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We recently learned that the Chase Sapphire Reserve®, one of the most popular premium travel cards, is raising its annual fee to $550. It's never good news when a card raises its annual fee. However, Chase is also adding several new benefits to offset the increased fee, including new partnerships with Lyft and DoorDash.
- 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®
- Named "Best Premium Travel Credit Card" for 2018 by MONEY® Magazine
- $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.
- 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
Before these changes were announced, provided you traveled more than a few times each year, the Sapphire Reserve easily paid for itself year after year. With the incoming changes, a lot of people will be wondering if it's still a valuable card to hold, particularly with the higher annual fee.
In this post, we're going to scrutinize the benefits provided by the Sapphire Reserve, both old and new, to help you decide if it's worth holding at the new, higher price point.
Value Proposition Before Changes
Before Chase rolled out the new changes, primary benefits included:
- Earn 3X Ultimate Reward Points per $1 spent on all travel and restaurants worldwide
- Redeem Ultimate Reward Points for 1.5¢ each — Sapphire Reserve cardholders get more value for each Ultimate Rewards point when redeeming through the Chase Travel Portal. For comparison, points earned with the Chase Sapphire Preferred® Card and Ink Business Preferred® Credit Card are worth 1.25 cents each towards travel booked through Chase
- $300/year flexible travel credit — Depending on your ability to use this, it effectively reduces the annual fee by $300.
- Priority Pass Select Membership — Both primary cardholders and authorized users receive a Priority Pass card, which includes the cardholder +2 additional guests. Unlike the Priority Pass Membership obtained through Amex cards, Sapphire Reserve cardholders also get access to Priority Pass restaurants.
- Primary, World-Wide Rental Car CDW Insurance Coverage
- Complimentary Avis Preferred Elite Status
- Complementary National Executive Elite Status
- Get 20% off Rentals with Silvercar
- Trip Delay/Cancellation and Luggage Protection — This is among the strongest travel insurance benefits offered by any card
Thankfully, none of these benefits will be dropped for the time being.
New Lyft Benefits
- 10X Ultimate Rewards Points per dollar on all Lyft rides paid with Sapphire Reserve
- This is an additional 7X compared to before.
- Depending on how you value Ultimate Rewards, this represents between 15-20% back on Lyft rides.
One Year Complimentary Lyft Pink Membership
- Worth at least $199
- 15% off all Lyft rides
- Priority airport pick-ups
- Relaxed Cancellation Policy
- Waived Lost and Found Fee
- Three free 30-minute Lyft scooter or bike rides per month in select markets
Complimentary DashPass Membership
- Complimentary DashPass membership valid for “up to 2 years.”
- Monthly $9.99 subscription fee waived through December 31, 2021.
- Waived delivery fees at select vendors on orders of $12 or more
- Reduced service fees on orders of $12 or more
DoorDash Annual Statement Credits
- Up to $120 in statement credits on DoorDash Purchases
- $60 through December 31, 2020
- $60 in 2021
Important Terms and Conditions
While the new Lyft benefits seem relatively straightforward, we noticed a couple of interesting items worth mentioning in the DoorDash Terms and Conditions. As you might assume, the clock doesn't start on your annual DashPass membership until you activate it yourself. The terms don't clearly state how the end of your complimentary membership is calculated, and we weren't able to get a clear answer by talking to Chase's customer service.
However, once you have activated your DashPass membership, you can see the end date on their “manage subscription” page. For example, one of our team members enrolled on January 22, 2020, and got an expiration date of December 31, 2021.
More importantly, the Terms and Conditions specify that “when your free trial has expired, your subscription will automatically convert into a paid DashPass subscription, and DoorDash will bill you the applicable fee”. This makes it even more important to know how long this free membership is supposed to last since you're going to be charged for the membership afterward. After you verify the end date, make sure you set a calendar reminder to decide if you want to renew on a paid basis. The terms and conditions do state that if you participated in a free trial or other promotional subscription, you “may cancel within the first 48 hours of your paid DashPass subscription and receive a full refund”.
Activating the New Benefits
Both the Lyft and DoorDash promotional memberships can be activated by locating and following the prompts under “Featured Benefits and Offers” in the Ultimate Rewards Portal. Alternatively, you can activate them individually. For Lyft Pink, sign-up here. For DoorDash, download the app here (Apple) or here (Android) and add your Sapphire Reserve as the payment option. You'll see the option to activate the complimentary DashPass membership once you've added your card.
How to Assign Value
The value of each of these new benefits will be different for everyone. To decide what they're worth, you first have to ask yourself a few questions. Do you regularly use Lyft or other rideshare apps? What about food delivery apps? Will you get any value out of these perks?
Since I was wondering the same thing for myself, I started by looking at my habits from 2019. For DoorDash, it was straightforward. I spent exactly $0 on food delivery apps in 2019. Even with the $60 annual credit, I don't foresee this changing, so I value the DoorDash benefit at $0.
