“Can Any Unbiased Party Recommend The Sapphire Reserve Over The Sapphire Preferred?”

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Yesterday I wrote a post about what I consider to be the single best card duo out there — specifically, the  Chase Sapphire Reserve® Card and the Chase Freedom Unlimited®.

On that post, reader James K. left the following comment, which I wanted to take a closer look at:

I really don’t see how any unbiased party could recommend the Chase Sapphire Reserve over the Preferred. The CSR has a $450 annual fee, not waived the first year. The CSP has a $95 annual fee, waived the first year. The CSR offers 50,000 points, the CSP offers 50,000 + 5,000 for adding an authorized user. Both trigger the Freedom Unlimited so that’s moot here.

As such, even if a person maximized the travel credit, Mr. CSR is spending $150 for 50,000 points their year while Mr. CSP is spending $0 for 55,000 points. How much spending on travel/dining would Mr. CSR need to spend to come out ahead? Much more than the average person spends in a year, I’d reckon.

Once the CSR lost the 100,000 point signup bonus, I see no “killer app” compared to the CSP.

In many ways I think James is correct, and I’ve often suggested that for many the Chase Sapphire Preferred® Card is a better option than the  Chase Sapphire Reserve® Card. But there’s a bit more to this, so I think it makes sense to look at a few more of the differences between the cards, and how much they’re really worth to the average cardmember.

The advantages the Sapphire Preferred has over the Sapphire Reserve

As James says, the Sapphire Preferred has a $95 annual fee that’s waived the first year, while the Sapphire Reserve has a $450 annual fee that isn’t waived the first year. However, the Reserve offers a $300 annual travel credit that’s automatically applied to any purchase that qualifies as travel, which includes Uber, parking, etc. To keep things simple, let’s just say that’s worth face value (since most people who would have this card would also spend $300 per year on travel), which means the real out of pocket on the Reserve is $150 per year.

Year one you’re paying $150 more for the Reserve than the Preferred (since the Preferred’s annual fee is waived the first year), and year two and beyond you’re paying $55 more for the Reserve than the Preferred. Also note that you can add authorized users to the Preferred at no extra cost (if that’s something you care about), while it costs $75 to add authorized users to the Reserve.

The Preferred also potentially has a marginally better sign-up bonus. While both cards offer 50,000 points upon completing minimum spend, the Preferred also offers up to 5,000 bonus points for adding an authorized user. I value Ultimate Rewards points at ~1.7 cents each, so I value those 5,000 points at $85.

To keep things simple, let’s say getting the Reserve “costs” you an extra $235 the first year ($150 plus $85), while it costs you an extra $55 in subsequent years.

The advantages the Sapphire Reserve has over the Sapphire Preferred

What are you getting for that extra $235 in the first year and $55 in subsequent years?

  • A Priority Pass membership with guesting privileges. This can be hugely valuable if you don’t otherwise have a Priority Pass membership, while it can be worth significantly less if you already have one through another card, like The Platinum Card® from American Express.
  • A Global Entry fee credit every four years. This can be worth $100 if you’d otherwise pay for it, while it’s not worth anything if you don’t use it. Keep in mind that you can use this benefit to pay for someone else’s Global Entry enrollment fee.
  • Enhanced delay and baggage coverage, though the travel benefits on both cards are excellent.
  • The ability to redeem points for 1.5 cents each towards the cost of travel purchases, rather than the rate of 1.25 cents offered by the Sapphire Preferred. This can make a big difference for some, while for others (like me) who prefer to transfer points to one of the Ultimate Rewards airline and hotel partners, that’s not worth much.
  • Triple points on dining and travel, rather than double points on dining and travel.

Crunching the numbers

There’s no one size fits all math to this, as you’ll have to decide for yourself how much you value a Priority Pass membership, Global Entry fee credit, the ability to redeem points for 1.5 cents rather than 1.25 cents, etc.

However, it’s easy enough to calculate the breakeven point of triple points vs. double points, at least based on my valuation of points (and you can do the math with your valuation). Both cards offer bonus points on all dining and travel purchases, which includes more things than you’d assume, like Uber, parking, subway tickets, etc.

If you value Ultimate Rewards points at 1.7 cents each (like I do), then you’d have to spend ~$3,235 in years two and beyond on travel and dining to recoup that incremental $55 cost. In this calculation you’ll only want to include money you’d otherwise spend on one of these cards. For example, I spend a lot on airfare (which is travel), and I primarily use The Platinum Card® from American Express for that, since it offers 5x points. So I leave the cost of most airfare out of the above equation.

The first year math is trickier. If we were to say that the value difference between the cards the first year is $235, you’d have to spend ~$13,823 on travel and dining to recoup that. That’s significant. Of course the above math doesn’t factor in the other benefits offered by the Reserve, which you’ll have to crunch the numbers on yourself.

But let’s try the math the other way. I imagine many people are redeeming Ultimate Rewards points as credit towards the cost of a travel purchase. Let’s say you’d redeem Sapphire Preferred points for 1.25 cents each towards the cost of a travel purchase, while you’d redeem Sapphire Reserve points for 1.5 cents each towards the cost of a travel purchase. At that point you’re earning a return of 2.5% on the Sapphire Preferred for dining and travel purchases, and a return of 4.5% on the Sapphire Reserve for dining and travel purchases. That’s a 2% difference, meaning that the breakeven after the first year is just $2,750 of dining and travel spend per year. I think a good number of people who would consider either card would exceed that threshold, especially given how broad the definitions of dining and travel are.

