first year. Will it continue to earn its keep?
With no signup bonus for continued usage, future ROI will be lower. However, the signup bonus accounts for less than 25% of the value we reaped this year.
We will only get one annual $300 travel credit going forward, which means we would need to earn enough points through purchases to offset our actual outlay of $150 ($450 – $300 travel credit.) Since most of our actual cost of living is in the heavy earning Travel and Dining categories, this is fairly easy. With potential of 2.2¢+ per point in travel value, we only need to use the card for $2,275 worth of travel / dining expenses.
Were our travel / dinging spending to come down in the future, I would probably downgrade to the Chase Sapphire Preferred card. The Sapphire Preferred card earns 2 points/$1 on travel / dining, but comes with a lower annual fee ($95, waived first year, but also a new 50k point signup bonus.) But with the great transfer partners, we will always have at least one of these two cards.
Overall the Chase Sapphire Reserve looks like a keeper, and will enjoy a busy spot in our wallet (& Apple Pay wallet) for another year.
Compare these cards with other great travel rewards cards.
Did you get great ROI with the Sapphire Reserve?
Editorial Note – Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.