The Plan For Our $450 Annual Fee Chase Sapphire Reserve Cards

Just over a year ago, Becky and I were both approved for shiny new Chase Sapphire Reserve (CSR) credit cards. Each new card came with a hefty $450 annual fee (not waived), but that fee was offset by a generous 100,000 point signup bonus and $600 in travel credits over the first cardholder year.

Technically, neither of us should have been eligible for the card given Chase’s “5/24” rule, but I jumped on the leaked application link that wasn’t enforcing it and Becky ended up being pre-approved for the card in branch not too long after.  Despite the high annual fee, the CSR might take the top spot for most value provided over the first year out of all 60+ credit cards we’ve ever opened!

Now that the first year is up, we have an important decision to make: Do we keep the card, downgrade it, or cancel it now that the annual fee is due?  Let’s dive into what we’re thinking about for year 2 and beyond.

Note: The First Year Value Has Changed Significantly


In the first year of holding the CSR cards, we’ve come out WAY ahead.  The 200k Chase Ultimate Rewards (UR) points are worth at least $3k towards travel and the $1,200 in travel credits (as good as cash to us given how easy they are to redeem) more than offset the $900 in annual fees.

Unfortunately for anyone who didn’t apply for the card in the first 6 months or so of it being released, that first year value has since changed for the worse.  First, the signup bonus was lowered to 50k points for the same minimum spend ($4k), then the travel credit timing was changed to make it much more difficult to double up on it during the first year.  On top of that, it’s no longer possible for the same person to get both the Sapphire Preferred and the Sapphire Reserve cards.  This was a popular strategy for people new to the game up until recently.

Despite those changes, it still makes sense for some, especially frequent travelers, but it’s not the slam dunk of value it used to be for everyone.

Let’s look at the more important ongoing benefits of the card which will weigh heavily in our decision to keep, cancel, or downgrade the card.

The Ongoing Benefits of the CSR

NOTE: I’m going to focus on the benefits that are most important to us, so this will not be comprehensive list of all the benefits the card has (which are numerous, but sometimes very niche).

In our decision to what to do with the cards, there are 3 major benefits I would be hesitant to lose by getting rid of both of our CSR cards:

  1. The ability to transfer UR to travel partners
  2. The ability to redeem UR at 1.5 cents each towards travel
  3. Priority Pass Lounge Access with unlimited free guests

There are also a few minor benefits we’re keeping in mind:

  1. Very good trip delay/cancellation benefits
  2. 3x UR Earning on All Dining and Travel purchases

And finally, some other benefits that we just don’t care about (but you might!):

  1. Global Entry or TSA Precheck Fee Credit (we already have global entry and more credits than we need)
  2. Primary Rental Car Insurance (this is provided through our regular auto insurance, at least in the US)

You might notice a big “benefit” that I left out of the above lists: the $300 travel credit!  This was deliberate because, as I mentioned above, it’s pretty much as good as cash to us and I plan to simply subtract it out of the annual fee in the comparison below.  So now we have to decide if the benefits above justify the adjusted annual fee.

The Easy Decision – Downgrade One of the Cards

What’s important to note about all the benefits above is that both my wife and I can benefit from any of them simply by one of us having the Reserve card!  For that reason, there’s no reason I can think of for us to pay the annual fee on both.

UR points can be freely transferred between members of the same household, so we get the extra redemption options regardless of who earns them on what card.  Plus, we (mostly) travel together everywhere, so either one of us having lounge access means we both get lounge access.  Same goes for the trip delay/cancellation benefits and the 3x earning, we just have to use whichever card we end up keeping.

This first easy decision has already been put into motion and I recently downgraded my CSR to a Freedom Unlimited card with no annual fee.  I chose the Unlimited card because I already had regular Freedom card for 5x quarterly bonus categories and we often don’t max those out anyway.  The Freedom Unlimited earns 1.5 UR/$1 spent on all purchases, which translates to at least 2.25% back if we have a CSR card available to redeem them with.  Not a bad option if we’re not currently trying to hit a minimum spend.