Bottom line

There’s no right or wrong answer, and for that matter keep in mind that you can always apply for the Chase Sapphire Preferred® Card first, and then after a year product change to the  Chase Sapphire Reserve® Card. In many ways the Preferred is a good starter option, and then based on how you use it you can decide if the Reserve is worth the upgrade.

I don’t think James is off base in suggesting that the Sapphire Preferred is a better option for many. If you don’t spend a ton on travel and dining, and if you don’t value the Priority Pass membership, the Global Entry fee credit, the ability to redeem points for 1.5 cents each towards a travel purchase, etc., then the Preferred may be a better option.

However, I certainly think plenty of unbiased people could recommend the Reserve over the Preferred. What makes the card great is that it offers so many premium benefits with a very reasonable out of pocket. The reason the Sapphire Reserve has been so successful is because it has become popular with people who wouldn’t otherwise pick up a $450 annual fee card. Many of those people don’t otherwise have a card offering a Priority Pass membership, Global Entry fee credit, etc., so they’re getting big value out of those benefits.

I’m curious to hear what you guys think about this!

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  1. I’d say the majority of my spend, period, full stop, is on dining and travel (Uber/Lyft, bus pass, flights, dining, etc.). I don’t have the Amex Platinum, so pretty much all my airfare spend goes on this card once I’ve used my Citi Prestige credit.

  2. Ben,

    I think you are leaving out the fact that a lot of people choose to redeem the UR points through the portal at 1.5 cents a point instead of playing games with maximizing value through transfer partners. If you calculate points in this way you get an extra $125 from the sign up bonus (CSP $625, CSR $750). Additionally, if this is how you redeem the points it also increases the value of the points you already have. My wife had 150k UR points before she signed up for the CSR, she was able to redeem for $375 more through the portal then if she kept her CSP.

    With a CSR we usually redeem through the portal and only transfer to partners when we are trying to top off another account for an award (like United).


  3. Myth busted, James K. Spent about $100,000 on travel/dining on the Reserve in 2017. Is 300k points worth more than 100k points? You do your silly annual fee math I’ll do my own math thank you very much.

  4. For those that don’t have AMEX PLT this is a great card and well worth the cost. I have both using my Sapphire for everyday and international spend then AMEX for air/hotels car rental. The travel portion of AMEX is still superior, Chase is gaining ground.

    SO my choice is both cards if possible, Chase Sapphire if only one works

  5. I’m unbiased and I’d pick the Reserve over the Preferred. Why? Because I look past year 1 and because I spend a lot on travel and dining. Not a tough decision to make if you’re in my position.

  6. If you truly don’t spend much on travel and dining, then sure, the CSP may be better … but some other card like the Citi Double Cash may be even better than that, since you do still have to pay an annual fee long term on the CSP. You need to have a certain amount of travel and dining spend for either card to really make any sense at all.

  7. There is no right or wrong answer on this*, and I have argued in the past that the CSP is “better” for a new points/miles person given that it’s less commitment (even though I believe the CSR is generally better overall given that it’s either/or now, right?).

    The CSR, as has been mentioned in multiple places, is marketed at $450 to limit applications from people like James K – not because he is not worthy or potentially profitable, but because he is self-selecting away from it. If you don’t need to do the math because you spend large amounts on travel and dining, and you’re not living paycheck to paycheck where the $450 would cause chaos every year, you get the CSR. If you are the type of person who *does* the math and realizes you spend $300/month on Starbucks/lunch runs/fast casual with the family you get the CSR. Otherwise, get the CSP, simple. Oft times when people see “free”, they are less committed, and Chase would rather have people who are going to pile on spending with the CSR than people excited about $0 first year AF .

    *As an “unbiased” source (meaning I get $0 for saying this), I kept a spreadsheet for the estimated money saved by using the PP…at least until it was obvious that the PP was paying for the card almost by itself in my situation. I stopped at over $200, and that didn’t include the final two trips of the year. There’s value in the better trip insurance and rental coverage too, if they matter to you. In our case it was no contest to get/renew the CSR, buy your mileage may literally vary.

  8. @Ari – Your snark is totally unwarranted (and your math is wrong, as the CSP would generate 200k points). You obviously spend much more in these categories than the average person, and James K. admitted the value of the CSR to people like you.

  9. I have ~4 business trips each year, all travel goes on the CSR since that’s the best place, based on my current card holdings. Add in dining and it’s well worth it. Even a non-traveler could get value from it from dining alone, at least to get to break even. Throw a trip or two in and it’s a no-brainer. Now, I don’t think it’s worth getting CSR for my wife as well, but that’s just our specific case.

  10. It depends on whether you’re a churned or a keeper.

    If the goal is to keep the card for 1 year and then cancel, take the Preferred.

    If you plan to keep the account long term, take the Reserve. After year 1, the difference in the annual fee (assuming that you take advantage of the $300 travel credit) is outweighed by the benefits of the Reserve. And I think there is proof for this because I have read that Chase’s retention rate on the Reserve is high.

    After year 1, I canceled my AmEx Plat (I don’t use Uber and most of my air travel is reward travel) but kept the Reserve. I did not want to keep 2 high fee cards and felt that I was getting far more benefit from the Reserve. Chase cards now take up most of the slots in my wallet.

  11. I went on four domestic flights and one international in 2017. If we’re REALLY gonna nickel and dime this, I would say a few things in support of the #CSR4EVER:

    (1) $300 travel credit nets you 3x UR (900 UR) which at 1cpp is $9.
    (2) Lounge access isn’t a big of a deal for some people, yet they will buy themselves (and families/companions) airport food court meals/booze. I can conservatively say that, last year, lounge access saved me $200 on food and booze that I would spend on layovers anyway (liberally, I’m thinking $1,000).
    (3) CSR roadside assistance is incredible. I would pay $10/month for piece of mind for that service alone.

