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It almost isn’t a choice! Chase Sapphire Preferred vs Chase Sapphire Reserve

It almost isn’t a choice! Chase Sapphire Preferred vs Chase Sapphire Reserve

If you decide to sign up for any of the credit cards listed here, please show some love and use my referral links!
Chase Sapphire Reserve - Earn 50,000 bonus points with Chase Sapphire Reserve. I can be rewarded too if you apply here and are approved for the card. Learn more.
Chase Sapphire Preferred - Earn 50,000 bonus points with Chase Sapphire Preferred. I can be rewarded too if you apply here and are approved for the card. Learn more.
Chase Freedom Unlimited - Earn a $150 bonus with Chase Freedom Unlimited. I can be rewarded too if you apply here and are approved for the card. Learn more.
Chase Freedom - Earn a $150 bonus with Chase Freedom. I can be rewarded too if you apply here and are approved for the card. Learn more.
 American Express Platinum - Earn 60,000 bonus points with American Express Platinum. This is a killer card.

 

The most recommended travel card and cornerstone of most points and miles strategy is the Chase Sapphire Preferred card. Its an Ultimate Rewards earning card which translates to loads of cool free travel. It’s recommended first because it only has a $95/year fee and its very, very worth it. Chase recently released a new flagship card with the Sapphire Reserve. This card is the ultimate Chase card and carries the $450/year fee to go with it. That will scare away most people, but it doesn’t need to. It’s not for everyone, certainly, but its more accessible than you think.

The decision between Chase Sapphire Preferred and Chase Sapphire Reserve doesn’t have to be super difficult. I’ll break it down for you quickly to shed some clarity on what you’re really looking at. Assume both cards have the same sign up bonus for the purpose of this post. I think you’ll be surprised at how you feel about the fees in the end.

Chase Sapphire Preferred -  $95/yr Annual Fee

-2pts/dollar on all travel related spend (Uber, tolls, hotels, parking, flights, etc) 
 -2pts/dollar on all dining related spend (restaurants, bars, etc)
 -1pt/dollar on everything else
 -Travel Protection like trip cancellation/interruption/delay, and baggage delay
 -No international fees
 -Primary car rental insurance
 -1.25 cent per point MINIMUM value when booking through Chase on points
 
 Chase Sapphire Reserve - $450/yr Annual Fee ($150 after $300 travel credit)

-3pts/dollar on all travel related spend (Uber, tolls, hotels, parking, flights, etc)
 -3pts/dollar on all dining related spend (restaurants, bars, etc)
 -1pt/dollar on everything else
 -Travel Protection like trip cancellation/interruption/delay, and baggage delay
 -No international fees
 -Primary car rental insurance
 -$300 yearly travel credit (first $300 you spend on travel is credited back to your account)
 -$85 TSA PreCheck fee reimbursal every 4 years
 -Airport lounge access via Priority Pass Select complimentary membership
 -Elite status with Avis and National Car Rentals
 -1.5 cent per point MINIMUM value when booking through Chase on points
 

Here’s the quick math on “breaking even” on the fees without taking into account any ancilllary benefits. That means earning enough points to cover the $95 fee. In it’s simplest form of 1 cent per point value (which we would never do, RIGHT??) that means you need 9,500 points on the CSP to break even. Since you are maximizing your points by using the right card for the right type of purchase, we’ll assume you are earning 2pts/dollar. That means you’ll need to spend $4,500 in dining, bars, travel, etc in the course of a year to break even. If you put all of your spend on this card then that’s even easier.
  
With the $450 fee on the Sapphire Reserve it looks like you’d need to spend $15,000 in food and dining at 3pts per dollar to get the points to break even. This is the big catch! That’s not the case. With the CSR you get credited back the first $300 you spend on travel annually. So that’s hotels, airfare, etc. This matters to you if you fly at least once a year and/or stay in hotels a couple times. That brings your fee down to $150. At 3pts per dollar that’s only $5,000 in spend on food and dining over the course of a year! 

SO here’s how I’d sum this up:

BREAK EVEN POINTS (with benefit summary): 

Chase Sapphire Preferred
 $95 fee equals 9,500UR points to cover
 Needed Spend: $4,500 at 2pts per dollar equals 9,500UR points
 -Travel Coverage
 -1.25 cent per point MINIMUM value when booking through Chase portal on points
 
Chase Sapphire Reserve
 $450 fee minus $300 travel credit equals $150 fee equals 15,000UR points to cover
 Needed Spend: $5,000 at 3pts per dollar equals 15,000UR points
  -Travel Coverage
 -Priority Pass Select for Lounge Access
 -Car Rental Elite Status
 -TSA PreCheck fee credit every 4 years
 -1.5 cent per point MINIMUM value when booking through Chase portal on points

 

That’s pretty eye-opening to me. The difference in spending $4,500 and $5,000 on food and travel over the course of an ENTIRE YEAR is virtually nothing. I’d bet thats a weekend of bar tabs on that one weekend trip where you make bad decisions. You know the one I’m talking about.  

It’s really hard to sell me on the CSR with this math in mind. If you don’t pay for at least $300 in travel each year AND you spend less than $5,000 on travel and dining in a year then the CSP makes more sense for you. I’m betting that will be a rare case. 

-Kade

 

 

Park Hyatt NYC Review - 4/26-4/29 2018

Park Hyatt NYC Review - 4/26-4/29 2018