The recently released Chase Sapphire Reserve℠ has caused many to question its value and comparison to the Chase Sapphire Preferred® Card. Though it's considerably more expensive, the Chase Sapphire Reserve℠ packs a ton of value to justify its price tag. However, that doesn’t mean the Chase Sapphire Preferred® Card is obsolete. Each of these cards will continue to have an audience. Which card is better will change from person to person and will be impacted by factors like spending and budget.
- Comparing the Chase Sapphire Reserve℠ vs Chase Sapphire Preferred® Card
- Short-Term Comparison
- Should You Upgrade a Chase Sapphire Preferred® Card to the Chase Sapphire Reserve℠?
There are two ways of comparing the Chase Sapphire Reserve℠ to the Chase Sapphire Preferred® Card — looking at the long-term and short-term benefits. As you read this guide, keep in mind that it's most financially prudent and healthier for your credit score to base your decision primarily on the long-term value of each card.
In the long-term, cardholders who spend at least $2,750 each year on travel or dining will generally be better off with the Chase Sapphire Reserve℠. If you subtract the $300 annual travel credit from its $450 annual fee, it effectively reduces down to $150. At that point, it’s only $55 higher than what you pay for the Chase Sapphire Preferred® Card. If you spend $2,750 on travel with the Chase Sapphire Reserve℠ you’ll get $55 more in rewards than if you used the Chase Sapphire Preferred® Card. The same is true if you charge $22,000 to your card annually in non-travel and non-dining categories.
How to do the math: Take your combined annual travel and dining out expenses and multiply them by 0.02. Then, take all your other credit card charges and multiply those by 0.0025. If the sum of the two is greater than or equal to $55, the Chase Sapphire Reserve℠ is better for you than the Chase Sapphire Preferred® Card. Example: You spend $1,000 annually at restaurants and airfare. Also, you charge $15,000 to the card on other types of purchases. $1,000 x 0.02 = $20. $15,000 x 0.0025 = $37.5. The sum equals $57.50, so you should apply for the Chase Sapphire Reserve℠.
If you have authorized users on your account, the balance begins to shift in favor of the Chase Sapphire Preferred® Card. The math on this is tricky, so if you want to authorize another user on your account, we suggest reading the section below.
The following table summarizes the most important benefits and features of both cards.
|Chase Sapphire Reserve℠||Chase Sapphire Preferred® Card|
|Best if...||You spend at least $2,750 annually on travel and dining or $22,000 overall||You don't meet the spending requirements for the Chase Sapphire Preferred® Card, or you want to have multiple authorized users on your account|
|Annual Fee||$450||$0 Intro for the First Year. Then $95|
|Authorized User Fee||$75 per card||$0|
|APR||16.49%-23.49% Variable||16.99% - 23.99% Variable|
|Earnings Rate||3 points per $1 spent on restaurants and all travel; 1 point on everything else||2 points per $1 spent on restaurants and all travel; 1 point on everything else|
|Estimated Point Value||$0.0150||$0.0125|
|Bonus||50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening||50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening|
|Estimated Bonus Value||$750||$625|
|Other Benefits||$300 annual travel credit; Priority Pass Select Membership, TSA Pre/Global Entry fee reimbursement||-|
|Can you transfer points to Ultimate Rewards partners?||Yes||Yes|
|Network||Visa Infinite||Visa Signature|
The Chase Sapphire Reserve℠ comes with virtually all the benefits you’d get on the Chase Sapphire Preferred® Card. Both belong to the Ultimate Rewards program, and allow you to transfer your points to any of the participating loyalty programs — British Airways Executive Club, Korean Air SKYPASS, Singapore Airlines KrisFlyer, Southwest Airlines Rapid Rewards®, United MileagePlus®, Virgin Atlantic Flying Club, Hyatt Gold Passport®, Marriott Rewards®, IHG® Rewards Club and Ritz Carlton Rewards®.
