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For the past several months, one of the hottest new cards on the market has been the Chase Sapphire Reserve℠ Card. The card has offered a sign-up bonus of 100,000 Ultimate Rewards points upon completing minimum spend, and in many ways has overshadowed the Chase Sapphire Preferred® Card, which I consider to be the all around best mid-range credit card in the market.
The online increased sign-up bonus on the Sapphire Reserve has finally been changed, so I figured I’d take a look at which card is better in light of that.
Comparing sign-up bonuses
The Sapphire Preferred is offering a sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months, plus an additional 5,000 Ultimate Rewards points when you add an authorized user to the card that makes a purchase within three months.
Meanwhile the Sapphire Reserve is offering a sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months, though there’s no additional bonus for adding an authorized user.
At least that’s the online sign-up bonus — at a Chase branch you can still receive a 100,000 point sign-up bonus through March 11, 2017, which you should seriously consider if you’re eligible. However, many people don’t live near a Chase branch, don’t want to go to one, etc.
So if applying online, the Sapphire Preferred sign-up bonus is better, while in-branch the Sapphire Reserve bonus is better.
Use the points you earn with your sign-up bonus towards a Korean Air first class award
Comparing annual fees
The Sapphire Preferred has a $95 annual fee, though it’s waived for the first year. There’s no fee to add additional cardmembers, however.
Meanwhile the Sapphire Reserve has a $450 annual fee, which isn’t waived the first year. Furthermore, there’s a $75 fee to add an authorized user. However, there’s a reason the annual fee is higher, so I wouldn’t judge the card too much based on the annual fee alone.
Comparing return on spend
The Sapphire Preferred offers double points on dining and travel, with no caps.
Meanwhile the Sapphire Reserve offers triple points on dining and travel, with no caps.
Personally I value Ultimate Rewards points at ~1.7 cents each. This means:
- The return on the Preferred and Reserve is identical for non-bonused spend
- The return on the Reserve is ~1.7% better than on the Preferred for dining and travel
Put another way, for every $1,000 you spend on dining and travel with the Reserve, you’re getting a return of an additional $17. Everyone can crunch the numbers for themselves based on that, in terms of the value they’re getting from the card.
This is where the Sapphire Reserve shines. The card comes with:
- A Priority Pass membership with guesting privileges
- A $300 annual travel credit, where any travel purchases will automatically be reimbursed, up to the $300 limit
- A Global Entry or TSA Pre-Check credit that covers the $100 enrollment fee
- When you have this card, Ultimate Rewards points can be redeemed for 1.5 cents each towards a travel purchase, rather than the 1.25 cents each they can be redeemed for if you only have the Sapphire Preferred
Everyone will value the above perks differently:
- Some may not incrementally value the Priority Pass or Global Entry credits, since they already may have them through the Citi Prestige® Card, The Business Platinum® Card from American Express OPEN, etc.
- The $300 travel credit is more or less worth the face value, in my opinion, since the credit is automatic and applies towards airline tickets, hotel stays, Uber, parking fees, etc.; to me that lowers the real out of pocket on the Sapphire Reserve to ~$150 per year
- Some will value the ability to redeem Ultimate Rewards points for ~1.5 cents each, though personally I’d rather convert those points to Korean Air SkyPass, Hyatt Gold Passport, etc.
Comparing travel protection
I’ve written a post in the past comparing travel protection across various credit cards. Both the Sapphire Preferred and Sapphire Reserve offer excellent travel protection, though the protection offered on the Reserve is a bit better. For example, on the Reserve, many benefits kick in after just six hours of travel interruptions, while on the Preferred many kick in after 12 hours.
Both of these are compelling cards — in my opinion the Sapphire Preferred is the most compelling mid-range card, while the Sapphire Reserve is the most compelling premium card. The 100,000 point sign-up bonus made the Reserve an absolute no brainer (and it’s still available in-branch, if you’re willing to go there). There’s a ton of value to be had with the card and I think it makes sense even for a lot of people who wouldn’t otherwise consider a $450 per year card. However, I wouldn’t unequivocally recommend it above the Sapphire Preferred, as I did before.
You have to decide for yourself:
- How much you value the Global Entry credit and Priority Pass membership
- The ability to redeem points for 1.5 cents each towards the cost of a travel purchase
- How much you’d otherwise spend on dining and travel, and what that incremental return is worth for you; for example, while the Reserve offers more points on airfare than the Preferred, in practice I’m putting all my airfare purchases on The Platinum Card® from American Express in order to earn 5x points, so it’s a moot point
Hopefully the above at least provides a decent framework for deciding what works best for you.