How Does The Chase Sapphire Reserve Impact Your Existing Ultimate Rewards Points?

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Yesterday online applications became available for the new Sapphire Reserve Card, which is offering an incredible 100,000 point sign-up bonus. That’s in addition to the long term value the card offers, like a $300 annual travel credit, plus triple points on dining and travel.

The card is a no brainer in every way, though for some people the only “catch” is that those who have opened more than five credit cards in the past 24 months aren’t generally eligible to be approved for the card (though they may be able to upgrade an existing card to the new Sapphire Reserve).

I’ve been getting a lot of questions about the points earned on the new Sapphire Reserve Card, so figured I’d go into a bit more detail on that.

What makes points earned on the Sapphire Reserve more valuable?

The Chase Sapphire Reserve Card earns Ultimate Rewards points, which can be transferred at a 1:1 ratio to the following 11 airline and hotel partners:

Aer Lingus Aer ClubIHG Rewards ClubSingapore KrisFlyerWorld Of Hyatt
Air France KLM Flying BlueKorean Air SkyPassSouthwest Airlines Rapid Rewards
British Airways Executive ClubMarriott RewardsUnited MileagePlus
Iberia PlusRitz-Carlton RewardsVirgin Atlantic Flying Club

So for the purposes of points transfers, the points earned on the Chase Sapphire Reserve and Chase Sapphire Preferred® Card are identical.

However, Ultimate Rewards points can also be redeemed towards the cost of a cash trip through the Ultimate Rewards website.

Points earned on the Chase Sapphire Preferred® Card can be redeemed for 1.25 cents each towards the cost of a trip, while points earned on the Chase Sapphire Reserve Card can be redeemed for 1.5 cents each towards the cost of a trip.

Sapphire-Reserve

Personally I’m someone who values transferrable points currencies for the purpose of airline or hotel points transfers, and not for redeeming them as cash towards the cost of a travel experience. However, 1.5 cents per point is approaching what I value those points at, so it’s a redemption option worth considering.

Can you redeem all your Ultimate Rewards points for 1.5 cents each?

As many of you are probably aware, points earned on the Chase Freedom® Card and Chase Freedom Unlimited® can be redeemed for one cent each, though can’t be transferred to Ultimate Rewards partners. The exception is if you have them in conjunction with a card that accrues Ultimate Rewards points, like the Chase Sapphire Preferred® Card or Ink Plus® Business Credit Card, in which case you can transfer those as well.

The good news is that all of those points, including points earned on the Chase Freedom® CardChase Freedom Unlimited®Chase Sapphire Preferred® CardInk Plus® Business Credit Card, and Ink Business Cash℠ Credit Card, can be transferred to your Chase Sapphire Reserve Card. That means all of those points can be redeemed for 1.5 cents each towards a travel purchase.

The new best combination of cards you could possibly have?

Ultimately we all want to maximize points, though ideally want to do so as simply as possible.

I think the new best combination of credit cards out there might just be the Chase Freedom Unlimited and Chase Sapphire Reserve Card. If you have both of those cards, you’ll be able to transfer the points from your Freedom to your Sapphire Reserve. Then you’ll earn:

  • 3x points on dining and travel (through the Sapphire Reserve)
  • 1.5x points on everyday purchases (through the Freedom Unlimited)

Each point can then be redeemed for 1.5 cents towards the cost of a travel purchase, meaning you’d be earning a 4.5% return on dining and travel purchases, and an incredible 2.25% return on everyday purchases. That’s a pretty great combination.

Keep in mind you can potentially get even more value by transferring those points to airline or hotel partners, like Korean Air SkyPass.

Korean-Air-777

I value Ultimate Rewards points at ~1.7 cents each, so you can get even more value than the above.

Bottom line

The Sapphire Reserve can increase the value of your existing Chase points balance, as you’ll be able to transfer other points to this card. While it won’t get you more value if transferring points to an Ultimate Rewards transfer partner, it will get you more value if booking travel through the Ultimate Rewards website, which greatly increases the flexibility of your points.

It’s tough to beat the combination of the Chase Freedom and Chase Sapphire Reserve, to essentially earn the equivalent of a 2.25% return on everyday purchases, and 4.5% return on travel and dining purchases.

