The Chase Sapphire Reserve Card: Is it $450 well Spent?

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.

csr

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

Earing status

  • 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.

bora-bora

$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.

Value

So let’s add up all these great benefits and then calculate the value of the benefits less the hefty $450 annual fee:

csr-value

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?

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  • Avtaar

    I would keep the Chase Sapphire Reserve even during the upcoming years. Here is why.

    This card is an awesome addition to the Chase family of cards. Let me compare here the overall value difference between the Chase Sapphire Reserve (CSR) and Chase Sapphire Preferred (CSP). I will take my own spending analysis as an example. I am not a huge traveler, I travel once in a while with family or buy tickets to my parents to travel. I sat down to do the Math to see if it makes sense for me to apply for this card (I already have CSP card). Let me admit the fact that I also have Chase Freedom and Freedom Unlimited cards and my wife and I know which card to use when to earn maximum Ultimate Reward (UR) Points.

    Let’s look at my spending closely. The first thing I analyzed was my expenditure over the past 4 years (I referred to year-end summaries) and I found that I have consistently spent around $350 on “Transit” which included- Parking (street and occasional airport), E-Z Pass tolls, occasional river cruise, occasional Uber etc which I am sure will do every year. So this pattern of my spending qualifies for the $300 “Travel Credit”. This takes away around 65% of $450 annual fee that the CSR has. Needless to say that the person reading this is ready to use the UR points ONLY FOR travel.

    Then I looked at the UR Points that I earn from my Freedom and Freedom Unlimited card. In the worst case scenario every year I earn 175K from Freedom (We religiously use this card only for 5% cash back categories only and nothing else) and 220K from Unlimited card (I use it for all other expenditure other than Travel and Dining for which I used CSP).

    Let me break it down further to see if it makes sense for me to apply for CSR card with my low travel spending. Let me assume that I have CSR card with me for the next 1 year. I spend around $2300 on dining outside which will earn 6900 UR Points with CSR card and even if I spend around $350 bare minimum on travel it will earn me 1050 UR points (this is the worst case scenario). Once I add this up it gives me a total of 47400 UR Points ($474). If I use this for my occasional Travel via Chase Portal the value is up by 1.5 times which is $474 X 1.5 = $711. Let’s take away the remaining annual fee out of this ($711-$150) which gives us the net gain of $561 which is awesome!! Let me add my wife as an authorized user so the net will go down to $ 486 ($75 annual fee for an authorized user) which is nothing less than awesome and even in the worst of the worst case scenario where you do not even qualify for $1 of Travel Credit in one of those years (extremely unlikely) you will not spend anything out of pocket. Happy?? 🙂

    Now let’s do the same math with one of my favorites Chase Sapphire Preferred. If you do the math as above with 2 points earning per $ spent on travel and dining I would have earned 4600 UR points for dining outside and 700 UR points on travel. Let’s put everything together, which gives me $448 ( $220+ $175+ $46+ $7). Now let’s redeem this for travel, remember Chase Sapphire Preferred gives is 1.2 times more value. So $448 X 1.2= $537. Now let’s look at the net value by taking away the annual fee of $95 which gives me $446. This card does not charge for authorized user.

    Conclusion: There is no question that Reserve card has superior benefits compared to Preferred. Here I conclude that for anyone like me who does not travel much at all and have Freedom and Freedom Unlimited cards (both earn UR Points) the overall net benefit is more with $450 annual fee CSR card when compared to lower fee CSP card (Please see the math above).

    Now guys! Do the Math and check if you could have CSR instead of CSP without spending even a $ more. Don’t be scared or discouraged by $450 annual fee. Of course needless to say that if you don’t travel much, you need to have both Freedom and Freedom Unlimited cards and know when to use which of these 3 cards. All you need is these 3 cards!!

    Good luck! Keep rocking!

    • Sourcing Simplifiers

      wow excellent analysis. I’ll definitely need to rethink my plan next year.

      • Avtaar

        Thanks! Hope you agree😊