Is the Chase Sapphire Reserve worth the increased annual fee?

Julian Kheel, CNN Underscored
Updated Thu January 16, 2020

CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. Sometimes we receive a commission through The Points Guy affiliate network if you apply and are approved for a card, but our reporting is always independent and objective.

The Chase Sapphire Reserve has been an extraordinarily popular credit card since it was first introduced in 2016. With the ability to earn 3 points for every dollar you spend on both travel and dining purchases, along with extra travel perks like airport lounge access, it's become a popular go-to credit card. However, Chase recently raised the annual fee on the card from $450 to $550 a year, a 22% increase.

With the higher annual fee now in effect for new cardholders (existing Sapphire Reserve cardholders will see the elevated fee the next time their card renews after April 1), it's fair to wonder if the increased annual fee is worth paying. Let's take a look at the pros and cons of the card — including some newly added perks — to see if the Sapphire Reserve should still have a place in your purse or wallet.

Original features of the Sapphire Reserve

The Chase Sapphire Reserve originally launched with a rich suite of benefits. The list starts with two prime bonus categories: 3 points per dollar on a very wide range of both travel and dining purchases. The card also comes with a $300 annual travel credit that works on those same travel purchases, a Priority Pass Select membership that gives you access to over 1,000 airport lounges around the world, and a credit of up to $100 when you apply for either the Global Entry or TSA PreCheck expedited security programs. None of these old benefits went away, so both new and existing cardholders get all these perks as well as the new ones.

The Sapphire Reserve also currently comes with a sign-up bonus for new cardholders. If you're approved for the card, you'll earn 50,000 bonus points when you spend $4,000 in the first three months after you open the account. Points earned with the Sapphire Reserve can be redeemed for travel through Chase Ultimate Rewards at a rate of 1.5 cents per point, or transferred to any of Chase's 13 airline and hotel partners for potentially even more value. Even if you just redeem the bonus points at 1.5 cents per point, that makes them worth $750 in travel, which on its own more than offsets the $550 annual fee for the first year.

New Chase Sapphire Reserve perks

Chase also added new benefits to the Chase Sapphire Reserve, and you'll get these additional benefits whether you're an existing Sapphire Reserve cardholder or just signing up now.

When it comes to earning points, the card added a new bonus category. Cardholders now earn 10 points per dollar on Lyft rides through March 2022, up from the usual 3 points earned for travel purchases (which includes rideshares).

Also on the Lyft front, the card now comes with one free year of Lyft Pink membership. Lyft Pink provides a 15% discount on all Lyft rides, along with priority airport pickups, up to three cancellation fee waivers each month if you rebook within 15 minutes, three free 30-minute bike or scooter rentals in select cities each month and other perks. Lyft normally charges $19.99 per month for Lyft Pink.

The Sapphire Reserve also added two new benefits linked to the DoorDash food delivery service. Cardholders receive $60 in annual DoorDash credits for both 2020 and 2021, along with up to two years of free DashPass membership. DashPass offers free delivery fees and reduced service fees at select restaurants, and normally costs $9.99 per month.

Value of the Sapphire Reserve's benefits

Let's be frank: $550 is a lot to pay for a credit card. The 50,000-point sign-up bonus is worth $750 in travel (and possibly more), which makes the first year a no-brainer. But what about the second year and beyond? Some people will be able to take advantage of all the card's features, but not everyone. And while the Chase Sapphire Reserve is a popular card, it's not worth it if you can't use its perks.

The $300 travel credit is relatively easy to utilize. It covers not just airfare, hotel rooms, car rentals and the like, but also daily travel expenses such as transit costs, tolls, taxis, rideshares and even parking. Assuming you use the entire $300 travel credit, that brings the effective annual fee on the Sapphire Reserve down from $550 to $250, a significant drop.

The question then is whether the rest of the card's features and benefits are worth $250 a year. If you already use DoorDash or can do so without making major changes in your lifestyle, that's another $60 a year in value. The free delivery fees that are part of the DashPass membership are a little harder to calculate, but if you normally use DoorDash, you'll see a few bucks in savings there as well.

If you're a regular Lyft rider, you'll also get some use from the Lyft Pink membership, as well as the additional 7 points for every dollar you spend on Lyft. Again, it depends on how much you use Lyft, but regular or heavy users of the rideshare service should be able to score a couple more dollars in savings.

The $100 application fee credit for either Global Entry or TSA PreCheck is useful, but since membership in those programs is good for 5 years, it comes to $20 a year once you prorate that $100 over 5 years. Also, many other credit cards feature the same Global Entry/TSA PreCheck rebate, so it's not as useful to you if you already have the same $100 credit with another card (though keep in mind you can use this credit for the application fee of a friend or family member if you already have your own Global Entry or TSA PreCheck membership).

