Review: Chase Sapphire Reserve – Is it worth the $450 annual fee?

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Review: Chase Sapphire Reserve – Is it worth the $450 annual fee?


Itching to travel in style? Whether you're planning a three-continent trek or simply travel frequently for work or play, the new Chase Sapphire Reserve℠ card may be the perfect travel companion for you.

But is it worth the substantial $450 annual fee? Let's take a deeper dive to find out.

What do you get with the Chase Sapphire Reserve℠ card?

Before determining whether the Chase Sapphire Reserve℠ is worth the annual fee, let's look at what the card has to offer:

  • 100,000 bonus points after you use the card to spend $4,000 in the first three months from account opening. If you redeem these points toward travel using Chase Ultimate Rewards®, they could be worth $1,500.
  • $300 annual travel credit for travel purchases such as airfare and hotels charged to your card.
  • Three points per dollar spent on travel and dining, and one point per dollar spent on all other purchases.
  • No foreign transaction fees.
  • Access to 900+ airport lounges worldwide.
  • Up to $100 application fee credit for Global Entry or TSA Pre✓®.

Tips and tricks for using the Chase Sapphire Reserve℠

Keep in mind that "travel" is a broad category.

The $300 annual travel credit reimburses you for anything coded as "travel." This means you're not just limited to flights and hotels -- it may also apply to other travel expenses such as bridge tolls and bus fares.

In other words, even if you're not planning a vacation, the Chase Sapphire Reserve℠ could still be a great card to have if you spend more than $300 on everyday travel each year.

Make your decision about the card soon.

The $300 annual travel credit is applied per calendar year, which means that if you get the card before the end of the year, you could get the $300 credit for 2016, and then another $300 credit at the beginning of 2017.

Take advantage of the Visa Infinite benefits.

The Chase Sapphire Reserve℠ is a Visa Infinite card. While some Visa Infinite perks, such as the $100 airfare discount, won't be included with the Chase Sapphire Reserve℠, Visa Infinite cards typically offer a variety of helpful benefits, including car rental discounts, primary rental car insurance and a concierge service.

Consider applying the $100 application fee credit toward Global Entry.

If you're debating whether to apply the $100 application fee credit toward Global Entry or TSA Pre✓®, you may want to consider going with Global Entry, as this program includes TSA Pre✓®.

TSA Pre✓® costs $85 for a 5-year membership; Global Entry costs $100 for a 5-year membership.

It's important to keep in mind that Global Entry requires you to have a passport. In addition, applying for both TSA Pre✓® and Global Entry will require an in-person appointment or interview and for you to pay the non-refundable application fee upfront.

Are the benefits worth the annual fee?

The Chase Sapphire Reserve℠ $450 annual fee is definitely on the higher end of rewards cards -- some of our favorite cards with annual fees charge $95 or less annually.

Unfortunately, we can't predict your spending habits, so we can't definitively tell you whether you'll get (and use) more than $450 worth of perks out of the card. But here are some questions that may help you decide.

Do you typically spend at least $1,333.33 each month?

In order to earn the signup bonus, you'll need to use the card to spend $4,000 within your first three months of card ownership (about $1,333.33 a month).

If you usually charge at least this much to your credit cards, you can earn back the $450 annual fee - and then some - with the 100,000 bonus points, which could be worth $1,500 if you redeem for travel using Chase Ultimate Rewards®.

If you don't typically spend this much, you may find yourself overspending just to get the bonus.

Do you typically spend at least $300 a year in travel?

Remember, the annual travel credit may apply to many forms of travel. So, for example, it may reimburse you for taking public transportation to work or catching a taxi to the airport.

According to the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics, the average consumer spent around $580 per year on public transportation in 2014.

So $300 may not be a lot to spend over the course of a year, even if you're not planning a vacation. If you're able to take full advantage of the travel credit, you'll only have to earn $150 worth of Ultimate Rewards® points to recoup the $450 annual fee.

How much do you typically charge to your credit cards each year?

Realistically, you probably won't be interested in this card unless you like to travel, so let's assume you'll use the $300 annual travel credit and you're planning to redeem your points for travel.

In this case, you'll need to spend between $3,333.33 and $10,000 each year to earn $150 in Ultimate Rewards® points, which would make up for the rest of the annual fee.

