This post is a little different than my traditional card reviews. I will be looking at two cards and comparing them to see which one is better for most people. The focus of this first comparison is the Chase Sapphire cards.
The Chase Sapphire Preferred (CSP) and Chase Sapphire Reserve (CSR) are Chase’s top two travel cards. Both cards are similar in nature, name, and earning structure. But there are differences between them too.
As with everything in point and miles, your mileage may vary. Someone might find the Reserve better for him while their best friend mind like the Preferred better.
Argument for the Reserve
Both cards earn bonus Ultimate Rewards (UR) points in the same categories: Dining and Travel. The difference is that the Preferred earns 2 points while the Reserve earns 3 points. Obviously, the Reserve wins on this front.
Travel purchases that count for bonus points include airfare, hotel stays, a car rental, and toll road fees. Dining purchases include restaurants, coffee shops, and bars.
Both Sapphire cards come with various travel insurances and perks to make life away from home easier. The Reserve has more lenient versions of the same benefits that the Preferred offers. For example, the Reserve’s baggage delay insurance kicks in after 6 hours of waiting. The Preferred’s version of this perk kicks in after 12 hours.
The Reserve also comes with perks that the Preferred does not. The Reserve’s signature perk is its pioneering $300 general travel credit. It also comes with a Pre-TSA / Global Entry fee credit and access to Priority Pass airport lounges.
You Use Chase’s Travel Portal
Both cards have the same redemption methods including travel partners. But one slight difference lies in Chase’s travel portal. Chase lets you redeem points through its portal at a flat rate. The Preferred’s rate is 1.25 cents per point (CPP) and the Reserve’s rate is a higher 1.5 CPP.
Those who don’t want to maximize rewards with transfer partners would be better off with the Reserve.
Break-Even Analysis for Pure Spending
The break-even point between the two cards is $2,750 at a valuation of 2 CPP. This means if you spend at least $2,750 per year in travel and dining, the Sapphire Reserve is the better card. If you spend less, go with the Preferred.
The math is as follows:
CSP = CSR
2x – 95 = 3x – 450 + 300
2x – 95 = 3x – 150
2x + 55 = 3x
55 = x
55 / $0.02 = $2,750
This break-even analysis assumes that you will use the entire $300 travel credit for the Reserve. It also assumes that UR points are worth 2 CPP. This is my own valuation; your mileage may vary. If you feel that 2 CPP is not the right valuation, you can recalculate the last line with your own valuation. All you have to do is replace with $0.02 with your valuation and solve.
Argument for the Preferred
Lower Minimum Credit Limit
The Preferred is a Visa Signature card with a minimum credit limit of $5,000. Conversely, the Reserve is a Visa Infinite card with a minimum limit of $10,000. $5,000 is a huge difference for many people, especially young adults with limited credit and/or income. Thus, the Sapphire Preferred is the easier card to get approved for.
One strategy to consider is getting the Preferred and keeping it for the first year. After that, upgrade it to the Reserve if it still makes sense.
You Already Have Another Premium Card
The Preferred might be the better card if you already have another premium card. This is because the Reserve’s benefits are redundant.
The Priority Pass lounge access and Pre-TSA / Global Entry credit already come with competing premium cards. Even if you use the $300 travel credit, paying an extra $55 for redundant benefits might not be worth it.
You Don’t Use Chase’s Travel Portal
The Preferred might be the better card if Chase’s travel portal is not useful for you. Paying an extra $55 (assuming you use the travel credit) doesn’t make sense for an extra bump in the multiplier.
Also, both cards have the same travel partners. Therefore, it doesn’t matter which one you use to transfer points. You will get the same value either way.
The Sapphire Preferred has an annual fee of $95 (waived the first year) while the Reserve has an annual fee of $450 (NOT waived the first year). Those who want to “test drive” a Sapphire card before paying should go for the Preferred. Also, if you don’t have $450 to pay upfront, you can avoid paying upfront by going for the Preferred.
Many people argue that the “net” annual fee for the Reserve is $150. This argument assumes that you will use the $300 travel credit in full each year. Most people who travel would use this credit, showing the legitimacy of this argument.
For $55 more, you’re getting a higher earning rate, better perks, and a higher multiplier for the travel portal. But $95 is less than $150, giving the Preferred a slight edge.
Point of Indifference: Sign-Up Bonus
Both cards have bonuses of 50,000 UR points that can be earned after spending $4,000 in the first 3 months. The Reserve would have won this category if it still had the famous 100,000-point bonus for the same minimum spend.
However, you can only get this bonus once. Chase has a rule called the One Sapphire Rule that prevents people from having more than one Sapphire card. This rule also prevents people from getting the above bonus more than once in a 48-month period. The One Sapphire Rule applies to both cards discussed in this post and the no annual fee Sapphire card.
The Chase Sapphire cards are great options for travelers of all kinds. But one card is better than the other for different people and situations.
The Sapphire Reserve is best for most people because of its earning structure, $300 travel credit, and perks. But I suggest the Sapphire Preferred for beginners, those who have another premium card, and those who don’t use Chase’s travel portal.