Without the 100k Bonus, Is the Chase Sapphire Reserve Still Worth It?

Update 6/12/17: The Chase Sapphire Reserve travel credit renews each cardmember year. Read this post to find out if you should apply for the Chase Sapphire Preferred or the Chase Sapphire Reserve.

The Chase Sapphire Reserve was launched in late 2016 with a 100k Ultimate Rewards (UR) point bonus and caught fire among travel addicts. The promotion ended on March 12, 2017, dropping the bonus t0 50k UR (requiring the same $4,000 in minimum spend in the first three months to get the bonus).

For monetary perspective, 100k points can be redeemed for $1,000 in cash (via a statement credit), $1,500 in travel (via the Chase travel portal), or $2,000 in travel (via transfer partners). From a cash perspective, you’re now looking at a $500 statement credit.

My prediction is that the 100k bonus is gone forever. My reasoning is that Chase launched the Chase Sapphire Preferred with a 100k bonus and had subsequently dropped it to 50k — where it’s stayed. The only exception to this rule was for Chase Private Clients, where the bonus has occasionally jumped to 75k (Private Client status typically requires at least $250,000 in assets with Chase).

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Is the Chase Sapphire Reserve Worth It with a 50k Bonus?

In short, yes. As long as you can take advantage of the sign-up bonus and the $300 travel credit, it’s still very worthwhile for the first year.

 If you’re curious if it’s worth it for your specific situation,  you can go here and modify the green cells .

If you’re curious if it’s worth it for your specific situation, you can go here and modify the green cells.

Find out the value you’ll get by modifying the green cells.

How to Use the Calculator

To use the calculator, click “File” (top left) > “Make a copy” or “download as Excel” and modify the GREEN fields.

There are two separate columns for Year 1 and Year 2 because of the signup bonus. Every year following Year 2 is effectively the same, save for Year 5 where the $100 Global Entry credit will come into play again.

Application date

At the top, there’s an application date. It’s coded for today’s date, but you can change it to when you applied. Remember, the clock for the minimum spend starts when you get approved, and not when you receive the card.

Sign up bonus

If you sign up for a new card and spend $4,000 in the first three months, you’ll receive 50k Ultimate Reward (UR) points. Depending on how you redeem the points, the value of these points can range from $500 to $1,000.

You can redeem your UR points for a statement credit — effectively for cash — at a rate of 1 cents per point (1 CPP). Here, 50k UR points equate to $500 in value. This is useful if you want to apply the bonus to other purchases you’ve made with the card.

If you’re a traveler, you can use the Chase Travel Portal and get 1.5 CPP, meaning that your 50k points are worth $750 in flights or hotels.

If you consider yourself a travel hacker — or you’re willing to do some legwork — transfer partners usually yield the most value, at 2 CPP. This means that your 50k points are worth $1,000 in travel. Here, you’re transferring your points at a 1:1 basis (for example to United) and redeeming it. The reason for the increase in value is because the point costs typically remain constant, despite seasonal flight demands.

For this method, upgrading to first class or business class is cheaper than with money. For example, San Francisco to Asia might typically cost (round trip) $1,000 in economy and $3,000 in business, and $8,000 in first class. With United points (that you would get by transferring your UR points), the round trip cost is 80k (economy), 140k (business), or 160k (First). Yes, you’re paying 2x the cost (80k vs. 160k), but with cash, you would be paying 8x the cost.

Even at 50,000 points, the sign-up bonus, regardless of how you use it, is a big reason why you should get the Chase Sapphire Reserve. You’re still breaking even if you redeem it for cash.
Need some inspiration on how to meet minimum spend? Check out our video about seven everyday ways to meet the minimum spend:

3x on travel and dining

Enter how much you spend on travel and dining every year.

Transactions that have merchant codes for travel and dining will yield 3x UR points. At a minimum, this is 3% back; optimistically, this is 6% back.

The only cards that provide similar levels of value are the Chase Freedom (5x back on quarterly categories) or the Discover It (similar 5% back on quarterly categories with “Cashback Match” in the first year making it 10% back).

1x on everything else

For normal transactions, you get 1x the points. If you spend $100, you’ll get 100 points. To calculate this, look at your previous statements to see how much you use on non-category spend per month. Multiply that number that by 12 and plug into the calculator.

How would you redeem UR points? (Put an “X” on only one choice)

Minimum: If you plan to redeem your points for a statement credit, basically cash.

Ideal: If you book travel using the Chase Ultimate Rewards Portal, you’ll get 1.5x the value (so 50k UR is $750).

Optimistic: Transfer partners will yield 2x the value (so 50k UR is $1,000).

$300 travel credit

Chase provides you with a statement credit for items that code as travel, up to $300 per the cardmember year.

If you decide that this card doesn’t make sense in Year 2 (or beyond), you can do a product change to a no annual fee card like the Freedom or Freedom Unlimited. I always recommend product changes instead of canceling because it protects your credit history (specifically, the average age of accounts).

$100 Global Entry credit

The Reserve provides you with a $100 credit to cover your Global Entry costs every five years. Depending on if you value Global Entry, this can easily save you $100.

This is tricky because a lot of competing cards may offer you Global Entry credit as well, so the relative value varies depending on how much you value it.

Priority Pass Select (airport lounge access)

How do you value Priority Pass? If you were to get it independent of Chase, the pass retails for $399/year for the Prestige level. Additional guests have to pay $27.

With Priority Pass Select with Chase, it’s free, and you can take unlimited guests into the lounge. I usually value each visit at $10 because that’s how much I would be willing to pay for free drinks and snacks.


Other Chase benefits

A bit subjective, but how much do you value things like collision damage waiver, travel insurance, and extended warranty?

It varies for everyone because depending on the cards in your wallet; you might have other cards that offer the same perks.

For me, I value the other Chase benefits at $100 because the Chase Sapphire Reserve acts as primary collision damage wavier and as opposed to other cards that offer 12-hour trip delay insurance, the Reserve kicks in after 6 hours. Hopefully, I won’t ever have to use trip delay insurance, but if I do, then I get $500 in food and lodging.

If keeping the card after the first year doesn’t make sense for you, consider doing a product change.
 

Examples

In case you wanted some inspiration, we have a few examples!

Frugal Frank

Frugal Frank is saving for an apartment and doesn’t like spending unless it’s necessary. He’s spending enough to hit the signup bonus but not much more. He’s redeeming the UR points for a statement credit (effectively cash) since he doesn’t like the idea of paying an annual fee.
In Year 1, he comes out ahead, but in Year 2, the expected value of the card drops dramatically. In a case like this, I would recommend product changing the Reserve to a Freedom (no annual fee, 5x quarterly categories) or Freedom Unlimited (no annual fee, 1.5x on all purchases), after Year 1.

Year 1 = $820 net value
Year 2/3/4 = $20 net value

Normal Norman

Norman spends about $10,000 a year on travel and dining and another $2,000 on other expenses. He’s using the Chase travel portal for the sweet 1.5x back. He’s using up most of the other travel perks because, why not right?

He gets enough value from the card that it’s a keeper card.

Year 1 = $1,780 net value
Year 2/3/4 = $630 net value

Traveler Tracy

Tracy loves traveling and considers herself a travel hacker. She milks her card for every perk it’s got. She uses transfer partners to maximize value and values Priority Pass and the Chase perks highly.

For her, it’s her go-to card, and it’s worth every cent of the annual fee.

Year 1 = $3,350 net value
Year 2/3/4 = $1,950 net value

Bottomline

If you’re not getting positive value from your current card, it’s probably time to replace it with a better one.