Chase Temporarily Lowers Sapphire Reserve Annual Fee, Adds New Option to Cash Out Points

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Update: Chase extended and expanded the Pay Yourself Back feature multiple times since this post was published in May 2020. Click here for the latest on Chase Pay Yourself Back.

Update 10/22/2020: Through December 31, 2021, gas station & grocery store purchases will also count towards earning your $300 annual Travel Credit

One of the things that has impressed me most about the point and mile ecosystem lately is how quickly card-issuing banks have been able to implement changes in response to current events. All it takes is one look at our comprehensive guide to all of these changes to start feeling overwhelmed by the sheer number of updates.

However, it seems Chase feels it hasn't done enough. Today, Chase announced even more updates and improvements for its Sapphire cards. In addition to the temporary grocery bonuses that Chase previously announced, Chase Sapphire Reserve® and Chase Sapphire Preferred® Card cardmembers now have the ability to cash out their Ultimate Rewards points at grocery stores, home improvement stores, and restaurants for 1.5¢ and 1.25¢ a piece, respectively.

Additionally, Chase is lowering the Sapphire Reserve annual fee to $450 for all renewals between August 1 and December 31, 2020. For earlier renewals, Chase is offering a $100 statement credit as noted below. Chase is also expanding the use of the Sapphire Reserve‘s $300 annual travel credit to include purchases at gas stations and grocery stores.

Key Terms

Sapphire Reserve

  • Pay Yourself Back — Between May 31, 2020 and April 30, 2021, the Pay Yourself Back tool will allow cardmembers to redeem points for all or a portion of purchases at grocery stores, restaurants (including take-out and delivery services), home improvement stores, and select charitable organizations. Points redeemed this way will be valued at an increased rate of 1.5¢ per point compared with the 1¢ per point cardmembers can typically redeem points toward purchases.
  • Expansion of $300 Annual Travel Credit — Between June 1 and December 31, 2020, purchases at gas stations and grocery stores will qualify for the $300 annual travel credit in addition to travel purchases. This credit will be applied automatically. UPDATE: This has been extended through June 30, 2021.
  • Lowered Annual Fee — Annual fees posting from August to December 2020 will be reduced to $450. For cardholders that renew between April and July, Chase will bill the full $550 annual fee but provide an automatic $100 statement credit to effectively lower the fee to $450.

Sapphire Preferred

  • Pay Yourself Back — Between May 31, 2020 and April 30, 2021, the Pay Yourself Back tool will allow cardmembers to redeem points for all or a portion of purchases at grocery stores, restaurants (including take-out and delivery services), home improvement stores, and select charitable organizations. Points redeemed this way will be valued at an increased rate of 1.25¢ per point.

Additional Notes

There are two other bits of info worth noting. Chase has confirmed that you will continue to earn the temporarily raised bonus points for grocery purchases, even if you subsequently use points to Pay Yourself Back for the purchase.

With the Sapphire Reserve, that means that a $100 grocery store purchase would earn 500 Ultimate Rewards points. Then, you can redeem 6,667 points to get a $100 statement credit to that purchase. In the end, you only needed to use 6,167 points from your existing balance. That bumps the effective redemption rate to 1.62¢ per point on this $100 purchase.

Chase also plans to add the Pay Yourself Back tool to more Ultimate Rewards-earning cards over time.

The following charitable organizations are currently eligible for Pay Yourself Back: American Red Cross, Equal Justice Initiative, Feeding America, Habitat for Humanity, International Medical Corporation, Leadership Conference Education Fund, NAACP Legal Defense and Education Fund, National Urban League, Thurgood Marshall College Fund, United Negro College Fund, United Way, and World Central Kitchen.

Final Thoughts

The problem with offering such solid travel-based credit cards is that they are a lot less valuable when you can't travel. While I was excited about the increased grocery bonuses when Chased announced those, I agree that more needed to be done to make the Sapphire cards worth keeping.

This is especially true with the Sapphire Reserve given its higher annual fee for largely unusable benefits—such as lounge access, trip and car rental insurance, and bonuses for travel purchases. Lowering the annual fee back to $450 was a must. Raising the annual fee was a tough sell in the first place—even before travel came to a grinding halt.

Also, adding the ability to pay yourself back for groceries, restaurants, and home improvement purchases is an interesting bit of added flexibility, especially when cash is tight. However, Chase Ultimate Rewards are among the most valuable points currencies out there. You should be able to get much more value than 1.25-1.5¢ per point when transferring points to Ultimate Rewards' travel partners.

Do these updates affect your decision to keep or close your Sapphire cards?

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  • Thanks! I just went an use ~$200 worth of points on my CSP with this. I just don’t see how I can use the points anytime soon, and I’ve been spending a lot on groceries. No need to keep piling on points I won’t use.

  • I’m not a “hardcore” traveler as only have to travel few times per year and increase to $550 in annual fee really made me think of closing or downgrading this card. For $450 I’d keep it another year as other benefits make it worth keeping, so far. “Pay yourself back” is very welcoming redemption avenue making points earned by other Chase cards and then transferred to SR more valuable.

