5 Common Misconceptions About The Chase Sapphire Reserve

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The Chase Sapphire Reserve® Card was introduced just under two years ago, and with it Chase has managed to capture a whole new market that previously wasn’t generally interested in premium credit cards. The card has been extremely popular among millennials, who previously typically didn’t get these premium credit cards.

That’s because this isn’t a card you carry for prestige, but rather one you carry because it’s actually incredible rewarding, especially for the ways many urban millennials live their lives (they spend a lot on dining and travel, benefit from airport lounge access, and more).

The card offers triple points on dining and travel, a $300 annual travel credit, a Priority Pass membership with guesting privileges, a TSA Pre-Check or Global Entry fee credit, and much more.

There are still a lot of skeptics out there about this card, so in this post I wanted to look at five of the most common misconceptions and concerns I hear from people about the Chase Sapphire Reserve® Card. Obviously for some people these are legitimate concerns, but I wanted to share the circumstances under which I think people might have the wrong impression of the card.

In no particular order:

“I don’t want to spend $450 per year on a credit card”

While it’s true that the Chase Sapphire Reserve® Card has a $450 annual fee, having this card shouldn’t actually cost you anywhere near that much annually. If it does cost you that much annually, then this card isn’t for you.

In addition to the slew of other benefits, one of the perks of the card is that it offers a $300 annual travel credit that’s automatically applied towards any purchase coded as travel.

From Ubers to taxis to trains to parking to airline tickets to hotels, so many different types of expenses can be reimbursed. If you spend at least $300 per year on travel, I’d value that credit at face value, and say the real “out of pocket” on the card is $150 per year (of course you’re paying $450 upfront, and then being reimbursed the $300). If you don’t spend at least $300 per year on travel, then this card probably isn’t for you anyway.


Even a train ride qualifies as “travel” for the purposes of the card

“I don’t spend that much on dining and travel”

This might be a legitimate concern. If you’re someone who spends a lot on gas stations and groceries, for example, then this card might not be for you. However, “dining” and “travel” doesn’t just refer to flights and restaurants. In other words, you can easily maximize these bonuses with purchases you’d make everyday. There’s a lot that’s covered in these categories.

For the purposes of the card, here’s what qualifies as travel:

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.

And here’s what qualifies as dining:

Merchants in the restaurant category are merchants whose primary business is sit-down or eat-in dining, including fast food restaurants as well as fine dining establishments.

So travel includes everything from flights to hotels to parking to Ubers to taxis to train tickets. Dining includes things like McDonalds, Starbucks, etc. This covers a lot more categories than what people might initially think of when they hear “travel.”

“Premium credit cards are tough to be approved for”

People have the assumption that you need to have a really high income or a perfect credit score to be approved for a premium card. That’s not true at all. While it helps to have an excellent credit score (which most people should have if they’ve been using credit responsibly), you don’t need to have a super high income to be approved for this card.

Of course the exact details will depend on the person, but there are plenty of professionals with average incomes being approved for this card.

“It’s difficult to redeem the points you earn”

One of the things I love about the Chase Sapphire Reserve® Card is how flexible the points are. You can convert Ultimate Rewards points into airline or hotel points with nearly a dozen partners, or you can redeem points for 1.5 cents each towards the cost of a travel purchase.


Redeem your points towards the cost of virtually any travel purchase

Personally I get a lot of value by transferring points to partners, so I can redeem for international first class and stays at five star hotels, where I’m getting outsized value. Ultimate Rewards points transfer at a 1:1 ratio to the following programs:

AirlinesHotels
Aer Lingus Aer ClubIHG Rewards Club
Air France KLM Flying BlueMarriott Rewards
British Airways Executive ClubRitz-Carlton Rewards
Iberia PlusWorld Of Hyatt
Korean Air SkyPass
Singapore KrisFlyer
Southwest Airlines Rapid Rewards
United MileagePlus
Virgin Atlantic Flying Club

However, it also takes a bit of effort to redeem this way, especially if you don’t have experience with redeeming points. So for those people, redeeming points for 1.5 cents each towards the cost of a travel purchase can represent a great value. Since the card offers triple points on dining and travel, that’s like earning 4.5 cents towards travel for every dollar you spend in those categories.

