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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.
- 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.
- 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.
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.
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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