  • Punit Pragati says:

    Offering alternative way to redeem UR points is a welcome move by Chase – when people can’t or would like to avoid travel. I have Chase travel card and details provided in this blog are going to come in handy in redeeming UR points. Thank you!

  • One thing that isn’t mentioned here is that the 90-day window for redeeming UR points using the “Pay Yourself Back” feature means that purchases in these categories made as far back as early March are eligible right now.

    • JT Genter says:

      We weren’t aware that this would be possible when we wrote and published this piece. But, you’re right! And it’s a great opportunity for those who want to cash out more points at 1.5 cents each.

  • I like that Chase is thinking outside the box. I think this will help a lot of people. I am lucky enough not to need to do this and will continue to save my points for a trip. I wonder what they will come up with next.

  • Maybe they realized that a lot of people would drop the card if it were $550.

  • Does Amex platinum offer a COVID discount and extra benefits as well? There’s a flyertalk thread on retention offers (Google it) but no standard fixed offer that I can see.

  • Great – Nice to have this option now. Not really a hard decision now with deciding on the renewal.

  • My wife and I each had a Reserve card in the past. I cancelled mine due to the high fees and the fee I have to pay for my other cards. If Chase can lower the fee permanently, would be happy to get the Reserve card back!

  • This will definitely keep me for another year of CSR. Effective AF is only $90 at the next renewal. $300 credit on grocery by 12/31 is a great deal given most early adopters of CSR have the credit reset after December statement.

    • Don’t forget opportunity costs and real value. You’re not earning any points on that $300 and claiming $60 of value from DoorDash when the prices are inflated is tough too. Plus for me personally I wouldn’t use DD otherwise but that’s fine. I ready see value in the card at $150 and the DD credit is just a nice free meal or two for the family.

  • Now this is a relief. Times are tough right now. Well done Chase.

  • Big plus here. Do wonder how issuers will pivot from such a heavy travel rewards focus with travel likely to be significantly down (both business and personal) for several years.

  • Chase should be lowering the annual fee temporarily for everyone for the next 12 months instead of lowering it only for some specific group.
    As a CSR holder whose annual fee gets billed in January each year, I find this approach to be very unfair.

    • I had the same reaction you had (my annual fee gets billed in March). But then I realized that Chase raised the fee starting in April, and they’re just reducing it back to what it was before the increase. So I already got the lower fee (and so did you).

      We’ll both be stuck paying the higher fee in 2021, though (unless they extend the reduction to next year).

    • Likewise. February here. I think us Januarys, Februarys, and Marches are the only months that won’t get a waiver of the increase.

  • This has by far been the best response. Amex allowed their credits to be used at US locations but that doesn’t help me one bit. :/ I need to contact them and ask if they’ll make an exception. I’ll be cancelling the card if not.

  • I was on the fence about renewing my CSR this year. Now I’ll probably stay on board.

  • I really think that the coronavirus will make many people lose interest in travel cards because they become less interested in travels.

    • I think it’s certainly going to be a world with a lot of unknowns moving forward. I don’t know that hardcore travelers will lose interest, but barriers may be there that weren’t before.

    • Many “hardcore” travelers might not be so “hardcore” after all, I am afraid.

    • I’m not sure I agree with that at all. There’s definitely a short term dropoff but travel will get back to where it was.

      • Business travel will simply not return at the same levels. And, it will have nothing to do with pandemic risk. It will have everything to do with the enormous investment being made right now in remote working. Businesses across industries are being forced to finally learn that it’s very much feasible, still productive, if not more so, and saves significant money. Sure, tons of work will still be done in person once things return. But, business travel will remain reduced by some meaningful degree, simply because of the cost savings to be realized by avoiding travel and meeting online.

  • This will help me keep the card. It was crazy for Chase to have $550 annual fee even before the halt. I hope the reduction in annual fee is permanent.

    • The annual fee is simply too high when travels are often not possible.

    • I agree with this. While I won’t hold my breath, it would be great for the fee increase to be permanently reversed.

    • The new fee is definitely permanent but I think Chase is severely lacking. It’s priced directly in line with the Platinum card yet Amex gives you hotel status with both Marriott and Hilton and gives you Centurian lounge access and Delta club access when flying Delta with the only tradeoff being not getting restaurants within the Priority Pass network.

      Chase is stepping up their game during the crisis but they need to step up their game for charging $550.

  • is it worth upgrading CSP to the CSR to take advantage of the promotions?

  • Maryjane says:

    I am glad that Chase is doing this. It demonstrates they understand that many of the benefits of the card are not easily usable during these times. I hope they extend the extra points for groceries indefinitly.

    • Groceries is something I’m really hoping to see. You now have the Amex Green card competing with the CSR so adding groceries (and maybe a hotel status and/or lounge access) would make this single card compete with both the Gold and Platinum cards.