“There are better credit cards for non-bonused spend”

The Chase Sapphire Reserve® Card offers triple points on dining and travel, and a single point per dollar spent on all other purchases. So if you redeem points for 1.5 cents each, the card offers a return of 1.5 cents on the dollar for everyday purchases, and a return of 4.5 cents on the dollar for dining and travel. Personally I value Ultimate Rewards points at 1.7 cents each (due to the ability to transfer points to partners), so that changes the values to 1.7% and 5.1%, respectively.


Redeem just 80,000 points for Korean Air first class between the US and Asia

The beauty of the Chase Sapphire Reserve® Card is how much value you can get by combining it with the no annual fee Chase Freedom Unlimited®. That card offers 1.5x points per dollar spent, and in conjunction with the Reserve, those points can be redeemed as full Ultimate Rewards points. So you’re earning 1.5 Ultimate Rewards points per dollar spent in non-bonused categories, rather than just one.

At a minimum, that means you can earn a return of 4.5% on dining and travel spend, and 2.25% on all other purchases, which is an industry leading return on spend. Since I value the points at 1.7 cents each, that’s like a 5.1% and 2.55% return, respectively.

Bottom line

The Chase Sapphire Reserve® Card won’t be for everyone. If you don’t like to travel, or aren’t able to ever travel, then this card probably isn’t for you. However, for those who spend a significant amount on dining and travel, and/or like to travel, this is an excellent rewards credit card. Hopefully the above clears up some of the most common misconceptions people have about the card.

Are there any other common Sapphire Reserve Card misconceptions you can think of?

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Comments

  1. Great job. I would have added a “Peace of Mind” section that would discuss a bit more about the primary rental-car insurance and trip-delay insurances. With the various services of trip-delay from having an agent help rebooking or finding a hotel to reimbursement, I no longer have to freak out about what to do during weather delays or other trip matters out of my control.

  2. The ability to transfer Chase points between household members is HUGE for my wife and I. The Chase 5/24 rule really doesn’t come into play for us since I have the CSR and she has the Ink Prefered and Freedom which gives us the “trifecta”. That frees us up to apply for a few other cards with no worries about 5/24. We don’t add each other as authorized users since we can both carry our cards in each others Apple Wallet anyway.

  3. Great post Lucky and I use mine side by side with my Amex PLT. Got a great deal using points for a hotel in Venice this year

  4. Is this a sponsorer post for the card? If so should be more explicit in telling readers that and not leave it in the general “may be paid for some of my posts” area and leave readers guessing.

  5. There’s a link to advertiser discloses at the top of the page. And it’s written in full at the bottom of every article.

    Lucky does feed a healthy diet of chase. But I think it’s transprent, and of course it’s his right. He also balances with good non-chase and non-credit card coverage.

  6. A great card for otherwise non – bonused spend is the US bank Altitude, if you have a Samsung phone. 3x on all mobile pay that can be redeemed at 1.5 cents per point on travel. Samsung pay uses different technology than Apple pay and works on older card swipe machines that don’t have an NFC reader and ones that do. Apple pay only works with an NFC reader, so not as many places.

  7. @Tom, Thank you so very much! Thought those were KAL colors. Have flown about all but the a380.

  8. @Lucky, is 7-11 included in Grocery or Restaurant coz they do sell food. Do you know about Family Mart and Lawson from Japan or Okay store from Hong Kong? Are they classified as grocery or restaurant?

  9. Urban millennials? That almost put me of getting the card.

    The 150% for using award points is great. I got a $1,500 week in a luxury hotel for 100,000 points using that. It was $1,500 on other travel sites.

    So that more than paid for the first years $450 fee even before the $300 credit

  10. I get the $300 travel credit in the first month or two This is a $150 fee credit card.

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