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The Chase Sapphire Reserve® Card has been incredibly popular since it was introduced about 18 months ago. The popularity far exceeded Chase’s expectations, and that’s because this is a $450 annual fee card that has become popular with people who don’t typically pay $450 annual fees. Most longtime readers probably get this, but for the rest of you, I think it’s worth talking specifically about why the Sapphire Reserve won’t really cost you $450 per year.
Yes, the card has a $450 annual fee. You’ll be billed that upfront, and it’s the cost to “buy-in” to perks like triple points on dining and travel, a Priority Pass membership with unlimited guesting privileges, amazing travel coverage, car rental coverage, and purchase protection, a Global Entry fee credit, the ability to redeem points for 1.5 cents each, and much more.
But the one biggest perk of the card that offsets the annual fee is the $300 annual travel credit. Because of how generous and easy to use this is, I consider the real out of pocket on the Chase Sapphire Reserve® Card to be $150 per year.
That’s because the annual travel credit is so easy to use that virtually anyone should be able to maximize it without effort. Here’s what you need to know about the credit:
- You get one credit per cardmember year (a period that roughly coincides with when you’re charged the annual fee)
- There’s no need to register, as the credit is automatically applied to any eligible purchases
- You can apply the credit over however many purchases you’d like, so if you make one $300+ travel purchase that will knock out the credit, or if you make 30 $10 purchases, that works too
What surprises many people is what qualifies as travel. We’re not just talking about flights and hotels, but all kinds of other things as well, including:
Merchants in the travel category include airlines, hotels, motels, timeshares, car rental agencies, cruise lines, travel agencies, discount travel sites, campgrounds and operators of passenger trains, buses, taxis, limousines, ferries, toll bridges and highways, and parking lots and garages.
Things like taxis, Ubers, tolls, parking, trains, buses, and more, all qualify as travel. So much of what you even spend on a daily commute would be reimbursed.
While other cards have very specific requirements for their travel credits, the Chase Sapphire Reserve® Card has by far the easiest to use credit, to the point that I think it’s roughly worth face value. I’ve had some readers complain about the redemption process for credits offered by other cards, but I’ve never gotten a complaint about this credit. The way I view it, the real out of pocket on the card is $150.
Why does the Sapphire Reserve have a $450 annual fee, rather than just charging a $150 annual fee and not having a travel credit? There are two reasons, I suspect:
- Credit card companies want as much “share of wallet” as possible, so by reimbursing you for certain types of spend, they know you’re most likely to keep their card in your wallet
- Chase also offers the excellent Chase Sapphire Preferred® Card ($95 annual fee, waived the first year), and Chase doesn’t want to cannibalize that card too much, so the best way to avoid that is to offer two cards at very different price points, and especially to introduce something that competes with the other premium cards out there
What has your experience with the Chase Sapphire Reserve travel credit been?