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The Chase Sapphire Reserve℠ is a premium travel rewards card featuring an impressive list of benefits and fetching a hefty $450 annual fee. The card earns 3X points on travel and dining, provides an industry-leading $300 travel credit, a guaranteed 1.5¢ per point redemption value on travel purchased through the Chase Travel Portal, and offers top-tier travel benefits like complimentary lounge access, primary auto-rental insurance, and multiple travel protection policies.
A common question we field here on the blog, and in our Facebook community Award Travel 101, is whether the Sapphire Reserve is worth the $450 annual fee. With the Chase Sapphire Preferred® Card available for a $95 annual fee (waived for the first year), at what point does it make sense to pay $450 a year for the Sapphire Reserve? How much do you need to spend on bonus categories to break even? Do you need to use every benefit to make up the out of pocket expense? In this post, we'll strip the equation right back to basics, and help you determine if the Sapphire Reserve is worth the $450 annual fee.
How Does the Chase Sapphire Reserve℠ Measure Up?
We’ve chosen to use a conservative 1.5¢ per point redemption value for our calculations on the Sapphire Reserve, and 1.25¢ for the Sapphire Preferred. It’s common knowledge you can redeem Ultimate Rewards points for better returns by transferring to travel partners, and booking premium cabin award space or top-tier hotels.
However, 1.5¢ is achievable for any Sapphire Reserve cardholder, and 1.25¢ for Sapphire Preferred cardholders, whether brand new to award travel or a veteran points and miles fan, and we consider it a fair benchmark for our calculations. We’re also going to make some underlying assumptions:
- You spend at least $300 on travel each year. If you don’t, the Sapphire cards are not for you. The Sapphire Reserve is a premium travel rewards card; if you spend less than $300 per year on travel, there are better cards to suit your needs.
- If the numbers don’t add up on the Sapphire Reserve, you’ll apply for the Sapphire Preferred. You’ll need either one of these personal Ultimate Rewards earning cards to maximize the value of your Ultimate Rewards.
The Sapphire Reserve $300 travel credit is applied automatically and offers the broadest range of definitions of any card in the travel rewards sector, including:
“…airlines, hotels, motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, and operators of passenger trains, buses, taxis, limousines, ferries, toll bridges and highways, and parking lots and garages.”
Assuming you spend at least $300 a year on travel ($300 that you would have spent whether you had the card or not), the net cost to hold the Sapphire Reserve is only $150 a year. Deduct the $95 annual fee you'll pay to keep the Sapphire Preferred long-term, and you’re left with a $55 difference in the out of pocket expense.
We’ve only included bonus category spend in our equations. There are better credit cards than the Sapphire cards for non-bonus category purchases, including other cards within the Ultimate Rewards family like the Chase Freedom Unlimited℠. The Sapphire cards consistently top ‘best card’ lists for travel and dining purchases, and realistically, that would be the vast majority of the time they come out of our wallet.
What we’re looking for in this instance, is the breakeven point for the Sapphire Reserve over the Sapphire Preferred; how much do you need to spend in bonus categories to make up the $55 difference to hold the cards? Additionally, we've factored in the $75 you'll pay when you add an authorized user account to the Sapphire Reserve, which blows the difference in cost between the two cards out to $130 per year.
Lastly, we've explicitly left the signup bonus out of the calculation here. While the cards carry the same signup bonus of 50,000 points, there is additional value with the Sapphire Reserve as those 50,000 points are worth at least 1.5¢ vs. the 1.25¢ with the Sapphire Preferred, which translates into a $125 positive net value on the Sapphire Reserve. Our focus here is identifying the long-term value of holding one card versus the other.
- 2X points on travel and dining
- Redeem points at 1.25¢ for travel
- No cost to add authorized users
- 3X points on travel and dining
- Redeem points at 1.5¢ for travel
- $75 per year for each authorized user
Here’s an example of how we break down the numbers:
- $2,000 in travel and dining spend @ 3X points = 6,000 Ultimate Rewards
- 6,000 points @ 1.5¢ per point = $90 (net return on spend)
|Spend on Travel & Dining||Sapphire Preferred |
2X points @ 1.25¢
3X points @ 1.5¢
|Difference in the value of points earned|
† $2,750 is the breakeven point without an authorized user
†† $6,500 is the breakeven point with an authorized user
To come out ahead of the net $55 out of pocket expense, you need to spend $2,750 on travel and dining each year to justify the difference in annual fees, the equivalent of $52.88 per week. This doesn’t account for any other benefits such as lounge access, the Global Entry credit, or enhanced insurance offerings. If you value lounge access at $20 per person, then a family of four gets $80 value from the lounge access benefit each time they visit the lounge together, which you can deduct from the out of pocket expense for holding the card before calculating your breakeven spend.
When you add an just one authorized user account into the mix, you would need to spend $6,500 a year on travel and dining for the Sapphire Reserve to provide a better return than the Sapphire Preferred, without factoring in other benefits.
To sum up, the Sapphire Reserve is a premium travel rewards card. If you won’t use the lounge access or don’t spend a minimum of $2,750 per year on travel and dining, you can achieve better returns from the Sapphire Preferred. Add one or more authorized users into the mix, however, and you need to more than double your spend in bonus categories before the Sapphire Reserve offers a better return.
If you visit Priority Pass lounges 3-5 times a year, spending less than $1,000 on travel and dining tips the scales in favor of the Sapphire Reserve. While the card charges a $450 annual fee, the cost to the cardholder is mitigated by the fantastic travel benefits, and massive return on travel and dining spend, making the Sapphire Reserve an excellent option for any normal traveler.
Don't forget that if you're leveraging a combination of Ultimate Rewards earning cards, you need to also add in the potential value the Sapphire Reserve provides with the additional .25¢ in minimum guaranteed value for travel on all of the points you earn with the other Ultimate Rewards cards.
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