That takes care of the first card, but now we have a tougher choice to make.

The Hard(er) Decision – $150 vs. UR Redemption Flexibility

With a $450 annual fee that’s offset by the $300 annual travel credit, we’re looking at a cost of $150 to take advantage of the benefits above for another year.  Let’s add a little more detail to my thoughts on each benefit:

  1. The ability to transfer UR to travel partners
    • While all of Chase’s flagship cards earn Ultimate Rewards, only the ones with an annual fee allow you to transfer to travel partners.  In fact, for the 350k+ UR we’ve already earned and redeemed, every single one was transferred to a travel partner first.  Southwest has gotten the majority while United, Hyatt, and British Airways have also gotten their fair share of transfers, each of which came out ahead of the 1.5 cents in value we can get by booking directly with Chase.  As we still have over 100k UR left to use, I don’t want to give up this benefit just yet (or speculate by transferring before we are ready to book something).  One important note is that this same benefit exists on both the Sapphire Preferred and Chase Ink Plus/Preferred cards which have a lower $95 fee, so this benefit alone doesn’t justify keeping the CSR.
  2. The ability to redeem UR directly at 1.5 cents each
    • If I just spelled out that every single UR we’ve used has been with travel partners, why do I care if I can book at 1.5 cents?  The answer to this question lies in our upcoming plans for next year, specifically the year long road trip we plan on taking across the US after quitting our jobs!  Flights will be minimal during the year and can be covered by our existing miles balances across other programs, so we’ll most likely be looking to maximize their value towards hotels.  Using the Hyatt transfer option may will work well for this, but they have a limited footprint compared to other brands.  Chase’s other main hotel partners, IHG and Marriott, typically aren’t worth the 1:1 transfer ratio.  My theory is that since we’re likely to be covering hundreds of hotel nights next year with a combination of points and cash, there will probably be an opportunity where 1.5 cpp makes sense, particularly at non-chain hotels.  Time will tell on this one.
  3. Priority Pass Lounge Access with unlimited free guests
    • While we love utilizing the various airport lounges when we travel, this next year will not have a lot of airport travel.  It will be nice during the couple of times we’ll end up in the airport and may very well be worth the $55 premium over the other chase cards with benefit #1 above.  Of course, we often have at least one Amex Platinum between us, so that could cover our lounge needs anyway.  This particular benefit probably wouldn’t sway me either way.
  4. Trip Delay/Cancellation Benefits
    • This is an oft-cited reason that people plan to keep the CSR open, but I don’t think we’ll get a lot of use out of it in the next year.  It would be great if it worked on ALL types of travel, but unfortunately a year-long road trip is not one of the “trips” that it works on.  It may come in handy the couple of times we end up traveling by plane, but other credit cards we have also contain similar benefits, even if they aren’t quite as generous as the CSR.  Once again, not a major factor.
  5. 3x UR Earning on All Dining and Travel purchases
    • Normally, I have no interest in bonus earning categories because we try to put almost every dollar we spend towards signup bonuses.  The return on each $1 of minimum spend is often 10% or more!  However, I’m not convinced it will be easy to maintain our success with new credit cards and shifting between them as we travel across the country for a year.  Yes, I still plan to apply for new cards, but we will be limited to how often we can actually receive them and may have trouble getting approved with minimal to no income.  With that in mind and the fact that the vast majority of our spending the next year will fall into the Travel and Dining categories means we might get a lot of use out of the 3x earning.  Keep in mind, because each point can be redeemed for 1.5x, we will essentially be earning 4.5%+ back on a lot of our purchases.  This might be the swing vote we need in favor of keeping the card.

To break down the key point, we definitely want to keep a premium Chase card open, but it doesn’t necessarily have to be the Reserve Card.  If we rule out speculatively transferring the points ahead of time, having this option should be worth at least $500 given that we plan to redeem 100k+ UR in the next 12 months.  So now we have to justify the $55 premium that comes with keeping the CSR open versus downgrading to something like the Sapphire Preferred card which offers the same benefit.