It's impossible to put a precise dollar amount on the Priority Pass Select airport lounge membership, as you might use this benefit once a year or fifty times a year. If you paid for these lounge visits individually using a "pay as you go" Priority Pass membership, they'd cost you $32 a visit plus $99 for the year (or you could pay for a $299 membership that includes the first 10 visits). But at those prices, you're almost certainly better off just getting the Sapphire Reserve or another credit card with Priority Pass access if you want lounge access instead of paying for a membership.

Is the Chase Sapphire Reserve a good credit card for you?

Add all of the above benefits together and if you use each of them at least a few times a year, you're likely getting your $250 worth. But let's say you only use half of them, meaning you only get $125 in value from the card's perks. How much would you need to spend on the card in a year to make up that remaining $125 in extra points?

The best flat-rate cash back card currently on the market earns 2% cash back on all purchases with no annual fee. Each point earned with the Chase Sapphire Reserve is worth at least 1.5 cents apiece when redeemed directly for travel via Chase Ultimate Rewards, meaning you're getting 1.5% in travel redemptions on all purchases you make, and 4.5% on travel and dining purchases since you earn 3 points per dollar in those two categories. So if you spend $2,000 a month overall on your credit card and one-third of that is on travel and dining, you'd earn $120 more in rewards in a year than you would with a 2% cash back card, which is almost the entire remainder of the annual fee. Spend more than that each month in travel or dining and you're coming out ahead — spend less than that and the card is costing you more than it's worth.

Sapphire Reserve or Sapphire Preferred?

If you're looking for a Chase travel credit card but don't want to pay a high fee, there's another option. The Chase Sapphire Preferred Card doesn't come with all the fancy perks or the $300 travel credit. It only earns 2 points for every dollar you spend on travel and dining instead of 3 points, and 5 points per dollar for Lyft rides through March 2022. But it only costs $95 a year, so it could be a better fit for your budget.

The Sapphire Preferred also has a sign-up bonus, and it's even higher than the Sapphire Reserve — you'll earn 60,000 bonus points when you spend $4,000 in the first 3 months after you open the card. If you only have the Sapphire Preferred, the points are worth 1.25 cents apiece when redeemed for travel instead of 1.5 cents each, meaning those 60,000 points are worth the same $750 even though there's more of them. But you can transfer them to the same 13 airline and hotel partners as the Sapphire Reserve, which makes the points just as flexible no matter which of the two cards you decide to carry.

Not sure which card is right for you? You might consider signing up for the cheaper Chase Sapphire Preferred to start since it has a higher bonus, and then converting to the Sapphire Reserve after the first year. You won't get all the perks of the Reserve in Year #1, but you'll pay a lot less and can take that time to consider whether paying for the extra perks makes sense. If you do end up converting to the Reserve in Year #2, any points you earned with the Preferred that you haven't already used — including the sign-up bonus — will be redeemable for travel via Chase Ultimate Rewards at 1.5 cents each once you have the Reserve in hand. (Note that you can't get a second sign-up bonus for converting from one card to the other.)

Our recommendation

It all comes down to how much you'll utilize the benefits of the Chase Sapphire Reserve. if you don't take a lot of Lyft rides, the new Lyft features won't be of value to you. If you don't fly much, you won't need airport lounge access very often. And if you live in an area without DoorDash service, you won't see any benefit from having a DashPass membership or credits. That's why it's important to consider how many features of a credit card you'll actually use when deciding if it's right for you. But if you do see yourself using some or all of these features, or spending a significant amount of money each year on travel or dining purchases, the math can work out in your favor.

In our opinion, the sign-up bonus makes getting the Sapphire Reserve an easy decision for the first year for anyone who spends money on travel, since those 50,000 bonus points are so valuable. After the first year, you can take stock of how you used the card and its benefits to decide if the $550 annual fee is worth it for another year. If it isn't, you can call and cancel the card within 30 days of being charged the second year annual fee, or convert your Sapphire Reserve to a Chase Sapphire Preferred and pay the lower $95 annual fee for the second year and beyond. Or if you're unsure about the perks or know you won't use them right now, click here to learn more about the Chase Sapphire Preferred with its lower $95 annual fee, get its higher sign-up bonus and consider converting up to the Sapphire Reserve after the first year is over.

Finally, if you're already struggling with debt, now is not the time to go out and get an expensive travel credit card. Get your financial house in order first — then you can explore the world of credit card rewards. But if you're in solid financial shape and have been considering whether a premium travel credit card is a good choice, take a look at the Chase Sapphire Reserve and see if it fits your needs.

Click here to learn more about the Chase Sapphire Reserve
Click here to learn more about the Chase Sapphire Preferred

Editorial Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.