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For years the Chase Sapphire Preferred® Card has been one of the most popular rewards credit cards out there. The card is incredibly well rounded, as it offers double points on dining and travel, great travel protection, and the ability to transfer points to a bunch of valuable transfer partners.
However, there’s no denying that over the past several months the Chase Sapphire Reserve℠ Card has been stealing the spotlight, given that it was just introduced last August. The card is fantastically rewarding, as it offers triple points on dining and travel, a $300 annual travel credit, a Priority Pass membership, etc. The card has apparently outperformed Chase’s expectations by a long shot.
While most people lately seem to be signing up for the Sapphire Reserve, in this post I wanted to look at six reasons you might want to consider the Sapphire Preferred instead (again, I’m not suggesting one is better than the other, just encouraging some thought on the topic, given the recent popularity of the Sapphire Reserve):
You want to add authorized users
You can add authorized users to the Sapphire Preferred at no additional cost, and they’ll also earn double points on dining and travel, and get most of the other privileges you do as well. However, the cost to add an authorized user on the Sapphire Reserve is $75 each. Now, there are benefits to doing so, but if the goal is to just add an authorized user for spend purposes, it’ll take quite some annual spend per authorized user in the dining and travel category to make up the $75 per person authorized user fee difference.
You want to wait for a bigger sign-up bonus
Until recently we saw a sign-up bonus of up to 100,000 points on the Sapphire Reserve. Meanwhile the sign-up bonus on the Sapphire Preferred is 50,000 points upon completing minimum spend, plus 5,000 bonus points after you add an authorized user and they make a purchase within three months.
So the Sapphire Preferred actually has a better sign-up bonus at the moment when you factor in the 5,000 point authorized user benefit, and this is as good of a bonus as we’ve seen on the card. I could see the Sapphire Reserve eventually having a higher sign-up bonus again, given that it’s more common for premium cards to have bigger bonuses. Meanwhile I can’t imagine the Sapphire Preferred bonus will get bigger anytime soon.
You don’t want to pay a $450 annual fee
The Sapphire Reserve has a $450 annual fee, though a lot of benefits that offset it. The most basic benefit is a $300 annual travel credit, that is automatically applied to any purchase coded as travel. I imagine a vast majority of people easily max out that benefit every year.
So I view the “out of pocket” on the card as being $150, which isn’t too bad.
However, psychologically there’s no denying that a lot of people don’t want to pay a $450 annual fee. I can’t count the number of people I’ve told about the card, and I’ve explained “you’ll pay a $450 annual fee, but you’ll get a $300 travel credit that’s basically as good as cash,” and their response was simply “I don’t want to pay $450 upfront.”
If that applies to you, then maybe a card with a $95 annual fee that’s even waived the first year is a better option.
You don’t spend that much on dining and travel
Let’s assume the primary reason you want either card is for the return on spend that it offers. Given my above math on the “out of pocket” on the Sapphire Reserve being $150 per year, that means you’re paying an additional $55 over the $95 annual fee on the Sapphire Preferred.
Personally I value Ultimate Rewards points at 1.7 cents each, so to me that means if you spend at least ~$3,200 on dining and travel per year you’ll come out ahead with the Sapphire Reserve. That probably includes many of us, though certainly not all of us.
You want to eventually get the Freedom or Freedom Unlimited
For many, the biggest restriction when it comes to acquiring the Sapphire Preferred or Sapphire Reserve is Chase’s 5/24 rule, where Chase typically won’t approve you for select cards if you’ve opened more than five new accounts in the past 24 months. If that applies to you, and your long term goal is to have the Sapphire Reserve, it could make a lot of sense to first hold onto the Sapphire Preferred for a while, and then eventually downgrade it to the Chase Freedom® Card or Chase Freedom® Unlimited, both of which I think are great no annual fee cards that are worth holding onto long term.
You don’t value an additional Priority Pass membership
One of the big perks of the Sapphire Reserve is that it offers a Priority Pass membership. It’s great to have a membership in the world’s largest lounge program. However, I’m sure I’m not the only one who has multiple memberships at this point, including through cards like the Citi Prestige® Card, The Platinum Card® from American Express, and The Business Platinum® Card from American Express OPEN. As a result, when it comes to valuing benefits, I don’t include the value of the Priority Pass membership. Your mileage may vary…
Regardless of which card you apply for, I absolutely recommend applying for either the Sapphire Preferred or Sapphire Reserve (or maybe even both) if you’re new to miles & points and eligible. There’s a lot of merit to both cards. I know the Reserve has become more popular lately, though for many the Sapphire is a more approachable option, especially for those new to miles & points.
I wouldn’t be surprised to see a bigger sign-up bonus on the Reserve again at some point, while I doubt we’ll see a bigger bonus on the Preferred.