    My takeaways are that the (1) AU 5k UR CSP bonus is not as significant as people make it out to be [I have both CSR and CSP]; (2) McDonalds value meals for two persons + two bottled waters from an airport shop will easily run you $30 each layover you’re hungry; and (3) the CSP $95 fee + 5k AU bonus is designed to weed out people that would rather hoard points than exploit the benefits of the CSR.

  12. I wrote a script to analyze my own spending anyway.. over the last year. The Reserve easily comes out on top for long-term (i.e. excluding the first year being $0 for Preferred). It’s not even particularly close. I think the Reserve ended up giving me an extra $150 of value per year at least. This was also with a conservative valuation of $75 for ALL the extra perks the Reserve has. I only spend about $9000 per year on travel/dining as well.

  13. If you bought some swanky new electronics and it gets damaged/stolen within 120 days, CSP pays up to $500 while CSR pays up to $10,000 per purchase protection.

  14. Between my work travel – , my personal travel – and dining out for for personal and work, combined with the $300 credit annually, the PP card and other features + 1.5c vs 1.25c, it’s a slam dunk for the Reserve for me. But travel (work + personal) + dining out (work + personal) for me is probably $40k/yr +$10k – and that doesn’t even include my work airfare which goes on a company card.

  15. @tda, so the question is, “What is average?” Let’s round up Ben’s numbers for the sake of easy math and say that you need to spend $3,600 per year on dining and travel to be worth your time, or $300 per month. Remember that travel includes “airlines, hotels, motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, and operators of passenger trains, buses, taxis, limousines, ferries, toll bridges and highways, and parking lots and garages”. So if you take the train to work, that counts. Pay for a spot at a parking lot or garage near work? That counts, and don’t forget the bridge toll if you have to deal with that. Lyft or Uber? Counts too. I would be willing to bet that of the people willing to pay a $95 fee for a credit card, a majority would spend enough on dining and travel to make the CSR worth the extra cost.

  16. don’t forget that in the first year you can potentially get 2 $300 credits. if it’s a 1 year deal that puts CSR ahead

  17. @Steven L. I agree with you.. I think people spend way more than they realize on the travel and dining. If you are willing to pay $95 for CSP then you are probably willing to spend $150 on a CSR.. I live in Chicago and take the train to work. $100 a month for my CTA pass = $1200 a year. A few weddings? One big trip? Do you eat lunch out or bring? Dinner out 2x a month? It adds up really fast. This isn’t to bash the CSP by any means – it’s a great card. I just bet if someone tracked their spending they would be surprised at how worth it the CSR actually is.

  18. Reserve has 1.5x redemption on Travel vs 1.25. A 50k bonus x .25 is 125 more dollars for Travel. So now it is only 25 dollars more. Certain spending overcomes that easily…

  19. Two options make the extra $55 for the Reserve worth it:

    1. Priority Pass for me and all guests. Used this 3 times in various configurations in 2017. Probably got about $40 worth of value out of it. But like having the option quite a bit, can make airport time better, and as Priority Pass is being added in more US airports, an even more likely option.

    2. Option to buy travel at 1.5c/point. Haven’t ever actually used this yet, but like the option for doing something like buying a cheap cash ticket on Delta, for example.

    For me, having these two options is easily worth $55/year.

  20. I was over 5/24 and switched from the Preferred to the Reserve with no sign-up bonus, and with about $4k/month in travel and dining expenses through work alone, it’s totally worth it. It has to be worth it in the long haul, with how much money Chase spent on the sign-up bonuses when it first came out.

  21. Good analysis,Lucky.I think the math for many should factor in the authorized user $75 fee.

    How much would be the spend to break even in that case?

  22. Anyone who wants to play in the miles/points game’s “major league” would go with the CSR. The CSP is an inferior product for that…


  23. the 1.5 cent per point through the SR travel portal is underestimated and it sounds like underutilized (as Lucky admits). It is particularly helpful for inexpensive domestic tickets. You are not locked into a particular airline’s award availability or a particular airline currency. Plus you earn miles on travel. I have also used it for rental cards and hotels at good rates of redemption. For those of us who are limited to narrow scheduling, it is very helpful.

  24. Here’s another way to justify the $150 annual fee (minus $300 credit):
    1) you spend at least $2,750 annually on travel/restaurants, which earns you an additional 2750 UR points (worth ~$55); i.e. as compared to CSP with a $95 annual fee would earn you atleast 2 transferable points for the same spend.
    2) spend $4,750 annually in those categories to earn 7125 additional UR points (worth ~$150) as compared to CFU with no annual fee.

  25. as many have previously pointed out, it depends. In my case I had both the CSR and CSP cards — I signed up for the CSP just before Chase announced the CSR and then got the CSR; lots and lots of bonus points. I elected to keep the CSR and downgrade the CSP to Freedom unlimited.
    And I did that because in my mind the Priority Pass membership was well worth the additional $55 in annual fees. My husband and I have used it multiple times in the past year so I’m more than happy having it. Yes I know that other cards offer membership but some of them require paying an entrance fee.

  26. People who read OMAAT are fairly affluent , compared to the average American.
    Also we travel FAR more than is typical

    Given that, for many of us the CSR is a no brainer

    I just hit my anniversary a week or two ago
    I already got my $300 travel credit back due to 2 restaurant purchases and the parking garage at my YMCA (which credits as travel)
    Last year I had it back in 1 day (bought plane tix)

    So for me, the CSR is $150/year, not $450 per year

    But for those just starting out in life, or those with limited or average means, the CSP is a great card.