If we rule out the benefits of 1.5x direct booking, trip delay/cancellation, and lounge access (which do have some value to us), we’re left with the 3x bonus earning versus $55.  Let’s do a little math.

The Chase Sapphire Preferred card also has bonus earning on dining and travel, but at 2x instead of 3x.  If we assume each UR is worth 1.5 cents via travel partners (which is conservative), we would need to earn an extra 3,667 UR to justify the $55 annual fee difference.  That means we would have to spend $3,667 on travel and dining in the next 12 months.  Considering we will be staying in a lot of hotels and eating out for a good portion of our meals, I don’t think this will be a problem for us.

So there you have it, assuming we spend $4k+ on travel and dining (that isn’t put towards new minimum spends) in the next year, it looks like keeping a CSR open is the right move for us.  The additional benefits of the 1.5x direct booking, lounge access, and more are just gravy on top.

Your Own Decision May Be Different!

I can’t tell you whether or not you should keep the Chase Sapphire Reserve open because I don’t know your specific spending and travel habits!  If you never travel and only redeem UR towards Gap gifts cards (please don’t do that…), then it probably makes no sense for you to keep it open.  On the other hand, maybe you can get some benefit out of Global Entry credit or some of the benefits that I didn’t even mention, every situation is different.  Don’t forget to keep in mind any other cards you already have open (or plan to open) as well, maybe you would prefer to earn 3x on travel via the Citi Prestige card instead.

My advice would be to take a look at your existing UR balance, your plans for that balance, how you would use the benefits of the card, and alternative ways to get the same (or similar) benefits through other means.

If you told me 3 years ago when I first discovered this “travel hacking” credit card thing that I would be willingly paying a $450 annual fee I probably would have thought you were crazy.  I didn’t always realize the value of these high annual fee premium cards you know

Hopefully breaking down my own thought process to what to do with a credit card when the annual fee comes around has been helpful.  I go through similar (although much more brief) steps to make the decision for each and every credit card we own every time an annual fee comes up.  The CSR is one of the very few that have proven out to be worth the fee beyond the first year.

Best of luck on your own decision if you happen to be a proud owner of a Sapphire Reserve card that has an annual fee coming up soon!


P.S. If you do decide to downgrade the card, you might be interested in the following post on Points Yak.  There’s no guarantee it works (read through the comments), but depending on what month your annual fee comes up in, it might be worth a “free” couple hundred dollars.  I chose not to attempt it, so do so at your own risk:

Points Yak – Don’t Downgrade Your Chase Sapphire Reserve. Not Yet, Anyway.

7 thoughts to “The Plan For Our $450 Annual Fee Chase Sapphire Reserve Cards”

  1. The CSR is a great card and I plan on keeping it and the Amex Bus. Plat. Both are expensive, but both are my opportunities for Ultimate Rewards and Membership Rewards.

    I suggest you keep one CSR and downgrade other to Ink. Particularly if you cannot get another Chase card.

    1. You’re right about the combo but not the path… You can’t product change a personal card (CSR) to a business card (ink). CSR+ink cash+freedom is quite a strong combo. As to which freedom, depends on tolerance for complexity. We choose to use two traditional freedoms and Max most quarters at 5x.

      Our household fallback remains a boa travel rewards but freedom unlimited is better for most.

    2. As far as I know, it’s not possible to downgrade a personal card to a business one. I do already have the Ink Cash, so we’re set there anyway, the 5x on phone/internet is definitely nice.

  2. We went with picking up some new cards and let the reserve go. We picked up an Amex Platinum for lounge access and a Marriott premier for Chase purposes. Then again we already use up the points.

    1. Were you able to get a 100k MR signup bonus for the Platinum? I think that’s the only way I would recommend it over the CSR for most people. The higher annual fee and lower, harder to use travel credit are big downsides when comparing the two. Plus, I’ve found UR to be more valuable, but that could probably be debated.

  3. Really good analysis, you hit a lot of stuff I hadn’t though of. Very easy to read and understand too, it’s a lot of detail to organize.

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