Chase Sapphire Reserve - to keep or downgrade?

I’m reaching my Chase Sapphire Reserve one year anniversary and wondering if it is worth paying $450 ($150 after travel credit) annual fee. I do not have any use of other credits.
What do other people in the same boat are doing and how are they justifying paying the annual fee?
Thanks for reading.

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If the other benefits don’t interest you, it might be difficult to justify. 3% on travel and dining is nice, but can be done with other cards. Remember that Chase points are actually worth 1.5 cents each if you book travel through Chase or transfer.

If you don’t already have Global Entry, get it and that will justify much of the $150, and that’s good for five years (Global Entry gets you TSA Pre also).

Their travel insurance is a nice perq, as is the Priority Pass lounge. But both these assume you travel.

If you and/or a spouse have Chase Freedom cards, those can be converted to the higher value Chase Sapphire Reserve points if you have this card.

I just re-upped mine, but confess it was a close call on justifying it.

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Downgrade after you get your $300 to a csp

I think we had a thread about this on FWF (the CSR thread) with all kinds of justifications.

I have and earn a bunch of UR points (most organically) just from the 3x & 5x categories on Freedom, Ink, and CSR. The best value for me is 1.5c/p and up via either airline point transfers or travel portal. These require a premium card, and in my case justify at least the $95 AF for CSP. All the other benefits of CSR easily justify the $55 incremental annual cost:

  • Global Entry is worth $20/yr
  • 3x UR on travel and dining > 2x UR or 3% CB
  • some of the purchase protection benefits are better than on most other cards (higher limits and longer terms, except extended warranty)
  • better travel benefits, including primary rental car insurance and emergency evac and medical coverages
  • roadside assistance (I’d say it’s almost like AAA on paper, but I haven’t had to use it yet)
  • bringing a friend to eat and drink at the airport lounges is very nice. I actually keep track of the value I “extracted” by comparing how much I would have had to minimally spend on food. I almost always end up getting to the airport too early and hungry, so this helps. I’ve visited 3 lounges in the first year, always with someone. I’d never pay for it without the pass, but… free food!

As scripta pointed out already, whether you have/use/or earn other Chase points can figure into it.

First you have to establish a value for UR points. I go with 1.5cents. There are some higher options but I never redeem for less than that.

If you agree with 1.5cents/pt then…
Net fee is $450-$300travel credit- $13.50(UR generated from that $300 travel) = $136.50.

IF you are definitely keeping “a” chase premium card to allow rewards transfer, then the question is if $41.50 fee (compared to the other premium cards at $95 or $99) is worth it.

IF you don’t value any of the other reserve benefits at anything and are just looking at the base points, that means you want to generate $41.50 in travel or restaurants that you wouldn’t generate on the preferred. at an extra 1% UR restaurant/travel compared to Sapphire Preferred, that requires about $2760 spend in a year in these categories to break even, and afterwards you are generating a net benefit.

Now, about benefits you ONLY draw from the chase reserve card:

  • If you travel, WGA fares on Southwest are generally 1.5c/pt. You get that with any chase card that allows partner transfers. But, other airlines have insanely poor redemption value on most flights. I think Delta I priced out one last year and (estimates from memory) it was $150 or I could pay 25k points plus $125… With CSR, I paid 10000 points for that flight, booking through UR portal.
  • Chase Freedom quarterly bonuses (well this occurs from any Chase premium card, to some extent). 5xUR without a chase premium card can’t be transferred to rewards partners. Without Reserve, can’t be redeemed at 1.5c per on airlines other than Southwest. For example, I have 2 freedoms and usually hit $1500 spend limit on 2 quarters a year. (I’ll ignore the insane 10X promos they ran in 2017). For me, that’s 30000 UR points from the 2 freedoms. With no premium card, that’s $300. With a premium card, transferred to Southwest, that’s $450. With CSR, that’s $450 I can apply at many airlines and/or car rentals.
  • Priority Pass, if you travel. This gives lounges AND now some restaurants. For example, I was through DEN 6X last year, before a restaurant was added there. But now they have added a $28/person credit at a steakhouse in the airport. There’s even at least one airport with a credit that works on a non sit-down restaurant, where you can grab-and-go food/drinks (Portland ?).
  • Various insurance benefits. These are hard to value and also only apply with travel.