    There is more than one way to skin a cat

    I’m just happy we all have options to choose what fits our lifestyles!

  27. This is the topic that I often bring up to others when I preach the points game. And to me, CSR is greatly, greatly overrated. The case I’m about to make is for the expert churners. Granted, for the average public who is not interested in churning, I’d always recommend CSR over CSP for reasons mentioned by many. But I, as a churner, will never, ever pick up CSR, and here’s why:

    Any sane expert maximizing the points game should ultimately pick CSP, get the 55,000 bonus, and churn the next year before the annual fee kicks in (to wait out 24 months and repeat; I have my theories about managing 5/24), so forget about the cost difference of $55 in subsequent years. This should not be debatable. If you decide to keep the card after 1 year, you’re not a points maximizer.

    Since CSR is very generous with the $300 travel credit, take face value of the credit, and we get the $245 ($450 – $300 + $95) incremental cost between CSR and CSP as Lucky points out. I value UR (and MR) at 2.5 cents each (I don’t redeem if less value), so I need to spend $98,000 in travel/dining to offset the $245 incremental. Excluding, of course, airline tickets.

    CSR has Priority Pass, sure, but so many other cards do too.
    CSR has $100 global entry fee credit, but so many other cards do too (this is hardly a ‘benefit’ to begin with).
    CSR has the ability to redeem 1.5x each on airline tickets, but do you really spend your UR this way? You follow the industry valuations and hear 1.7c+ value for UR, and use it for 1.5c value? Please reconsider your way of redeeming miles.

    All of the above gives $0 edge above CSP.

    Where you’ll get the incremental value from CSR for the incremental cost of $245 are:
    1. Better delay/baggage protection that is difficult to trigger (even Lucky admits that this is not worth forgoing the 5x MR with Amex Plat).
    2. Visa Infinite Golf Benefits that is equally difficult to trigger.

    If you’re worried about the ability to point transfer to airline miles if you churn CSP or CSR, just dump all your UR to Korean Air before closing your account, and it will do you good.

    There’s no reason to even consider CSR if you’re a churner.
    There’s no reason to even consider CSP if you’re a general public.

  28. @Lucky —> My only quibble is probably semantics, but you say, “Year one you’re paying $150 more for the Reserve than the Preferred (since the Preferred’s annual fee is waived the first year), and year two and beyond you’re paying $55 more for the Reserve than the Preferred.” I would rephrase it to say, “During the first two years of card ownership, the CSP costs the cardholder $95, while the CSR cardholder spends $300.” It’s the third year where you start with $95 versus $150 year-in and year-out (only a $55 difference).

    That said, I’d jump on the CSR in a heartbeat, where it not for the dreaded 5/24 rule — even though I missed out on both the 100k and 50k sign-up bonus (presuming I upgrade the card, rather than downgrade the CSP to a Freedom card and apply for the CSR on its own). I *easily* spend more than $3,200 in a year on dining alone, let alone travel, so it’s a no-brainer for me . . .

  29. Hey Lucky,

    Thanks for responding in such a measured, evaluative way. Wasn’t expecting to get a whole blog post!

    To the people above (Ari, Ziggy, etc) who are talking about how much they spend on the Reserve, that’s fine. But I feel that most people who read this blog are either A) Not spending over 100,000 a year on the card or B) using multiple cards, and thus spreading out the spending. For instance, all my airfare goes on my Amex Platinum for 5x, my hotels usually go on the respective hotel’s credit card, etc. Furthermore, no one’s mentioned the Citi Prestige, which also has 3x for dining and airfare and excellent travel interruption benefits.

    Essentially, if you only have one card (or two, as in Lucky’s initial post) and are the type of person who puts a lot of money on that one/two cards, then yes, I see the value proposition of the CSR over the CSP. But if you are a minor spender — and thus don’t earn back the value delta between the two cards — or are the type of person who has an Amex Plat, has a Citi Prestige, etc., then I don’t see the point of getting the CSR.

  30. I think the most relevant comparison is between CSR and Citi prestige. Assuming you like the points equally (ok, maybe bad assumption, like Chase points better) is it worth having CSR to get an extra point on dining? While still holding Prestige for the fourth night benefit. I feel like if Citi matched the points on dining they would crush it, but the issuers all seem to not offer the ultimate, just offer enough to hook someone. I spend enough on dining the extra point pays the $150 cost of CSR.

  31. @Bgriff @Steven L. @Greg

    This is the crux of the CSR/CSP question: if you don’t spend enough on travel/dining to get a higher return on CSR, then you probably don’t spend enough on travel/dining to justify CSP in the first place.

    Example: in the year 2+ break-even case (with UR = 1.7 cpp), $3235/year spending is the CSR/CSP breakeven point, with a total net return after AF of…$15 ($3235 * 2 UR/$ * $.017 $/UR – $95). In comparison, with $3235/year spend, you could net:
    – $48.52 with just a Capital One Quicksilver (no AF, no FTF) ignoring category spend
    – $64.70 with a Citi Double Cash (no AF) ignoring category spend
    – $97.05 with a Citi Costco card (no AF, also no FTF as of now) on travel/dining

    In fact, if UR = 1.7 cpp, then you need to spend $23,750/year for CSP to beat Citi Costco — and by that point, CSR is already beating CSP by $348.75 in net return.