If you already have the Sapphire Preferred and get approved for the Sapphire Reserve, it could make sense to downgrade your Sapphire Preferred to a Freedom Unlimited, so you can really maximize the points you earn.

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Comments

  1. Based on your valuations, wouldn’t an Amex Everyday or SPG also compliment the CSR for everyday purchases?

  2. Eh, I’m sticking with my standard freedom card. Between Ink Plus, Freedom, and an Amex BCP, 75% of my purchases are earned at 5%+ . For me the major benefit on CSR will be for those few times I’m travelling and the times when I don’t have GC’s for restaurants and it’s not one of quarters where restaurants get me 5x UR.

  3. You say above: “As many of you are probably aware, points earned on the Chase Freedom® Card and Chase Freedom Unlimited® can be redeemed for one cent each, though can’t be transferred to Ultimate Rewards partners.” Does this mean if you get the CSR and downgrade the CSP to the Freedom card, you have to transfer your UR poinst from the CSP to the CSR before downgrading? Certainly before cancelling, right?

  4. @ pez — You can transfer them all to the Freedom Card if you want, and then later transfer them to the CSR. They’ll regain their value once transferred back.

  5. I don’t get it. The Freedom Unlimited link you provided says each point is worth 1.5 already without transferring. So where is the value of having the Sapphire with it?

  6. @ Ben — Absolutely, should have been clearer. My point was that if you’re looking to just accrue one points currency and have a simple strategy, this is tough to beat. For the more advanced consumer it can still make sense to have a lot more cards (as I do, for example).

  7. I’ve tried twice and was denied both times to downgrade to a Freedom Unlimited… only the normal Sapphire

  8. @ matt — To clarify, the Freedom Unlimited points can only be redeemed for 1.5 cents each, unless you have it in conjunction with an Ultimate Rewards card, in which case they can be transferred to airlines/hotels, or redeemed for 1.5 cents per point towards travel, for a total of 2.25 cents per point. So you’re getting 50% more value (at a minimum) by having the Freedom in conjunction with the Ink Plus, Sapphire Preferred, or Sapphire Reserve.

  9. @Lucky: Just out of curiosity, were you able to apply to this card? Were you under the 5/24 rule?

  10. I will do CSR and AMEX EDP to not put all my eggs in one basket moving forward. Will likely downgrade my CS to a Freedom Unlimited or a Freedom when the annual fee comes due.

  11. Where is Ink? That is important to get 5x on other places by buying giftcards at OD or other online ways. Pretty easy to get 5x on gas, many restaurants, and even amazon.

    For me, hope to be CSR, Freedom, Freedom unlimited, and Ink cash. Just need to juggle what goes to what. Sprinkle in other cards for signup bonuses / spending offers as needed.

  12. Lucky:

    I just earned a sign up bonus for the CSP and the Amex Platinum. What do you recommend I do with the Amex Platinum in order to preserve my MR Points without ruining my 13 year Amex relationship?

  13. Amex EDP + CSR will be the best combo. Dining, Transportation, Gas, Groceries capture all the major categories (1.5 after 30x so that matches Freedom Limited)

  14. @ Ben — Actually, if you are a Delta eite, the AMEX Delta Reserve cards provide the best return of any cards for spending in increments of $30,000. For every $30,000 you spend on whatever, you earn a minimum of 45,000 Delta SkyMiles and 15,000 Delta MQMs. At 1.3 cents per redeemable mile and 6 cents per qualifying mile, you are earning a minimum return of 4.95%. Best credit card for a Delta elite flyer. Period.

    Yes, the annual fee is $450 (no $300 travel rebate), but you do get a SkyClub membership and an annual domestic FIRST CLASS BOGO included.

  15. How do you come up with your own valuations, they seem ridiculously low to me. Anyone who flies in premium cabins, and that’s DEFINITELY you, Lucky, gets WAY more than 1.5-2 cents per point/mile generally. For example, I just booked a trip to Australia through AA in business class for 160,000 miles roundtrip. It was a $7,500 ticket otherwise. That means each of those miles was worth 4.7 cents. My AA credit card returns 1 mile per dollar spent, so I get a 4.7% return, and triple points on AA purchases, so a 14.1% return on those purchases. Earlier this year I booked an Etihad/Qatar business class flight for 135,000 miles which would have otherwise been $11,000, so those miles were worth 8 cents apiece.