Additionally, there would have previously been an argument to swap back and forth between CSR and CSP indefinitely for the opening bonus.

But, they’re now all one “product family” with the same 24-month clock at chase, so that’s much less tenable or attractive.

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You may still be able to do something like this with a spouse/partner (take turns to get a new CSR every year or every other year). But I actually like the card and Chase has all the best bonuses on all kinds of products, so I wouldn’t rock the boat that much.

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Thanks for pointing that out. It does appear to be much like AAA basic coverage which I’ve been blindly renewing each year. Until I realized the last time I used any of their services was to get a TripTix map (remember those?) decades ago. Even though CSR covers only the cardholder in the car he or she owns, that is sufficient. AAA’s value proposition has been enormously eroded in these days of super reliable cars and GPS, yet they continue to raise prices.

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wow AAA only covers 7 miles tow? I thought it used to be something absurd like 100 miles and that’s why everyone claimed it was such a great deal. I guess you need that plus/premier for the 100/200 mi.

This is not true. See benefits guide:
"Who is covered?
You, the Cardholder is covered by Roadside Assistance when you
drive any vehicle you own or lease, and when you drive a vehicle that
is furnished to you by the owner, while traveling away from home."

You basically just need to be present at the vehicle. Your relative or friend could reasonably be letting you drive it.

AAA probably only covers registered vehicles which is much more restrictive, but I’m not going to go search for their terms.

Correct. The basic is only 3 miles and the lockout service is only up to $50. The membership benefits vary by state, but I just confirmed this for my region. I don’t see a 7 mile tow limit for CSR … just the $50 limit.

You are probably correct about the CSR coverage. It just wasn’t clear that it was talking about rental cars.

Not sure on rental cars either, would probably have to look in the rental cars section of the benefits guide. But the CSR wording clearly covers cars not owned by you (relatives) and even friends (if it’s reasonable they’d let you drive it).

Correct, the CSR coverage only mentions the $50 limit, once per 7 day period. However, in practice, I’m not sure how it works. I almost used it one time but did not need to as the problem went away on its own. You have to let them arrange the service from their “network” and get no cost estimate up-front, nor do you know who is providing the service until it’s ordered. I did get a “possible” nearby service provider before actually making the order. You only get the cost after it’s already ordered (and from my questions, it’s unusual to even get them to provide you the cost estimate after ordering and before the service is provided, but I was told that they could call me back with it). I also have no experience with AAA which I assume is similar (on not knowing where it will be ordered from).

Edit: the rental tow is clearly covered in the CDW section, with no $50 limit.
“Covered losses are:
• Reasonable and customary towing charges related to a covered
loss to take the vehicle to the nearest qualified repair facility.”

You can still get 100 miles if you pay a little more for the Plus or Premier membership.

Here’s one way to look at it:
You earn 3x points with CSR on travel and dining. If you assume that your best option other than this card is a straight 2% card*, and you value UR points at 1.5 cents per point, your break even point is $6,000 spent on travel and dining. Once you spend $6,000, every additional $1 will be an increase over a 2% card. This doesn’t factor in any of the other “benefits” of the card. Personally, I don’t factor these benefits in because I never would have considered buying them separately (assuming you already used the global entry benefit).

So if you plan on spending at least $6,000 on travel and dining, and you have no other way to get more than 2% on travel and dining, Keep the card. If you do have other options for earning points for travel and dining spend that are better than 2%, the break even calculation will be different.

*I assume everyone that knows anything about credit card points has at least one 2% card in their wallet.

EDIT: @Bend3r is correct in his post below. Using my 2% alternative assumption, the break even point is $5,760 worth of travel and dining spend which will cost you a net of $5,460 after using the $300 credit on that spend.

