Chase finally launched the much-rumored Sapphire Reserve credit card this week with a huge sign-up bonus of 100,000 Ultimate Rewards points after you spend. It also confirmed the benefits this card will offer. (HT to Miles to Memories) Despite being a flagship product, this is actually its second Visa Infinite-branded card since the updated Ritz-Carlton card launched last week. However, one rumored benefit — a $100 discount on companion airfare when booking travel for two people — is not being offered. (HT to Doctor of Credit)
Card Benefits and Analysis
Here are the benefits and terms of the current offer. There don’t appear to be any working links at the moment (some were briefly working on Monday), but it should be available no later than August 21.
- 100,000 Ultimate Rewards points after spending $4,000 in the first 3 months
- $450 annual fee (not waived the first year)
- $300 annual statement credit for flights and hotels charged to your card
- Earn 3X points on travel and dining, and 1X points on everything else
- Redeem points for 1.5 cents each when booking travel through the Ultimate Rewards portal, or transfer to one of several outside travel loyalty programs
- Priority Pass Select membership (access for additional guests is unclear)
- $100 credit for Global Entry application
- Primary insurance coverage for car rentals
Overall I think the Reserve is still a big step up and and a preferable choice to the existing Chase Sapphire Preferred card. My reasoning is that most people get the Preferred card for the 2X points on all travel and dining, as well as the flexible and nearly instant transfers to a variety of good travel partners such as United, Hyatt, and Southwest. You can also redeem points at a value of 1.2 cents each for just about any flight if you don’t want to worry about limited availability from third-party rewards programs.
The Reserve card offers 3X points on travel and dining and the chance to redeem points at a value of 1.5 cents each, so you can get 50% more points that are potentially 25% more valuable. (The points are just as valuable as before if you still prefer to transfer them somewhere else.)
Because I value Ultimate Rewards points at about 2 cents each, the potential return on each purchase with the Chase Sapphire Reserve is 6%. That compares to 4% with the Sapphire Preferred, and both are much better than the proliferating number of cash back cards that offer 1.5-2%. Someone who spends $12,000 a year ($1,000 a month) on travel and dining could expect to earn $720 in rewards. I know others who spend much more.
Yes, the new card has a higher annual fee of $450 instead of just $95 for the Sapphire Preferred, but a $300 annual travel credit brings this down to $150 net. I think most frequent travelers will be able to earn a lot more miles and points in return for that extra $55. The bigger issue will be qualifying. As a Visa Infinite card it can require a very high credit limit. I’ve seen reports of a minimum $10,000 to $15,000 credit line, which could require closing existing cards or moving credit lines around if you’re not immediately approved. Chase also has a rule that makes it difficult to apply for a new card if you’ve had five new cards in the last two years, although early reports suggest this card may not be subject to that limit. (Similarly, The Ritz-Carlton card seems to be exempt.)
No $100 Discount on Companion Airfare
The biggest disappointment is that the card does not come with a $100 discount on companion airfare, which is normally a benefit of Visa Infinite cards. Although who know’s what’s “normal” when there are only three Visa Infinite cards offered in the entire U.S. market? Anyway, many people were looking forward to this. I don’t think the lack of a companion airfare discount is a reason to avoid the card. I still look forward to the opportunity to earn more Ultimate Rewards points on regular purchases, and that’s why I think I will prefer this card going forward.
Updating My Analysis on Sapphire Reserve vs. Ritz-Carlton Cards
You may want to go back and consider The Ritz-Carlton card instead if the companion airfare discount is your primary goal. Just yesterday I wrote a post about why you should not apply — or at least wait until we had more information about each offer. My post was based on the rumors available at the time, and with new information the arithmetic changes. I still remain convinced that some benefits, like upgrades and resort credits, are not relevant to travelers who don’t book paid stays at The Ritz-Carlton. I also remain convinced that the Sapphire Reserve card offers more long-term value if you seek to earn points for award travel rather than pay for flights.
One strategy, if you can swing it, is to apply for both cards. You can use The Ritz-Carlton card to book flights for two and get the $100 companion discount and pay for stays at Marriott and The Ritz-Carlton hotels. However, the Chase Sapphire Reserve will still be a better card for all other travel and dining expenses, including flights booked for an individual passenger and stays at other hotels.