If I asked you “Would you apply for a credit card with a $450 annual fee?” most of you would look at me as if I just asked you to give me your firstborn child, which is a bit ironic because I truly do not want any more children. “Who pays that much for a credit card?” you might ask. If I rephrased the question, however, as “Would you pay $450 to get back $2100 in flexible travel?” you’d hopefully jump at the chance. This week, a new card from Chase has made that possible.
I got into this hobby in 2013, and I have applied for over 20 cards in that time. I have been genuinely excited by many of them, either because of their lucrative signup bonuses or for their ongoing benefits. This week, however, Chase is launching a card that I can honestly and with no trace of hyperbole say is the single most exciting credit card offer I have ever seen. Think of what an iPhone launch is to the mobile device community. That’s what the new Chase Sapphire Reserve is to our community, only I believe the excitement is even greater because two years from now there will not be a 7S version of this card. This is as good as this card will ever be because the signup bonus is through the roof.
Yes, this card comes with an annual fee of $450, but it’s a piece of cake to get the $2100 in value I described, and you can do it in less than a year.
Here are the details on the card:
- 100,000 Ultimate Reward points after spending $4000 in 3 months (100,000 points is worth $1000 in cash, $1500 in easily booked travel, or several thousand dollars if transferred to an airline partner and used for international business class flights)
- 3x points on all dining and travel purchases
- $300 annual travel credit, good for any travel expenses (air, hotel, rental car, transit) incurred
- 1.5 cents per dollar on redemptions made through Chase’s travel portal (this is huge, guys)
- Same transfer partner options as Sapphire Preferred (Hyatt, United, Southwest, Marriott, etc.)
- Priority Pass Select membership (lounge access to over 900 lounges worldwide)
- $100 Global Entry reimbursement (this also gets you TSA Precheck) every four years (Global Entry membership is good for five years)
- Primary rental car insurance, excellent trip cancellation and interruption insurance
- $450 annual fee ($75 for additional authorized user)
I know you want to know where I am getting the $2100 in value, so let’s take care of that first.
- Since this card gives 1.5 cents per dollar on travel booked through Chase’s travel portal (easy to use and great flexibility), 100,000 points = $1500 just from the sign up bonus. If you transfer those points to United, however, you can potentially book an international business class flight that is worth much more.
- Since the $300 travel credit is on an annual basis, you can apply for the card now, earn the $300 credit in late 2016 (but best to do it before December to be safe), and then earn the $300 credit again early in 2017 before your annual fee comes round again. Note: “earn” means buying $300 in travel, so the 2016 credit could be for 2017 travel as long as you pay in 2016. You can even buy airline gift cards direct from an airline if you don’t have immediate travel plans.
Wow, that was easy, huh? $1500 + $300 + $300.
Now, let’s take a second to look at the other aspects of the card that have so many of us ready to pounce on it.
- I can’t express how amazing the flexibility of the $300 travel credit is. The two most similar cards on the market (Citi Prestige and AMEX Platinum) also come with $450 annual fees and both have annual travel credits, but check this out: the Citi Prestige offers a $250 credit for airfare only, so it’s less value AND less flexibility. The AMEX platinum offers $200 back for air-related expenses only (not including actual airfare), and only on your one chosen airline (note: in fairness, the AMEX Platinum does offer access to many more domestic lounges than does the Sapphire Reserve) . The Sapphire Reserve is going to give you back a whopping $300 on ANY kind of travel. This is a paradigm shift, folks. It effectively lowers the annual fee to $150, assuming you spend at least $300 on travel each year (even taxis and Uber count as travel).
- 1.5 cents per point on redemptions through the Chase travel portal. The venerable Sapphire Preferred only offers 1.25 cents per point, and that is still a very good value. If the increase from 1.25 to 1.5 cents per point doesn’t sound like much of a difference, then try this. Your 100,000 signup bonus points are worth $1500 with the Reserve. They would have only been worth $1250 with the Preferred. One more subtle point: this raises the value of ALL of your Chase points, including those earned with the Freedom, Freedom Unlimited, and Ink. They are all worth 1.5 cents per dollar if you transfer their points to the Sapphire Reserve.
- 3x points on travel and dining. The Sapphire Preferred has always offered 2x points on travel and dining, so this is 50% more. If you spend $5000 per year in these categories, that’s an extra 5000 points, which are worth $75 through the Chase travel portal.
Now, if you need to know more about Chase Ultimate Rewards, here is an overview of them. In short, many cards (Freedom, Freedom Unlimited, Sapphire Preferred, Ink Plus) earn them, each card has different earning rates for different categories, and the Ink Plus, Sapphire Preferred, and Sapphire Reserve allow you to transfer your points to partners (particularly United and Hyatt) for potentially more lucrative redemptions. The new Sapphire Reserve card will earn the same points and will also allow for transfers to partners, but it will make all of your points more valuable if redeemed through Chase’s travel portal (1.5 cents per dollar rather than the old 1.25 cents per dollar).
So, do I think you should get the Chase Sapphire Reserve? Well, if you pay your credit card bills in full each month, have a 750+ credit score, and you have not applied for 5 or more cards in the last 24 months, then you should absolutely go for it. This is the best offer I have seen on any card in years. Worst case scenario? You don’t get it. If that happens, call Chase (888-245-0625) and plead your case. Second worst case? You get the card, you use the 100,000 points for $1000 cash back instead of $1500 in travel, and you don’t leverage the two $300 travel credits. In that case, you pay $450, get back $1000 and pocket $550. That’s leaving hundreds of travel dollars on the table, but you could do it and make a nice profit.
The more interesting question is whether you should keep it beyond year 1. Fortunately, the first year benefits are so generous that you can think about it for a year before making the decision. Personally? I plan to get this card and never give it up. That $450 fee is ridiculously easy to scale down. If I simply take advantage of the $300 credit each year, the annual fee is effectively $150. I already pay $95 for the Sapphire Preferred (which I will downgrade once I get the Reserve), and the remaining $55 difference is easily made up with my travel and dining spending (remember the extra point per dollar). If you end year 1 and decide you don’t want the card, you have lots of other cards to which you can downgrade (Freedom, Freedom Unlimited, and Slate). If you decide to keep it, smart move. You will also have a card with incredible travel protection and purchase protection.
No kidding folks, this card is going to send shock waves through the points/miles world. I don’t know how long the 100,000 bonus will be around, but I doubt it will be for more than a few months.
So, what do you think? Is this card really all that? Tell us in the comments section!
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