One of my AwardWallet teammates (who is also currently working through the math on the new Sapphire Reserve changes), orders 3-5 times per month from food delivery apps. If you consider an average savings of $4.00 per order, the DashPass should save him $192 each year, plus the $60 statement credit for a total of $252.
For Lyft, it was a little more complicated, since I use rideshare apps quite often.
- In 2019, I spent $230.69 on Lyft Rides; if I had Lyft Pink at the time, I would have saved 15% or $34.60.
- In 2019, I spent $578.18 on Uber Rides. Switching to Lyft and assuming similar prices, I would have saved $86.73.
- If I had earned an additional 7X (10X total – 3X I did earn) Ultimate Rewards Points on all of this rideshare spend, I would have earned 5,662 more points. Valuing these at 1.7¢ a piece, that would equal an additional $96.25 in points earning.
Between the 15% savings on the ride fares and the additional points earning, these Lyft benefits would have been worth almost $217 total to me in 2019! If my spending habits stay about the same this year, this is the kind of value I can expect.
Evaluating Chase Travel Portal Spend
Although not a new or changed benefit, the 1.5 cents-per-point redemption rate on bookings through the Chase Travel Portal might be an essential factor in whether it makes sense to keep this card. If you know you'll be transferring points to an Ultimate Rewards partner, the Sapphire Reserve ‘s enhanced redemption rate through the Chase Travel Portal is irrelevant.
On the other hand, if you do use the Chase Portal, the Sapphire Reserve can help you stretch your points significantly further. If you're unfamiliar with these two redemption options, check out these links for our comprehensive guides:
In addition to the Chase Sapphire Reserve®—which gets 1.50 cents per point—there are six other Ultimate Rewards cards which are currently open to new applicants:
- Sapphire Preferred – 1.25 cents per point
- Ink Preferred – 1.25 cents per point
- Chase Freedom® – 1.00 cents per point
- Chase Freedom Unlimited® – 1.00 cents per point
- Ink Business Cash℠ Credit Card – 1.00 cents per point
- Ink Business Unlimited℠ Credit Card – 1.00 cents per point
Let's look at a quick comparison between the Sapphire Reserve and it's closest alternative, the Sapphire Preferred. While $0.0025 per point may not seem like much at first glance, it can make a big difference:
- If you value the CSR's $300 annual travel credit at cash value, then the new annual fee disparity between the Sapphire Reserve and the Sapphire Preferred is now effectively $155.
- $550 (Sapphire Reserve annual fee) – $300 (travel credit) = $250 (net annual fee) – $95 (Sapphire Preferred annual fee) = $155 (fee disparity)
If we assume, for the sake of argument, that you get ZERO value from any of the other Sapphire Reserve benefits (including Lyft and DoorDash), then mathematically you break even with the Sapphire Reserve‘s annual fee if you redeem at least 62,000 points through the portal per year.
- 62,000 URs * $0.015 = $930 (Travel Portal value with the Sapphire Reserve)
- 62,000 URs * $0.0125 = $775 (Travel Portal value with the Sapphire Preferred)
- $930 – $775 = $155
- If you redeem more than 62,000 points per year through the Chase Portal, then the Sapphire Reserve is a better value.
I redeemed 63,105 URs through the travel portal with my Sapphire Reserve in 2019. This means I obtained an additional $157.76 in value from my points compared to their worth if I only had the Sapphire Preferred.
The Sapphire Reserve‘s current sign-up bonus is 50,000 Ultimate Rewards Points after you spend $4,000 on purchases in the first 3 months from account opening. If you conservatively value each point at 1.5¢ a piece, then this bonus is worth $750. In this regard, the sign-up bonus easily eclipses the annual fee and makes it easy to justify giving the Sapphire Reserve a try. If you aren't sure how the card benefits will work out for you, you can monitor during the first year, knowing the value from the bonus will put you solidly ahead of breakeven.
If you don't think the benefits will outweigh the increased fee, the Chase Sapphire Preferred® Card is a great alternative.
- Earn 60,000 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®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That's 3X points in addition to the 2X points you already earn on travel.
- 2X points on travel and dining at restaurants worldwide
- 1X point per dollar spent on all other purchases
Each of these considerations and calculations will be unique to you and your lifestyle. If you regularly use the Chase Travel Portal, often book rideshares, and have been known to order some take-out, you'll have no trouble justifying the annual fee, even at the higher price point. Others who can’t use these benefits may want to consider the Sapphire Preferred or Ink Preferred instead.
As a Sapphire Reserve cardholder, when I first read the news about the updated benefits and the raised annual fee, I reacted the same way a lot of people did. I felt disappointed. However, in the process of writing this post, I've realized just how much value I will continue to get from the Sapphire Reserve under the new program. My redemptions through the Chase Travel Portal notwithstanding, the new Lyft benefits alone will more than make up for the $100 increase. We'll have to wait and see how these benefits, which are currently only temporary, develop come next year.
How do you feel about these updated benefits? Are you still planning to keep your Chase Sapphire Reserve®? Do you have a different method of calculating its value? Let us know in the comments.
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