  32. Wow. You guys are pretty much saying same thing over and over in different words.

    Dont let that trump powder rub off on you.

  33. I have the CSP but preferred to hold on to my Amex Plat for travel instead of adding the CSR. The 5X on travel is a winner for me, but I value Amex customer service significantly more than Chase’s CS. For the purposes of this post, I travel about 750k + anually and main added expenses are apartment or villas at destinations and limo services, such as blacklane.

  34. On a bit of a side note, I’m a NEXUS member and CSR cardholder. Wondering why Global Entry & TSA Pre-Check fees get comped, but not NEXUS – especially since NEXUS membership is ~$50 cheaper and ultimately includes both of the others.

  35. Its also worth mentioning, CSP does have one advantage over CSR, Free AU. If your a big family, having the CSP earning 2x on 4 cards could be worth a $95 fee. On the CSR, AU @ $75 fee per card might not be worth it at the end.

  36. I’ve got the AMEX Platinum st $550/yr and United Club Card at $450/yr. The last thing I need is another $450 card.
    $95 is enough for me.

  37. @James K, What bugged me in your original comment was your implication of bias in someone (Lucky) who recommends the CSR, because the value proposition for your imagined average person doesn’t make sense to you personally.

    Even in your response, you make unfounded assumptions about the average reader of this blog and draw speculative conclusions from it.

    But the original post wasn’t about “best for average person,” it was just about “best.” And the CSR, is, objectively, a better card than the CSP (except when you want to make a CDW claim after totalling a very expensive rental car). It earns more; it makes UR points worth more; it has more and better benefits. That doesn’t make it better for everybody than a CSP, but an iPhone X isn’t going to be a better for everybody than an iPhone 8, either. But It’s still a better phone, and it can recommended as such without bias.

    As an aside, I’m someone with an Amex Biz Plat and a Citi Prestige, but my CSR is my favorite category card by far. I might not be your average person, or even average reader of this blog, but who is?

  38. @foobar I agree.. Thats the key question. After the sign bonus for the CSP, is it worth getting the uber card over it? Crunching the numbers I get more value for the CSR, especially with their transfer partners. However, I feel like if you aren’t spending enough to justify the CSR, you probably aren’t earning enough points to make transfer partners worthwhile. Why not get 4x and 3x points on the über card? I’ve considered for the cell phone insurance even though I’d put zero spend on it.

  39. Another great article, Lucky! As Lucky said, there is a certain traveler that the cheaper Chase Sapphire Preferred is better but the more expensive Reserve can pay back more to some travelers.

    Consider a cheaper Global Entry. That is NEXUS. It’s only $50 for 5 years. If you time your application to just before your birthday, which means approval right after your birthday, you can get NEXUS for 5 year, 11 months.

    If you apply by paper, instead of online, you can be charged about $47 because they will charge you about $50 in Canadian dollars but err on the side of savings for you. If you are Canadian, a paper application is C$50 or about $39 for up to 5 years, 11 months.

    NEXUS is given GE privileges. A drawback is you must be interviewed at a NEXUS location, which has very limited locations in the US and more in Canada. The US locations are near a few US border stations and a few large cities, like Seattle and Detroit. This is because NEXUS is originally geared to US-Canada land travel and the price is held down by pressure from Canada.

  40. I must correct myself. NEXUS cards are not good at non-US/Canadian GE kiosks so maybe that excludes Shannon, Dublin, Nassau and Abu Dhabi.

  41. Any dollar not spent on a Citibank Double Cash card could have earned a nominal yield of 2% with no annual fee.

    One has to spend at least $6000 annually on travel and dining with the Chase Sapphire Reserve, use the $300 travel credit, and find a good value for a $0.015/point redemption at the Chase travel portal to enjoy the Chase Sapphire Reserve benefits for free after the net $150 annual fee with a 2% return. The calculation follows.

    ($6000 annual spend)*(3 earned points/$ on travel & dining)*($0.015/point redeemed at Chase portal)-$450+$300 = $120 annual reward or 100*$120/$6000 = 2% return on $6000 annual spend. Point transfers above $0.015/point or travel/dining spend above $6000 increase the yield above 2% after the $150 net annual fee.

    A similar calculation for the Chase Sapphire Preferred assuming all annual spend on travel/dining, $0.0125/point at the Chase travel portal, and a $95 annual fee, and 2 points (instead of 3) earned on travel/dining expenditures would require $19000 annual spend on travel/dining to yield 2% after the annual fee. The CSP lacks many of the CSR benefits. Annual spend of $19000 on travel/dining is unlikely but illustrates the lack of leverage in the CSP point earning bonus and value at the travel portal.

    Many will point out that better point redemption values can be had with point transfers not using the Chase travel portal but that is true for both the CSR and CSP and requires a time investment.

    Key assumptions are finding value at the Chase travel portal and the Chase card benefits being there when you need them. One also has the option of cashing out Ultimate Rewards points at $0.01/point which is not so easy with competing credit card point systems

    The relatively low spending threshold shown for the CSR allows limited annual spending to be directed to other cards for higher returns or to meeting new card spending requirements.

    Another perspective. Have a nice day all.

  42. @Dave: When I cleared US customs at the Dublin pre-clearance facility, my GE worked just fine using NEXUS. You simply submit your passport into the kiosk and it matches your passport against the GE database.

