The travel hacking world is an absolute frenzy about the new Chase Sapphire Reserve card. Based on the buzz I’ve been seeing you’d think it was the greatest credit card to have be issued. In this blog I’m going to get into why it is a really great card and why you should consider getting it, but why it is NOT a good card to get for everyday use as a reseller.
Here is a quick highlight of some of the perks which I’ll get into in more detail below:
- 100,000 Ultimate Reward points after (what’s minimal spend) 4k in 3 months
- Can be used for $1.5k in travel booked through Chase Portal
- $300 Annual credit for travel purchases
- $100 statement credit for Global Entry or TSA Pre check
- No Foreign transaction fees
- Priority Pass Select for access to airport lounges
- 3x Ultimate Rewards for travel & dining
- 1x Ultimate Rewards for all other purchases
Those perks sound pretty good right? Should be a no brainer to get this card. Well here is the catch, there is a $450 annual fee that will be charged on the first statement. Many people outside of the travel hacking world will immediately ignore the card just based on that fee as who wants to pay $450 just for a credit card when you can get plenty of great cards for free. Well let me try to place value on each of the benefits so we can see what you are getting for the $450.
100,000 Ultimate Reward points
100,000 Ultimate Rewards can be turned into $1,000 statement credit if you want. Therefore, you can wipe out your annual fee and you still have 55,000 in Ultimate Rewards or $550 in cash if you prefer. However, turning UR points into cash wouldn’t be the best use of them. You can actually use the 100,000 points to book $1,500 worth of travel on Chase’s travel portal. Or you can transfer them to one of the many travel partners including United Airlines, Southwest, Hyatt and Hilton to name a few. At minimum you should be able to get $1,500 worth of value out of the 100,000 points, but to be conservative let’s put the value of this at $1,250
$300 Annual Travel Credit
This is a really nice perk as well. Specifically, what makes it great is you get $300 per calendar year. Which means you should be able to get the credit twice before the annual fee needs to be paid again. Additionally, you don’t need to go through a rewards portal or request for credit to be applied it will automatically be applied. The credits apply to anything that codes as travel this includes things like flights, hotels, taxis, cruises and likely many other things. If you currently pay for over $600 on travel in a rolling 12 month period than it should be easy to get $600 value out of this benefit. With travel credit and 100k Ultimate rewards you can be on your way to booking your dream vacation.
$100 statement credit for Global Entry or TSA Pre check
Tired of waiting in long security lines while slow ass families like mine take forever with their 2 kids running amuck? Well Global Entry/TSA Pre Check is the way to go. Not only do you skip right through the lines, but you get to keep your shoes on. These perks cost $100 bucks and require lengthy application/interview process. If this is something you really need and want then you can get $100 value out of it. However, I’m sure many of the folks getting this card already have Pre Check or just isn’t worth $100 bucks to them so let’s just include this as an added bonus and not factor the total value.
Priority Pass Access Lounge
People love their airport lounges. Who wants to hang with all the common folk in the crowded gate waiting area when you can hang out in a lounge and get free drinks and food? This is really nice when airline delays your flight for 6 hours. But in all seriousness, I don’t mind waiting with the common folk and I am not going to place much value onto this perk. Retail value is $249.99 or so but let’s just count it as an added value for our calculations.
No Foreign Transaction Fee
Nice perk, but lots of cards have it. Nothing special here, no added value for most.
So let’s add up all these great benefits and then calculate the value of the benefits less the hefty $450 annual fee:
So at low end you should be able to get $1,400 of benefits out of this card AFTER annual fees and at the high end closer to $2,000. If you get a good redemption on your UR points you could technically get it even higher. So to me this is a no brainer to get for the huge sign-up bonus and other perks.
Reseller Worthy & Retention Beyond 1 year
The CSR earns 3x UR points on travel and dining which is a nice little perk, but certainly not going to come in very handy with reselling. While I love Ultimate Rewards, I can get 1.5% Ultimate Rewards with the Chase Freedom Unlimited, 5% at office supply stores with my Chase INK and 5% at rotating categories on Chase Freedom. I can get 2% cash back on everything with cards like the Spark Business or Citi Double. I can get 3% back on most online arbitrage purchases with the Citi AT&T Access More card. There are lots of better options for my resale purchases than 1% back on the CSR as you can read in our Reseller Credit Card Strategy blog. Therefore, I’ll bang out my minimum spend to earn the 100,000 in Ultimate Rewards and then the card will be exclusively used for dinning and travel purchases.
I can see the argument made that you should pay the $450 annual fee again as you will get $300 in free travel and all the other perks. However, those travel perks just don’t do it for me. Therefore, I’ll gladly take my 100,000 ultimate reward points, $600 in travel credits and the many other perks for $450, but its very unlikely I’ll be paying $450 a second time. It likely will be one and done for me.
How about you, do you think this card is worth $450 the first year? What about the second year and beyond?