The Chase Sapphire Preferred® Card doesn’t charge you any additional annual fee for having an authorized user on the account. The Chase Sapphire Reserve℠, on the other hand, charges users $75 for each additional card. Therefore, it gets a little trickier to figure out how much you have to spend annually for the extra cost to be worth it.
How Much Do You Need to Spend for the Chase Sapphire Reserve℠ to Be Worth It?
|Number of Authorized Users||Effective Fee Difference|
Above the first table, we walked through the math required to figure out which card is better for you based on the $55 effective fee difference. If you have an authorized user, you can work through the same steps to arrive at an answer. Just remember to replace the ‘$55’ with whatever your effective difference is.
Example: If you have one authorized user, your effective fee difference is $130. Imagine you annually spend $2,500 on travel and dining and $30,000 on everything else. $2,500 * 0.02 = $50. $30,000 x 0.0025 = $75. Because the sum of these two is just $125 (lower than $130), you'd be better off with the Chase Sapphire Preferred® Card.
Cardholders who can spend $4,000 in the first 3 months of account opening can qualify for the bonus on both cards. If that’s the case, the annual fee difference between the two cards becomes negligible for the first two years. The welcome offer on the Chase Sapphire Reserve℠ is worth $125 more than that of the Chase Sapphire Preferred® Card. Therefore, you will come out ahead for at least the first 24 months with the former.
Those who can’t qualify for the bonus should only consider the long-term benefits of each card.
Upgrading to the Chase Sapphire Reserve℠ can disqualify you from the 50,000 point sign-up bonus. Therefore, if you're committed to the new version, you should apply for the Chase Sapphire Reserve℠ as a brand new account, transfer the points from your Chase Sapphire Preferred® Card over to it, and then cancel your old card. There is no reason to keep both around. Anyone who doesn’t want to go through the hassle of opening and closing accounts can still do upgrade. However, since you won’t get the welcome offer for doing so, you need to consider the long-term benefits we discussed above.
Remember that, when it comes to credit cards, you are never limited to just two options. If you’re questioning the value the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve℠ have for you, it’s worth taking the time to explore other cards. We outlined two popular options which provide similar offers to the two Chase cards discussed above.
Premier Rewards Gold Card from American Express
The Premier Rewards Gold Card from American Express can be viewed as an upgraded version of the Chase Sapphire Preferred® Card. The card charges a higher annual fee — $0 for the first year, then $195. In return, it gives a $100 annual airline fee credit, and a better rewards rate on airline ticket purchases. Cardholders get 3x points for airfare purchased directly from airlines, 2x points at US restaurants, US gas stations and US supermarkets, and 1x points on other eligible purchases. All-around, the Premier Rewards Gold Card from American Express isn’t as good as the Chase Sapphire Reserve℠. However, because it has a substantially lower annual fee, some consumers may feel better about applying for it. This card may be especially good for people that won’t use the full $300 airline credit or airport lounge access on the Chase Sapphire Reserve℠.
The Platinum Card® from American Express
The Platinum Card® from American Express lies entirely on the other side of the credit card spectrum. This card doesn’t prioritize earning points and rewards, unlike all the other offers discussed in this article. Instead, paying the $550 annual fee unlocks a suite of luxury benefits. Users get access to airport lounges through Priority Pass Select, just like with the Chase Sapphire Reserve℠. Additionally, The Platinum Card® from American Express throws in access to Centurion Lounges. These are located in seven major U.S. airports and are of a higher quality than most other lounges. Cardholders also receive special promotions and perks. That includes things like complimentary gold status with Hilton and Starwood hotels, free Boingo Wifi hotspots, and the Platinum Dining® Program. A few months ago, cardmembers were also given a chance to purchase tickets to the sold-out Broadway musical Hamilton. Benefits like that aren’t easily translated to a monetary value. However, some consumers looking for luxury may find these types of benefits well-worth the $550 annual fee. While the Chase Sapphire Reserve℠ does include some premium perks, it still doesn’t fully match The Platinum Card® from American Express. You can see a more in-depth comparison between the Chase Sapphire Reserve℠ and The Platinum Card® from American Express here.
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