  43. Interest that someone brought up chase reserve vs citi prestige comparison. I have both as well as plat business Amex. I find each card has its own strength that pays for their steep $450 yearly membership. For Citi, I got well over 10k back from 4th night free which obviously more than pay for the fee itself. Had St Barths not gotten hit by hurricanes last year, I would had gotten even more back. Sadly thank you points isn’t as easy to use as chase points. For Chase, this is where I put any hotel stays less than 4 nights on. Restaurant outings all go on this card too not on citi because Chase points are easier to use for me. Amex is good on out of pocket airfares. Also good on things when I think there may be a possibility of asking for a refund due to whatever reason. Amex is usually very good on standing on their cardholder’s side. Never gotten the Prefer and now since there is no way for me to get the sign up bonus without cancelling Reserve, I don’t think I ever will.

  44. @Ivan:

    I think there are two things that bias people towards the CSR. #1 is commissions, which you can always tell because suddenly for no apparent reason all the bloggers start writing posts about a particular card at the same time. I love Lucky, but this is a business. And #2 is perceived exclusivity. Because of 5/24, not everyone was able to get the CSR, which led to a certain “in-crowd” vibe towards the card. For both reasons, I think there’ s a lack of objectivity towards it.

    And if you have the Amex Platinum and Citi Prestige, I just don’t have any idea how you’re objectively valuing the CSR over the CSP. Unless you spend north of 15,000 a year on dining, it just doesn’t make sense to me.

  45. @James k

    There are times when I feel like the commission side comes into play but have never felt that in the CSR vs CSP. Also, this is filled with comments of people who have done the math and realized they get far better value out of the CSR than CSP. When I judge it I try to ignore the other CSR benefits.

    Either way, I think calling him biased against the CSR is pretty unfair. He obviously spends enough that it’s worthwhjle (and by these comments a lot of people have realized they spend $3300 a year on travel and dining). I think the only reason there’s a bias is because they’ve found great value from it.

  46. Question: how easy is it to product change a Preferred card to a Reserve card after one year? And can you product change if you will be exceeding 5/24 rule at time of product change request (get Preferred card when under 5/24 rule but will be over 5/25 when request product change)? Assume I have excellent credit and that is not a factor. I like idea of saving on annual fee in year 1, but would like the Reserve card for long term.

  47. @ Mike — The ability to product change has nothing to do with the 5/24 rule, so you can get approved for a product change even if you otherwise exceed that limit. After waiting a year the process of product changing should be straightforward, as far as I know.

  48. @James: as for your first point about bloggers being financially biased, I’m of course aware of that too, but that doesn’t mean they’re offering bad advice because they post something you personally don’t see the wisdom of. Its easy to tell which posts are closer to advertorials (of which Lucky’s was one), but that doesn’t make their content wrong.

    As for the “exclusivity bias,” of the CSR, I really think that’s in your head only — and it’s nonsense besides, because 5/24 also applies to CSP, and if you already have a CSP it can be easily converted to a CSR. Anyone can have one, except those who would be equally ineligible for a CSP.

    As for how I can value the CSR more than other premium cards, it’s easy. I value UR more than MR, and way more than TY (which I barely bother with). Not all points are the same. UR are good for UA, which I fly a lot (and who have much cheaper awards than Delta, if you want to factor that into your cost equation); and with a CSR, UR are also easily redeemed at 1.5 cpp (rather than 1.25) when cash prices are cheap or medium on any airline, which is great when there’s, for example, a JetBlue sale. UR are also easily family combinable, unlike the others, and I find that super valuable.

    On the earning side, I live in NYC, so every single day involves travel (public trans or taxi) and dining (lunch at minimum) of some kind, and that extra 1X adds up more than enough to justify the first year cost.

    As for Amex Biz Plat, I’ve got enough points that I’m almost never (maybe actually never) paying out of pocket for flights, so 5x doesn’t do much for me; I do use BBP for non-category spend. And with Citi Prestige, TY points don’t have great transfer partners, and they’re worth only 1.25 when paying with points, so I have no real desire for them. I use Prestige for for 4th night free, and insurance on award tickets.

    I personally recommend either the CSP or CSR (or something else) on a case by case basis, but I think the CSR is often the better choice for those keeping the card long term. You might be right that it’s a better deal for some to get a CSP and then convert it to CSR after a year, but that’s definitely not the kind of move the “average person” (non-churner) wants to do, and the kind of hack that’s not really mentioned on a mainstream blog like this.

    Anyway, mine is just one scenario — my point is that you don’t seem to make room for the idea that because something doesn’t work for you personally, that it might work for someone else, and can be recommended fairly, even by those with a financial stake in doing so. The CSR is a better card than the CSP, even if it costs more, and I don’t disagree with Lucky’s recommendation in this case — and I think his willingness to follow up the article with a detailed breakdown of when it makes sense to have a CSP instead speaks to his willingness to fairly serve and inform his readership.

  49. I do 3-4 vacation trips a year, normally with tours and I keep the CSR card for the trip cancellation/medical evacuation coverage. This saves me hundreds of dollars since I don”t have to pay for the trip cancellation coverage with the tour company. For me that makes it worthwhile to have the CSR over the other cards.

  50. Much like reviews where you are getting comped, it is a bit hard to be biased or unbiased when you are pimping products as well. Just give everyone the info and let them make their own conclusions.

  51. If you don’t travel enough justify the reserve, then you probably won’t travel enough to justify the preferred. It’s probably better to just get a 2% cash back card.

    Between the reserve and the preferred, assuming all benefits being equal (they’re not), priority pass alone is worth the additional $55/year. I work a pretty normal job with an average income and don’t travel for work. I the past year, I’ve used priority pass in ORD, DOH (x2), SIN, BKK, ATL, LGA, LAS, LAX, LIM, CUZ, and I could’ve used it in DEN but didn’t. Assuming each trip at $10 (which is obviously too low), that’s over $110 in value alone.

