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A common question, especially among new credit card points enthusiasts, is “which Chase Sapphire card should I get?” Deciding between the Chase Sapphire Preferred vs Reserve card can be a challenge. With a large difference in annual fees, it can be hard to understand why someone would opt for one over the other. In this video/post, we hope to break down the differences and help you determine the best Sapphire card for you.
Picking a Chase Sapphire card
The Chase Sapphire cards are some of the best travel rewards cards on the market. It’s often the first card that gets recommended due to Chase’s strict approval rules like 5/24 and 2/30. However, deciding between the two cards can be tough. The Sapphire Reserve has a $450 annual fee that’s hard to stomach for a lot of people, especially if you’re getting started in this hobby.
I thought I’d walk through my decision process on deciding between the Sapphire Preferred and Reserve card. You might feel different about it, and that’s completely fine. Everyone is going to have different spending and travel patterns, so there is no right or wrong answer. If anything, you can baseline my use case against yours to see if you would benefit from one card over the other.
Chase Sapphire Preferred vs Reserve card
Those of you that follow our website and channel regularly know that I am a big fan of the Sapphire Reserve. I got the Chase Sapphire Preferred in 2012 and I never imagined that I would replace it. However, Chase announced the Sapphire Reserve in 2016 with a 100,000 points bonus offer. All of a sudden, I was anxious to replace my Sapphire Preferred with the new Reserve card.
Below are some of the compelling reasons why the Sapphire Reserve was so appealing:
1. 100,000 points opening bonus:
This was the initial offer when the card first came out. In fact, Chase reported several quarters of losses after the card was released. As a result, they reduced the bonus to 50,000 points and have kept it there ever since. For those of you that got the card when it was offered, it was an incredible deal. It’s also a good reminder of why it might be worth slowing down on your credit card applications. You never know when the next big card offer is released. You don’t want to miss the opportunity because you’ve been aggressively applying for so many cards.
2. Additional bonus point for dining and travel:
Since these are categories of spending that I tend to use a lot, I knew I would take advantage of it. It’s only one more bonus point over the Sapphire Preferred but it all adds up.
3. Annual $300 travel credit:
This credit is automatically applied to your account every year whenever a qualified expense is charged.
4. Priority Pass lounge membership:
The Reserve card comes with lounge membership for the Priority Pass network. You are currently allowed to bring unlimited guests with you into the lounge. Though they are restricting the number to two guests starting in late August 2018. Priority Pass membership also provides reimbursement for meals for two people at some airport restaurants.
5. Primary car rental insurance:
This benefit allows me to opt out of the expensive and confusing insurance offered by the rental car companies. If you rent cars often, this is a valuable and useful benefit. See our video/post on rental car insurance for more information.
6. Global Entry reimbursement:
The card reimburses the Global Entry application and renewal fee and can be redeemed once every five years.
7. Additional redemption value from Chase:
If you use the Chase Travel Portal, you can redeem your Ultimate Rewards points at 1.5 cents instead of the usual 1.25 cents.
What about the $450 annual fee?
Right off the bat, you’re getting a $300 credit every year that is automatically applied to qualifying expenses. In my case, I’ll notice that my parking and ride-sharing charges get credited on my account. Even if you don’t travel very often, you’ll likely use the $300 in your daily life since Chase has a broad definition of what qualifies as “travel”.
That brings that annual fee down to $150, which is $50 more than the Sapphire Preferred. I spent about $420 a month on dining and $420 on travel, which totaled around $10,000 last year. Many of these charges were for work, so I may not spend as much this current year. However, it provides a ballpark estimate of how much value I’m getting from the bonus category.
Additional value and benefits
According to my spending last year, I come out on top with the Sapphire Reserve. If you add in the extra benefits, such as the lounge membership and Global Entry credit, then the value proposition is even higher. In fact, I renewed my Global Entry earlier this year, so that was another $100 redeemed from the card. I’m confident that I will have extracted more value than the cost this current year.
A lot of people have expressed disappointment with the Priority Pass lounges. There are definitely some overcrowded and outdated lounges in the network. Though when I think of the amount of money that we would have spent eating and drinking at the airport, I feel more appreciative of the perk. We used our Priority Pass lounge access seven times last year. Assuming that we would spend $15 on food and drinks in the airport each time, we saved over $100 with our Priority Pass membership.
Again, these numbers are estimates, and your situation may be completely different. For me, the Reserve card is worth keeping since we tend to take advantage of the benefits. Fiona, on the other hand, also has a Sapphire Reserve, but she is looking to downgrade before her next annual fee is up. While she takes advantage of the perks, we can still benefit by having one Reserve card between us since we often travel together.
I know many people get anxious about the Reserve’s annual fee, which isn’t even waived the first year. If that’s you, I wouldn’t hesitate to give the Sapphire Preferred a try. The Preferred’s annual fee of $95 doesn’t get charged until your second year, so it won’t cost you anything the first year. If you find that you want more, then you can always upgrade to the Sapphire Reserve. If you already have the Sapphire Reserve, you may be worried about the amount of value that you’re going to get in the following year. If so, you can always downgrade to the Sapphire Preferred before your annual fee is charged.
One last thing to keep in mind is that it’s more difficult to get an approval for the Reserve card than the Preferred. The Sapphire Reserve requires a minimum credit limit of $10,000, which can be difficult when you’re first starting out. According to Credit Donkey, the average credit score to get an approval is 750, which is fairly high. You’ll want to be mindful of the requirements before applying for either card.
Do you have a Sapphire Reserve or Preferred card? If so, let us know why you chose one over the other? I think it helps others to hear why someone picked a specific card.
If you’re interested in applying for any of the cards mentioned in this video, check out our Credit Card Offers page. We do get a percentage if you use our link. It doesn’t cost you anything extra, but it does help us to continue creating content.