Rainbow of Credit (photo credit, badumtss)
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A little over a year ago, with much fanfare Chase launched a new travel oriented rewards credit card, the Sapphire Reserve.
Despite a seemingly steep annual fee (now $550), we were eagerly among the early adoptees.
After a year of card use, did the benefits exceed the cost? Let’s check (hint: yes, they did indeed.)
Benefits
The benefits of the Chase Sapphire Reserve are many.(Disclaimer: benefits change all the time, this is believed to be true as of 10/29/2017.)
The benefits that I personally find most valuable are:
- $300 annual travel credit – reimburses $300 in travel expenses, effectively reducing annual fee to $150
- 3X Ultimate Rewards points on Travel and Dining worldwide – at ~2.2¢ per point, this yields 6.6% back
- Airport lounge access – free food and a comfortable / quiet place to sit in global airports (with free guest access!)
- No Foreign Transaction Fee
- 1:1 Point Transfer to a plethora of airline and hotel rewards programs (huge opportunity for high valuation!)
Great benefits that we haven’t used (yet?)
- Global Entry or TSA Pre Fee Credit – $100 credit for enrollment in these programs (a must for US residents, imho)
- Auto Rental Collision Damage Waiver – Primary car rental insurance (nice!)
- 1.5x Travel Rewards – 1.5¢ per point when booking travel through the Chase travel portal
- More – numerous and various
See more details on card benefits for this and other travel rewards cards on CardRatings.com (affiliate link.)
Crunching the Numbers – Card ROI
There are two forms of monetary benefits, real dollars and points. Let’s look at both
Dollar$
Annual Fee: -$450
The first billing cycle came with a charge of $450 for the annual fee. (Fee is now $550.)
Travel Credit: +$600
The $300 annual travel credit directly reimburses for travel related expenses per year. When we signed up for the card Chase had a weird policy where the reimbursement period was based on the calendar year (Jan – Dec) versus cardmember year. This means we were reimbursed $300 for flights/hotels/Uber in Oct & Nov 2016, and then double dipped for another $300 in Jan+.
Lounge Access: +£30 (~$40) plus $10+ in beverages we would have otherwise paid for
I would probably never pay for access to airport lounges, so the impact to the bottom line is zero, but with this card access is free… so, why not? (Retail value, +/- $250.) We were able to enjoy a bit more comfortable seating and a beer / coffee / snacks in Taipei, Athens, Amsterdam, London, and San Francisco… maybe more?
But my favorite was London’s Gatwick airport, where the lounge was full. Apparently we had to make a reservation in advance. Instead, our bill at the restaurant across the hall was discounted £15/person.
Total monetary benefit: +$200
Points
Coming out ahead by $200 on the annual fee is nice, but where this card really shines is with points.
Sign up bonus: $1k cash -or- $1.5k direct travel booking -or- $2.2k+ via point transfers
As an early adopter we had the opportunity to earn 100,000 points by spending $4k in the first 3 months. Mission accomplished. 100k points could be converted directly to $1,000 in cash or $1,500 in travel purchases, or transferred to partners for even higher ROI.
Earning: $1.2k+ cash… -or-… $1.8k direct travel booking -or- $2.6k+ via point transfers
According to the Ultimate Rewards portal, we have earned 121,594 points this year. In terms of efficiency, a full 88% of total spending ($44,201) was in 3 PTS/$1 earning categories of Travel and Dining. Not bad. A healthy percentage of the 1 PT/$1 spending was on estimated tax payments as part of meeting the minimum spend requirement.
Point transfers: ~$3k actual savings
We transferred UR points twice to book International flights.
- Transferred 10,000 UR points to British Airways, as part of saving $19,000 on Business Class airfare to Paris.
(UR portion saved ~$1,000, 10.8¢/point!) - Transferred 70,000 UR points to United for 2 economy flights from SFO to Tokyo Haneda on ANA
(Total savings ~$2,000, 2.86¢/point.)
Despite the use of 80k points to date, we still have a few extra points to spend on future travel (We’ve combined all UR points into this one account.)
Future Card ROI
Clearly this card has had tremendous ROI to date, with $4.4k+ earnings in the first year. Will it continue to earn its keep?
With no signup bonus for continued usage, future ROI will be lower. However, the signup bonus accounts for less than 25% of the value we reaped this year.
We will only get one annual $300 travel credit going forward, which means we would need to earn enough points through purchases to offset our actual outlay of $150 ($450 – $300 travel credit.) Since most of our actual cost of living is in the heavy earning Travel and Dining categories, this is fairly easy. With potential of 2.2¢+ per point in travel value, we only need to use the card for $2,275 worth of travel / dining expenses.
Were our travel / dinging spending to come down in the future, I would probably downgrade to the Chase Sapphire Preferred card. The Sapphire Preferred card earns 2 points/$1 on travel / dining, but comes with a lower annual fee ($95, but also a new 60k point signup bonus.) But with the great transfer partners, we will always have at least one of these two cards.
Overall the Chase Sapphire Reserve looks like a keeper, and will enjoy a busy spot in our wallet (& Apple Pay wallet) for another year.
Compare these cards with other great travel rewards cards.
Did you get great ROI with the Sapphire Reserve?
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That is a good return especially your BA transfer. I will get this soon as I will finally be under 5/24.
Using points to travel is the best.
I too was over 5/24, otherwise we would have had 2 of these babies
Hey there GCC. I just got the Reserve and am excited to start using. I think I’m in a similar situation to you as the calendar year is almost over. Do you think I have $300 travel credit for the next 2 months?