What should you watch out for?

Besides the hefty annual fee, here are some details about the Chase Sapphire Reserve℠ that you may want to watch out for:

  • You'll likely need excellent credit to qualify. Applying will likely result in a hard inquiry into your credit, which could lower your score, so you may not want to apply unless you think you'll be approved.
  • Your purchase APR could be higher than that of other cards. The Chase Sapphire Reserve℠ comes with a variable interest rate between 16.24 percent and 23.24 percent, which is higher than the current average credit card APR of 15.18 percent. You may only want to apply if you're confident you won't carry a balance, as interest could cost you more than the rewards you'd receive.

Chase Sapphire Reserve℠ vs. other luxury cards

The Chase Sapphire Reserve℠ has a few competitors that could give it a run for its money.

The Platinum Card® from American Express

Similar to the Chase Sapphire Reserve℠, The Platinum Card® comes with a $450 annual fee and a wide array of travel benefits, including 40,000 Membership Rewards® points after you use the card to spend $3,000 in the first three months, access to airport lounges, an annual $200 airline fee credit and fee credit for Global Entry or TSA Pre✓®.

The Platinum Card® might be better for you if you consistently stay at Hilton hotels and resorts, as it gets you Hilton HHonors™ Gold Status, which allows you to earn reward stays faster.

Also, the threshold for earning the signup bonus is lower -- $3,000 versus $4,000 for Chase Sapphire Reserve℠.

However, some of the main offerings aren't as great. You'll only earn one point per dollar spent with The Platinum Card® (aside from flights booked directly with airlines or with American Express Travel, which earn five points per dollar), and the signup bonus is only worth up to $400 (compared to up to $1,500 with Chase Sapphire Reserve℠).

In addition, the airline credit is lower in value and may be less flexible than Chase's annual travel credit-- it's only applied to incidental fees (such as in-flight refreshments, checked bags and flight-change fees) charged by one qualifying airline you select.

Citi Prestige® Card

The Citi Prestige® Card also comes with a $450 annual fee.

Like the Chase Sapphire Reserve℠, it targets travelers by offering 40,000 bonus points after you make $4,000 in purchases within the first three months of account opening, a $250 air travel credit, access to airport lounges and more.

One unique perk Citi Prestige® offers is a complimentary night at any hotel of your choice if you use its concierge service to book at least four consecutive nights. In addition, cardholders get exclusive discounts on a selection of luxury tours and vacation packages.

However, the signup bonus is only worth $400 in gift cards or $532 in airfare, which pales in comparison to the Chase Sapphire Reserve℠ signup bonus, which could be worth up to $1,500.

In addition, the $250 travel credit is $50 less than the $300 offered by Chase Sapphire Reserve℠, and it's only applied to flight-related expenses.

Bottom line

The Chase Sapphire Reserve℠ could be a great card for you if you're a frequent traveler -- especially if you're already a Chase cardholder, as Chase allows you to transfer points from one card to another. Keep in mind, though, that if you decide to "upgrade" a Chase card you already own, such as the Chase Sapphire Preferred® Card, you may not be able to earn the Chase Sapphire Reserve℠ signup bonus.

While other cards with $450 annual fees offer a few perks that the Chase Sapphire Reserve℠ doesn't, many of its core offerings shine above the competition.

Before applying, review the terms and conditions, check your credit, and carefully consider whether you're likely to get more than $450 worth of benefits out of the card.

About the Author: Jenna Lee is Credit Karma's Copy Editor. Although her specialty lies in creating witty post-it notes, she also enjoys sharing all the financial information she's learned since joining Credit Karma in February 2012. When she's not working, you can probably find her trying out a new dessert recipe or learning/perfecting any musical instrument she can get her hands on. Say "hi" @leejennaa!

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All Comments

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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. When 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! Take a pen and a paper and do the Math and check if you could have CSR instead of CSP without spending even a $ more. Don't be scared by $450 annual fee thing. Of course needless to say that 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!! Makes sense? I hope so.

Good luck! Keep rocking!

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0 People Helped

dude what's your deal? why are you commenting on 18 different credit card sites with the exact same comment? you work for chase or something?

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