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Chase recently made changes to their premium travel credit card, the Chase Sapphire Reserve. As I highlighted here in this post, the key highlight here is that the annual fee is going up by $100. They also blocked people from upgrading to the reserve until Jan 12. It’s pretty clear that they wanted people who are looking to upgrade to pay the extra $100 in annual fees.
Chase Sapphire Reserve Card decision making
Whenever a bank makes changes to a credit card, there are always winners and losers. After these changes kick in, should you keep, cancel or downgrade the card? If you’re wondering what your strategy should be with the Sapphire Reserve, then here’s a handy guide to help you out in your decision making.
Keep the Card
Let’s start by having a look at how these benefits may be really lucrative and useful for certain customers.
You live in a big city and don’t drive
If you live in a big city like NYC or SFO, there’s a high likelihood that you take public transit to work or use ride sharing services. Also, parking may also be insanely expensive. In such a case, the Chase Sapphire Reserve card works perfectly for you with these new changes. Also, the Lyft Pink membership is valuable with its benefits for frequent riders.
- 15% off rides (no cap)
- Priority Airport Pickups
- Waived cancellation fees 3 times/month when you rebook within 15 minutes
- Targeted offers
- Waived Lost & Found Fees
- 3 complimentary 30 minute bike or scooter rides per month
In addition to all these benefits, you’ll also earn 10x Ultimate Rewards points per dollar spent on Lyft rides.
You Order in instead of Dining Out
I’m a big fan of dining out. I love trying out new restaurants and experiencing new cuisines. I feel that the ambience and the social aspect of dining is something that I truly enjoy. However, if you prefer ordering in instead of dining out, then the DoorDash benefits could really help you out.
You’ll earn the standard 3x Ultimate Rewards points per dollar spent even with DoorDash as it belongs to the dining bonus category. You’ll earn $60 statement credits with DoorDash in 2020 and another $60 in 2021. We still don’t know yet whether Chase will continue the benefit in 2022.
You redeem points primarily with Chase’s travel portal
If you redeem points frequently with Chase’s travel portal, then the flat redemption option would really be helpful. You get a flat 1.5 cents per point redemption value when you book through Chases’ travel portal. If you use this option instead of transferring points to Chase’s airline and hotel partners, then the redemption value would mean that you should keep the Sapphire Reserve in the long run.
Your primary/home airport has a restaurant that’s affiliated with Priority Pass
With the Sapphire Reserve, you still have access to using the restaurant benefit for airport restaurants that accept Priority Pass. If your home airport or an airport you frequent lets you use this benefit, then you could save some money on meals at the airport.
Cancel the Card
The new benefits may not suit everyone. In such case, it may be more prudent for you to cancel the card and go for another premium card. For which customers would it make sense to cancel the card? In this post, I highlighted how I don’t find these changes useful.
You drive your own car
If you live in a city where driving is pretty convenient and you drive everyday to work, you’re less likely to find the ride sharing benefits of much use.
Lyft/DoorDash don’t serve your area
If you live in a city or town which is not served by DoorDash or Lyft, then it makes little sense to keep that card as you’ll really have to go out of your way to use the $60 credit or the Lyft Pink benefit.
You’re loyal to Uber or PostMates/UberEats/Grubhub
If you primarily do business with any of Lyft’s or DoorDash’s competitors and love it, you’ll be less likely to switch your loyalty.
You rent cars while on the road
I tend to do this quite often, both domestically and internationally. Whenever possible, I love to explore a new city or country by renting a car and driving on my own. If you rent cars frequently, then the Lyft benefit may not be of much use for you.
You are an Expat
I downgraded my Amex Platinum as the Uber credit doesn’t work for rides outside the US. If you spend a majority of your time outside the US traveling internationally, reside abroad and only make occasional trips to the US, then these benefits may not be the best fit for you.
Downgrade the Card
In which situations would it make sense for you to simply downgrade?
Ultimate Rewards Points Transferability
If you simply want to keep your points transfers active, you can make use of downgrading the card. Since the Chase Sapphire Reserve is a personal credit card, you can downgrade the card to the Chase Sapphire Preferred and keep your points transferability active. Conversely, if you downgrade to any of the cards from the Chase Freedom family, your points will still remain active. However, you’ll only be able to redeem them for cash back at a 1% rate and will not be able to transfer them out to Chase’s Airline and Hotel partners.
You have another premium card with similar benefits
If you have another premium card, then the additional benefits with the Sapphire Reserve may not be as useful for you. For example, if you already have Priority Pass with the Amex Platinum Card or the Hilton Aspire Card, then having another Priority Pass with the Sapphire Reserve won’t really help you, unless you exclusively want to use it for redeeming at restaurants at certain airports.
I don’t find the new benefits on the Chase Sapphire Reserve very useful for my situation. I dine out frequently and rent cars instead of using ride sharing services. I downgraded my card to the Chase Sapphire Preferred. I still earn 3x Ultimate Rewards points on travel thanks to the Chase Ink Preferred and get 4x Membership Rewards points on all dining with the Amex Gold. Since I transfer points frequently to Ultimate Rewards partners, losing the 1.5 cents per point redemption isn’t that big a hit for me.
The Pundit’s Mantra
The premium travel credit card market is maturing. The premium cards offered by each bank are starting to look increasingly similar. As any market matures, you’ll observe that the participants often struggle to clearly define a clear value proposition. Looking at some of the credits and the bonus categories, it seems like competing banks are clearly looking for you to choose one over the other by offering similar products. Chase’s recent changes are a clear response to Amex’s changes to their Platinum Card.
Which premium card(s) do you currently have? What’s your strategy now that the Sapphire Reserve will have the $550 annual fee? Will you keep, cancel or downgrade? Let us know in the comments section.