    Why are you so significantly undervaluing what your miles are worth when at least in my case I am getting between 4.7-24% return on my credit card spending depending on how I redeem my miles?

  16. @ Ben — So, the best combo is AMEX Delta Reserve + Citi Prestige for the fourth night free on hotel stays. I would be fine with ONLY these two cards!

  17. Wouldn’t it also make sense to have the regular Freedom card for the quarterly categories? Yes, it means juggling an additional card, but it would look something like this:
    -CSR for travel/dining
    -Freedom for whatever quarterly category bonus is relevant to you
    -Freedom Unlimited for everything else

  18. This sunny…. Not long ago, the Citi Prestige or the CSP was the card that you were stupid to leave home without. Now it will be several more months of hearing the same thing about the new kid in town, the CSR, alone or in combination with another card. Then it will start over again, complete with abuse of superlatives, after the SPG AMEX (r.i.p) boosts their earning to 2 just starpoints/$. LOL 😉

  19. @RCB
    You should value the points that high only if you were actually going to buy business class. If you would have bought coach then the valuation is lower. Yes. You are getting lots of value out of the point but I treat that differently than the real life valuation of the point.

  20. @RCB — Lucky and many others have done a pretty sophisticated analysis of the value of points and, more specifically, how to value them. You should read all that. You may get a 4.7 percent return on your points, but that certainly doesn’t mean you value them at 4.7 cents. As yourself, what is the price at which I’m just as happy to have cash as I am to have points. If you truly value an AA mile at 4.7 cents, that means if someone offered to sell them to you for 4.5 cents per mile, you’d buy them in unlimited quantities, right? If you didn’t have the cash, you’d borrow it as long as the interest rate still made it so you paid less than 4.7 cents for them, right? Of course you wouldn’t. Because the cash is more valuable to you. The value of a point is exactly the point at which you’d be in equipoise as to whether someone gave you the point or cash. If you want to make rational decisions with respect to credit card points and miles, you’re just not thinking about it correctly and you should read some of what Lucky and others — especially frequentmiler — have to say about the issue.

    One interesting thing to consider when valuing the use of chase ultimate rewards (or citi TY points) for air travel versus transferring them to a mileage program is to remember that you earn miles when you fly, which also needs to be put in the calculus.

  21. @Larry, you are confusing points with hard cash, which isn’t invalid, but isn’t really accurate either. What you say is true, if points are a universal medium of exchange, but they aren’t. Points are a reward, and a currency towards a very specific category of purchase. If I value points at 4.7 cents apiece and I can buy them for 4.5 cents, as a universal medium of exchange (cash) then yes I would, because everyone would buy cash for less than face value, but this isn’t cash. This is a reward that leads to a means to an end, specifically airline travel. I collect miles to fly premium seats around the world. My miles redemptions return a value of 4.7-8 cents per mile this year. Lucky values those same points at 1.7-ish cents apiece. So, in his world, if you can get a credit card that gives you 2% cash back, you should absolutely take it. In my world, you are leaving A TON of money on the table. Of course, this is also partly because of my personal situation of 1) I don’t need the cashback to meet my financial needs and 2) I want to redeem for premium travel, so it doesn’t apply to all. However, it applies to A LOT of people who read these blogs, Lucky included, so isn’t that being factored in? Yes, this does not generally apply to economy tickets, but very few of us here are flying longhaul economy. I don’t disagree that Lucky and other bloggers have come up with pretty sophisticated methods to value their points, I just disagree with the answer that they have come up with. Ultimately I don’t care if they do that, and if others believe those valuations, I’m getting a great value out of my miles and others are free to make decisions based on whatever value they are lead to believe theirs are worth.

  22. @RCB — if you’re going to come up with a value at all, the value has to be in cash. If you’re on the verge of redeeming 100,000 miles for a $4,700 ticket, and I came up to you and offered you $4,500 for your 100,000 miles, and you would sell them to me at that price instead of redeeming your ticket, you simply cannot say that you “value” those miles as worth 4.7 cents per mile. You don’t. You can buy pretty much every mile currency out there in virtually unlimited amounts for 2.2 to 3.2 cents per mile. Are you maxing them out? Why not?