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Same line of thinking and that’s the estimated way to go about it. Technically it’s $5460 brakeven in a vacuum if you’re valuing the rewards on the $300 travel at 1.5cents.
Additional invested in the Chase ecosystem - or not - can be a much larger factor and has a value, although hard to specifically quantify. For example, you can’t even just “cash out” your remaining balance in UR from the CSR first year (150k points here, $2250. But I’ve got over 400k Chase points total though, even after spending over 100k points last year) at 1.5c at the end of the year, so you effectively lose .5 cents / pt on remaining value if you don’t spend it all and wait and cash out with no premium Chase card. You can always time this if you know you won’t travel for a while though, and get a new card when needed.

Imo a 2% straight Cash back card with no fee already in a wallet is NOT necessarily a given. The 2% cards have an opportunity cost that makes them not worth it for many. To get even $500 (a somewhat “average” opening spend bonus value) from a card that hypothetically has no bonus except an incremental extra .5% (vs existing card such as any Chase card for example), one would need to put $100,000 spend on the card…

Correct me if I am wrong, but the $300 travel credit doesn’t have anything to do with points or rewards, it’s just a $300 statement credit on $300 worth of travel expenses, so it shouldn’t effect the points break even calculation. Is that not correct?

Definitely a good thing to point out that you have to be traveling to get the 1.5 cents per point. After you’ve earned the 18,000 points from $6,000 in travel and dining spend, you do need to plan $270 worth of travel with a brand that will accept UR points in order to actually cash them out for that 1.5 cents per point value.

I assume 2% because I have to assume something, so I go with the highest cash back % out there without an annual fee that most people can get. My Citi Double Cash statement says I’ve been a member since 2012 and the card came out in 2014, so I must have product changed to it as not to waste a card inquiry and an opportunity at a $500 bonus. I suppose it might be a lot to assume we’ve all done that, but I have some sort of comparison baseline, right? So I figured 2% was a conservative break even comparison that many could relate to. And of course I qualified my break even and my assumption.

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The credit on the $300 does not cancel the 3UR/$ on that $300 travel. So if you’re factoring in the $300 travel already to effective fee, you’re also generating 900 UR with that “free” travel.

$300 charge = $300 -$300 + 900 points on the statement. The $300 “credit” benefit does not cancel out the 900 points earned with that spend. I’m details obsessed if I’m calculating things, it’s not a huge difference but it is almost 10% of the resulting “net fee” and 10% is not statistically insignificant. Not sure if I’m explaining what I mean clearly enough.

I was also meaning to express agreement with your 2% comparison. You should definitely compare with the best you have access to. Same page :slight_smile:. Incidentally, I planned to go the same route with double cash. However I have tried repeatedly over time and Citi never has yet allowed me to product change to it though. And they’re currently in the process of forced-changing two of my cards and transferring the third to Amex so… Really on the same page of thought with you. If you’re big into Chase and valuing at 1.5 cents like you said you did in your example, the freedom unlimited is also readily available and worth ~2.25% value on everything with no fee. I’d rather have more regular freedom in my wallet though for the effective 7.5% category spend. I’d have to spend insane amounts at a marginal extra .75% to cancel out the marginal 6% benefit (limited to $1500/card/relevant quarters).

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It took me a second to follow what you were trying to say, but now I get it. I wasn’t factoring in what is essentially 900 free points. Good catch.

That sucks they won’t product change you to Double Cash. I guess I got lucky doing it right around the time it was introduced. I would definitely use a Freedom Unlimited as my daily driver if I had a CSR. The main reason I’m still using Citi DC is because my wife and I don’t travel enough to justify a CSR. I got her a CSP last year for the 50,000 UR bonus and 1 yr waived fee as a push to make sure we take at least one big trip this year. We are definitely using our Freedom cards on the rotating categories to continue getting the 6.25% Here’s to hoping that we take more trips in the next few years. (we have a baby, so that’s what’s holding us back)

If you do plan to get an UR card in the future, you could always bank your Freedom points now, and then transfer to UR once you get the UR card.

It’s really cool that you can “promote” regular Chase points to UR even between household members.

Yup, that’s what we’re doing. Going to transfer our UR points from Chase Freedom into Chase Sapphire Preferred when we’re ready to book something.