No, the travel credit has been changed to cardmember year instead of the old calendar year. You’ll get $300 in travel credit over the 12 months since you opened the account.
Ahh too bad! Was reading your other article about credit score not mattering and my wife and I are going to start getting other cards to play the points game. She just got the Companion Pass Southwest offer, woohoo! Was curious how long you think we should hold each card after it has served its purpose (free points, etc.) , or does it not matter?
I keep cards as long as they have value (some forever), and typically a year minimum.
I’ve been 5/24 for a while but still got the card. When you get the preliminary denial, call them up and explain that you’d be happy to transfer credit from one of your existing cards. Worked for me at least 3 times. Thanks.
One potential hidden gem of ROI for this card is the lounge access. Although I agree I would not pay otherwise for lounge access, having it saves me $ I might otherwise spend for food and beverages while travelling.
On top of that, since I travel for work (I am still in the accumulation phase) and my company pays a per diem for meals, I can use the lounge access for free food and pocket that per diem payment on flight days. In PDX which is my home airport, the access allows $28 credit at a couple great airport cafes, which is enough for me to stash a full day’s worth of packaged sandwiches and salads into my carry on. Net ROI is usually $70-$150 per trip depending on the per diem for the destination. Pays the rest of the annual fee and then some! :)
Peg, did the same thing when I was working and traveling every week. Work got so boring that making extra bucks on the travel, as well as receiving perks like plane upgrades, free hotel food and the like that I could then collect per diem against, were about all I was looking forward to.
per diem is a nice perk. I love this.
The double dip on the $300 credit is a great tip for making this card worthwhile. However I want to challenge your math on future year ROI to make up that other $150 in annual fees. You can get other cards that will pay you ~1-1.25% with no annual fee. So to really get your ROI you need to subtract that from what this card gives you and THEN come up with $150 in rewards.
The double dip is no longer possible.
Yes, that is the right comparison. There are cards that can earn you 2% cash back, so we are looking at the delta between 6.6% and 2% to yield $150.
Congratulations on the return on your Reserve account; impressive numbers indeed. Since I am not traveling for work every week as I did before retiring, I went with the Preferred card myself. Quickly accumulated the 50K points with no annual fee in the first year, and will cancel it before the next year. I have too many other cards that pay me as much or more in cash for my purchases with no annual fees, so the Chase card is not necessary. But you did galvanize me into doing some card hacking this year, so I thank you, my friend.
I’ve always been impressed by travel hackers. I’ve just never had the patience to figure it all out. I know there is a lot of information out there (perhaps too much), and I’d like to think that I could work through it, but so far it is just too much work. Until then, I’ll just keep being amazed at folks like you that have it all worked out.
People go a little nuts trying to optimize and get the most of rewards cards. It isn’t necessary. You can still get a few free flights picking one good card and then charging everything on it.
Travel miles 101 has a great free course that you read an email or vid per day .. Maybe 15 min per day
Has saved us 10k
Wow, you guys did great with this card! We’ve only been testing the waters of the travel hacking game in our early retirement. Thanks for being a great inspiration to keep trying to improve our travel hacking!
I can vouch (somewhat unfortunately) for placing value behind the auto rental CDW on this card. When we returned a rental car last summer after a week in Ireland, the company noticed some minor damage to one of the tires. It took me a couple of hours of paperwork gathering and follow ups, but in the end it saved me ~$150. Glad you mentioned needing a reservation at the Gatwick lounge. I’ll have to look into this since I’ll be there next week!
Don’t forget that you can transfer points from Chase Freedom (5% back on rotating categories) and Chase Freedom Unlimited (1.5% on everything) to your Reserve and get the 50% bonus when redeeming for travel (effective 7.5% and
2.25%.) Downgrading to Preferred would reduce that bonus, as UR redemptions for Preferred are at 1.25X not 1.5X.
The 2 Freedom cards are good earners for US residents. We maxed out the 5% dining out category for Q3
You get so many good deals with Credit Cards, it makes me think I should do some research on what is available on the far side of the planet … I wonder if there is stuff available outside of the USA and Canada …. Michael CPO
I just saw that they cancelled the double dip, but is that for new members or everyone? I got mine last April and that was still in place. I don’t know when it changed. I thought I would qualify again for January billing, but now it would be April? Was a notice of change already sent to card members?
For everyone.
Do you use just one Reserve card as a couple? We’re interested in the Reserve but to add an additional card pushes the annual fee up to $525, without any discernible additional benefits. If we can’t both carry the card, I don’t know how we’d make the most of our point accumulation. We got the Preferred about a month before they started the Reserve and so far it seems like a good alternative.
We just use the one card (we are together most of the time when we are dining out or traveling.) We also have the same card on both of our iPhones (Apple Pay.)
This does have one limitation. Ideally the card with primary car rental insurance would be in my name (Winnie has never had a license.)
GCC
I have to disagree with your rationale on keeping this card, it would be much smarter to have your wife apply for this card and then if she gets it, you should cancel yours.
This way you get the sign up bonus again and still use it for all the 3x categories that you use it for now. I know you point out the limitation of not having the car rental insurance,but you also state that you never use it.
Agreed, it is always better to get another sign up bonus. Alas, I am ineligible to get this card due to 5/24 (this current card is Winnie’s.)
Ah. the dreaded 5/24 rule, it’s getting harder to keep up with all the rules. This year I’m only opening biz cards since they don’t count against it, ( well at least the vast majority don’t) and then next year I fall under again and Chase will be getting a lot of my business!