    It is absolutely true that anyone who values a mile or point at less than the best cash card he or she can get is leaving money on the table, and I believe Lucky has made that point repeatedly. A 2 percent cash back card is, in fact, better for almost anyone who is earning 1 AA mile per $1 spent on a credit card. But, of course, most of us are never earning just 1 mile per dollar. With Chase Freedom Unlimited, or Amex Everyday, most of us are earning at least 1.5 mile per $1, or better, on every dollar we spend. And, so, while I personally value Amex at about 1.7 cents per point — that being the price at which I would be equally happy for you to give me a point or the cash — I am still better off using my Everyday card than a 2 percent cash back card, because I get 1.5 points (worth 2.55 cents to me) on each dollar of spend.

    The bottom line is that there are tons of people out there on flyertalk and in comments deluding themselves into thinking that a 2 percent cashback card is not right for them, because they got tickets that retail for $12,000 by using their Singapore miles. Most of us are in this game to fly in premium cabins, but that doesn’t mean that the kind of value thinking you’re espousing is valid.

    Valuing points is crucial for a number of reasons — not just comparing against cashback but to make rational decisions about which cards to use, whether to keep paying annual fees, and the like. There needs to be a common currency against which to value points to decide whether it’s worth it to pay the annual fee for an SPG card, for example. We could use anything neutral, I suppose. We could say that 1 SPG point is worth .00028 giraffes and 1 Amex point is worth .00024 giraffes. Dollars is easier.

  23. I need a matrix for all of this for an apples-apples comparison.
    @Lucky – do you or anybody on your team have a matrix they would be willing to share?
    Anybody else, for that matter?

  24. Hi Guys! Please guide me on this. I have CSP, Chase Freedom, and Freedom unlimited cards. I though I have the best combination of these cards until CSR was released on Monday. I travel with my family once in a while (every year to every other year) and spend around 3500$ on air ticket when I travel. I spend close to $200/month on dining out every month otherwise . I have my wife as an authorized user on all my 3 chase cards. Given my spending pattern do you guys think that applying/upgrading for this card is worth?

    I am worried about these things

    1. I will not get $300 if I don’t spend that year
    2. $75 additional fees on authorized user

    Will the new benefits of CSR outweigh the costs of owning the card and adding my wife as an authorized user given my spending profile?

    Thanks to all in advance!

  25. @Larry, you are making some big assumptions to make your point correct. If I am going to exchange 100,000 miles for a $4,700 ticket but someone offers me $4,500 for them instead you assume I am going to take it, why? Yes, if I take the $4,500 then I do value my points at 4.5 cents each, but I haven’t and don’t plan to. And no, I don’t buy miles because I get all I need from spend and churn, but had no problem buying them the few times I needed to top off for an award because I know what a great value they represent. If I buy a mile for less than my valuation it doesn’t change my valuation, it just means I got a great deal on buying additional miles. These aren’t hypothetical trips I am comparing, I know the exact cost per mile of actual trips I booked (or money saved by redeeming miles, more accurately).

    I agree that there are LOTS of people who don’t understand that they need to just do cashback and be happy with it. They are the “I spend $500 a month on my credit card so I can never build up many miles” people, but they aren’t me and most of us miles collectors that follow this blog. I’m a $100,000+ credit card spender annually and fly tons. That $1,000-2,000 cashback doesn’t get you any decent premium seat anywhere longhaul.

  26. Lucky- I don’t normally spend $4k in 3 months on my credit card. Do you know if a card like this will count me paying rent during this period and it counting? Might be a silly question but just wanted to hear your thoughts to have an idea.

  27. @Drew: That’s been my strategy, with the CSP instead of CSR.

    Now… I do believe people need to really evaluate their spending habits when looking at the CSR. They very well might be better off with a CSP. I keep the cost of annual fees in mind when it comes to redemption.
    CSP: $95/year
    CSR: $150/year (backing out a $300/year in travel credits)
    $55 difference between the two.

    Assuming you’re getting the CSR solely for the 3% travel & dining (vs CSP’s 2%), $55 / 1% difference = $5,500 in travel & dining you’d have to spend to break even on the difference in annual fees between the two cards. For those of us who travel for work, $5,500 can go out the door quickly. For the majority of people who read these blogs, the answer is most likely not.