    That being said, if you’re in a relationship/married, I would not pay the additional $75/year for the reserve for my spouse unless he/she travels a lot independently. I would just get a freedom or freedom unlimited and add him/her as my authorized partner.

  52. In the context of the topic presented, which boils down in many ways to “CSR v. CSP — why keep the CSP?,” it would appear the answer boils down to how much spend one puts on the card in the areas of travel and dining. Spend enough, and the CSR makes more sense; don’t spend that much, the CSP is the way to go. It’s a simple “either/or” situation, ESPECIALLY since Chase somewhat arbitrarily decided a few months ago that people cannot hold both.

    I want to bring up a tangental point: In the course of the discussion so far, several people have brought up the Citi Prestige card — particularly in light of 1) the 4th Night Free benefit, and 2) the superior travel insurance offered. So the question (tangentially) becomes “Citi Prestige v. Citi ThankYou Premier — why keep the CTYP?” The only reason *I* keep both is that the Premier card INCLUDES gasoline purchases as part of travel (i.e.: 3x points), whereas the Prestige card oddly does not (only 1x points). And since I generally save enough with the “4th Night Free” benefit to cover AT LEAST the $200 AF (after the $250 travel credit) for the Prestige card AND the $95 AF of the Premier card — for me — it’s a no brainer to maintain both.

  53. Ok, so for me I am actually even at this point. I signed up for the card in December 2016 and mediate lu got the $300 credit, then the year changed and I got another $300 credit and now have gotten another $300 credit and have been charged $900 for fees so far. So as it stands right now I am even on that part. I just used their travel agency and got my wife a ticket to India so used points and cash and then got the miles from delta for the air France flight she took. For me so far the CSR was a no brainer! This does not include the other travel and dining we do throughout the year! Best card ever in my opinion.

  54. It is sad to me that people immediately see nefarious reasons for Lucky’s posts

    Yes, it’s a business
    He also makes a disclaimer to that fact

    But to say there is NO reason to get the CSR over CSP is rediculous
    Many of us do far better using the CSR for reasons mentioned above

    For me, 3 points >2 points, plus the 1.5 vs 1.25 conversion factor makes the CSR a complete no brainer. Add in priority pass and other perks and it is my go to card.

    As I said above, the CSR is targeting a different market than the CSP
    The CSR haters are clearly people who are in the CSP demographic, but unable to see beyond their own lifestyles

    No different than suburb vs city. Or sportscar vs minivan. Both are great living options that appeal to very different buyers.

    Market segmentation is a good thing

    I spend a ton on restaurants, airfare, and Vacation rentals (rarely hotels).
    Thus CSR makes perfect sense for my life

    But I see how CSP would work for someone that isn’t me

  55. I have the preferred and the ink and the freedom unlimited, if I cancel the preferred ( I want to apply for the reserve to get the 50000 bonus points) will I be able to get ur points from the freedom unlimited and the ink , being that it is a business card and a personal card ??

  56. There are many useful comments in this post. Peter and others summarized where I was heading with my comment above. If one does not spend enough on travel/dining to justify the reserve card, then there is likely not enough annual spend to justify the preferred card and cash back is the way to go assuming one will keep the card after the first year. It is interesting that keeping the CSR can be justified without larger annual spend unlike the AMEX SPG card.

    It would be neat if Chase would fold the Freedom Unlimited 1.5X points multiplier into the non-bonused spend on the Sapphire Reserve instead of the 1.0X multiplier so that carrying the Freedom Unlimited would not be necessary (thinner wallet) and so one would enjoy the added purchase protections of the Sapphire Reserve. I would consider carrying only two credit cards with that scenario – the Chase Sapphire Reserve and the AMEX 5% Blue Cash. Dream on. As it stands, the Citibank Double Cash and the AMEX Starwood cards also receive significant annual spend.

    Lucky’s blogs are some of the most useful. Thank you.

  57. I have both cards (Preferred and Reserve). Will probably downsize the Preferred to Freedom Unlimited, since I always grab the Reserve because of more points. I also have an Amex Plat, so I’m pretty much covered for benefits. I travel a lot, and use the Reserve card more than any other card (unless I’m trying to make a spend). Best card ever. Hoping to spend my $300 travel credit in a couple of weeks.

    For people who don’t travel that much, the Preferred is a fine card. Just depends on your situation. But I like 3X instead of 2X for travel and restaurants.

    I got the Preferred for the bonus and thinking I could use it for items that get only 1X. But it really isn’t being used much.

  58. One potentially big benefit of the Reserve over the Preferred (that I didn’t see Lucky mention) is primary car rental insurance.

  59. Folks,

    Let me add two more calculations which are illuminating.

    Annual dining/travel spend of $3800 pays for having the Chase Sapphire Preferred card:
    ($3800 annual spend)*(2 earned points/$ on travel & dining)*($0.0125/point redeemed at Chase portal)-($95 annual fee) = $0.00 annual reward.

    Annual dining/travel spend of $3333.34 pays for having the Chase Sapphire Reserve card and its added benefits if you can use the $300 annual travel credit:
    ($3333.34 annual spend)*(3 earned points/$ on travel & dining)*($0.0150/point redeemed at Chase portal)-($450 annual fee)+($300 annual travel credit) = $0.00 annual reward.

    Point transfers yielding value higher than the Chase travel portal reduce the annual dining/travel spend to cover the annual fees. The Reserve’s higher point earning and redemption valuation yields a lower annual dining/travel spend to break even on the card.