    Now, if you’re able to squeak out a Global Entry or two and use the Priority Pass, then that $5,500 spending difference goes away and the CSR makes full sense.

  28. @RCB: For most people, the Freedom Unlimited (1.5% back on everything) + Freedom (5% categories) combo OR Citi’s Double Cash (2% on everything) is probably their best bet.

    I travel ~250-300 nights a year and have a large amount of reimbursable expenses from work, so the higher end cards make sense. My fiancé does not, so she’s doing the Freedom Unlimited + Freedom 5% combo and using cash back websites (TopCashBack, eBates, Shop with Chase.) to squeeze out even more value.

  29. @AlexS, totally agree. I spend upwards of $75k/year on travel and dining (maybe even over $100k) since I lead a global sales consulting team. I already have Global Entry (which I got from an airline perk) and I’ve used my Platinum Amex and will now use this one to pay for Global Entry for a couple of my employees as a sort of “bonus” since I don’t need it for myself. I unfortunately wasn’t eligible for the 100k sign-up bonus due to the 5/24 rule, but I did a product change from CSP to CSR anyway because longer term it will be worth it to me to pick up the extra points, and it’s a viable alternative if I want to get rid of my Platinum card.

  30. @Alex In your calculations you are assuming that points are worth $.01 each. With the CSP you get minimum of $.0125 and $.015 with CSR just by booking travel through UR platform. Not counting transferring to other programs which is known to be more valuable. Better comparison is CSP every dollar of category spend is worth 2 points equal to 1.25 cents each or 2.5 cents per dollar spend. With CSR it’s 3 points equal to 1.5 cents each or 4.5 cents per dollar spend. So that is a difference of $.02 per dollar spent in categories, so it’s actually only $2750 of category spend. If you use the 1.7 as the value of all UR points, then you need about 3235 in spend. That’s assuming you don’t get any value out of the other perks.

  31. Confirmed you can transfer UR points from your CSP to CSR account. I received my Reserve card today (apparently they did complimentary overnight processing/shipping without requesting it) and I transferred all my points. It immediately showed the difference in value for the points when redeeming for travel. Excellent!

  32. Question: Since the 100k bonus points is only a one-time bonus, I could theoretically sign up for the card (acknowledging I would pay $450 for year 1) and cancel it in year 2 but still keep my points right? This is assuming that I have a freedom card ($0 annual fee) to which I transfer the 100k points and whatever else I earned for the 12 month period. Do the points lose any value when transferring to another card (or get charged a transfer fee in the form of point)?

  33. @AP Theoretically I could see how that would work, but I’d wait to cancel it until after you’ve already redeemed the travel credits for the second calendar year. The points themselves don’t lose value per se, but since you get 1.5x value when redeeming if you have the CSR, vs. 1x with the Freedom, you’d ostensibly be losing out on that value (for example, if you use those 100k points you’re getting a $1,500 value with the 1.5x redemption rate, vs. $1,000 value if you transfer to the Freedom, cancel the CSR and then redeem them).

  34. @Drew Thanks for the reply! My concern is that I may not be traveling enough to redeem all of my 100k points within a year of opening the card. However, as I understand it, I can redeem points for cash back as well correct? I know that’s not recommended since it’s 1 point to 1 cent conversion rate but I suppose if I absolutely don’t end up using the points and don’t want to pay another $450 annual fee I could go that route.

  35. I have partial deposit charges for travel like cruises & rental car on Sapphire Preferred. If I get the Reserve and now use Reserve to pay for the remaining balance due as I have downgrade my Preferred to Unlimited Freedom card. How will all the insurance and travel benefit like car collision insurance works? Which coverage will they be under and who would I file the claim with?

  36. i am really curious how you NOT spend $4k in three months! Maybe you should blog about it. Not to speak for Lucky, but if you can figure out how to put your rent on the card where it is not a cash advance, I say that would work!

  37. I have Cat’s question! Will someone be so kind to answer it?

    I have partial deposit charges for travel like cruises & rental car on a different card. I recently got approved for the Reserve (still waiting for the card) — planning to use the Reserve to pay for the remaining balances due.

    How will all the insurance and travel benefit like car collision insurance work? Which coverage will they be under and who would I file the claim with: the Reserve or none (other card doesn’t have travel benefits)?

    thanks in advance

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