    This information combined with the data from my prior post herein leads me to conclude that the Chase Sapphire Reserve is the better choice compared to the Chase Sapphire Preferred and that the individual choice should be between the Chase Sapphire Reserve and a cash back card like the Citibank Double Cash card if one’s annual spending is limited.

  60. The above comment assumes one will keep the card after the first year. Churners will obviously do better with the Chase Sapphire Preferred due to the suspended annual fee in the first year as others have observed.

  61. @JimT

    Your calculations are good, although there are a few quibbles I have. Yes, as you mention you are using the Chase Portal redemption values. Someone should estimate the values for themselves based on what fare class tickets they buy and where they travel to, among other things. I am a coach traveler but even then I got 2 cpp recently on Korean going SF -> Buffalo, NY with a free stopover in Atlanta. Tickets to Buffalo cost a lot (cash-wise) for some reason.

    The second quibble is it doesn’t include valuation of extra perks. I got GE last year and got the CSR credit. CSR Priority Pass is worth something to travelers (at least those who are not holding Amex Plat, Prestige, or other premium cards).

    Some other considerations. The CSR involves paying $450 as a one-time payment each year, as opposed to $38 per month or so. That can put a serious short-term dent in a budget. The CSP’s $95 long-term lands a bit more softly. However this isn’t an issue with some savvy money management (and a decent enough paycheck or friendly rent/mortgage payments!). In addition the CSP can be paired with grocery cards like Amex Everyday without breaking your bank with annual fees. Having to pair CSR with other AF cards can be hard unless you make a lot of money.

    But still, CSR wins for me and I’m sure for many many others 🙂

  62. Daniel D.,

    I agree with all of your observations which would generally increase the potential value of the CSR except the one time annual fee. The annual fee is steep but should not be completely out of reason for even an occasional traveller in which case, a cash back card would likely be a better option if the card is paid in full each month. Cash back cards take no added time for finding high value redemptions which is one reason I used the Chase travel portal values. The wide applicability automatic nature of the travel credit, point earning rate, Chase travel portal point value, and added benefits are what makes the CSR card a winner. All individuals should establish point values based on their own redemptions for any point based system. My calculations were intended to define a lower threshold for annual spend to justify keeping either CSR or CSP. It is interesting to note that the CSR requires less annual spend than the CSP to break even.

    Thanks for taking the time to respond.

  63. I misspoke. Actually the calculations define a lower threshold for the point value using the Chase portal exchange rate. Thus, the calculated values are an upper spend threshold and higher redeemed point values will reduce the annual break even spend. I guess I better not respond at midnight in the future.

  64. Everyone saying churners will do better with the CSP is not taking into account the fact that the CSR travel credit is based on the calendar year, while the annual fee is based on your sign up anniversary. If you are only keeping the card for a year, CSR is the way to go. Get the 2 $300 travel credits, cancel before your anniversary date, and you are coming out ahead with the CSR (net additional $150 with CSR vs. 5000 miles with CSP).

  65. I posted this in another thread nut seems as relevant here:

    I have the Reserve but find myself rarely using it for flights. I primarily fly out of Boston on JetBlue and the earning rate on JetBlue Plus Card is 6 pts per dollar spent. I value JetBlue points at 1.5 & Chase points at 1.8 so effectively I am looking at a 5.4% earning rate on Chase Reserve vs a 9% earning rate on JetBlue Plus.

    Because of this I am starting to think I should downgrade to the Preferred. The only real benefit I am using on it is Priority Pass & I can get 10 free passes when my Hilton card is converted to the new Ascend card. Thoughts?

    Also a point everyone should know about insurance for cruises. The insurance from credit cards does not offer some coverage specific to cruises such as Missed Connections, Excursion Re-reimbursement, etc…, Because of this I usually end up buying cruise insurance in addition to the card ‘s insurance.

  66. @Hugh —> Remember, first of all, that no one size fits all. (It’s one of the Four Great Lies of the Western World.) I don’t “cruise,” and so I’ve never noticed that exemption, nor is it relevant to me. Clearly it seems you do, and that’s something certainly worth “throwing into the mix” of factors that would weigh in on any decision you might make.

    Secondly, while I don’t fly jetBlue as often as I might like, due to its lack of routes from the SF Bay Area, it is *always* worth the time to figure out the best returns for *you* and your specific situation/needs. For me, obviously, having a jetBlue credit card is not going to be important in the least. I have far more use for the 3x points I get using other cards. Were I a jetBlue “regular,” then certainly that equation would change.

  67. I just *upgraded* (not replaced; I need to keep my credit score constant) my preferred to reserve. And a back-of-the-envelope calculation justifies my move very well to my wife (who don’t care about perks as much as I do):
    * Cons: $450 vs $100 fee
    * Pros:
    ** $300 in travel cashback -> $300 cashback
    ** 3 pts/$ @ 1.5 cents/points @ ~$500/month dining out -> 500 * 12 * (3 – 2.5 + 1.5) = 12,000 cents = $120 advantage
    ** We fly back to Asia at least once/year (and I need to fly to MSP at least once/quarter) -> lounge access

    Total difference: $450 – $300 – $120 – $95 = -$65 + lounge access.

    This is before the medical insurance, trip insurance, car rental status, etc. kick in. Plus, cool card 🙂

  68. Priority pass with “guesting privileges”; can anyone confirm that guests get in without having to get an AU card? My husband and baby travel with me, and I was hoping that we can get the $450 card and not have to add a $75 card for access for the other two “guests”? Thanks!

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