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Why I’m planning to cancel my Chase Sapphire Reserve credit card

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The Chase Sapphire Reserve® made headlines last week when Chase announced an annual fee increase of $ 100, from $ 450 to $ 550. The news made current and potential contestants guess whether the popular card was still worth it.

Potential cardholders had four days to apply for the card before the fee hit $ 550 on January 12, 2020. Meanwhile, existing cardholders can renew at $ 450 for another year if their renewal date is. before April 1, 2020. Any renewal after this date incur the new fee of $ 550.

Chase added new DoorDash and Lyft perks to help offset the rising fees, but many consumers weren’t sure if the new perks made up for the fees. And if you don’t use either service frequently, that may not be enough to offset the cost of the annual fee. This is the problem that I face personally.

Below, I explain why I plan to cancel my Chase Sapphire reservation before I’m billed for the annual fee increase next year.

Chase Sapphire Reserve®

  • Awards

    Earn 5X the total points on air travel and 10X the total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $ 300 has been spent on travel purchases each. year. Earn 3X points on other trips and meals and 1 point for every $ 1 spent on all other purchases plus, 10X points on Lyft trips through March 2022

  • Welcome bonus

    Earn 50,000 bonus points after spending $ 4,000 on purchases in the first 3 months after opening the account

  • Annual subscription

  • Introduction APR

  • Regular APR

    Variable from 16.99% to 23.99%

  • Balance transfer fees

  • Foreign transaction fees

  • Credit needed

Here’s why I’m planning to cancel my Chase Sapphire reservation

I had been considering opening the Chase Sapphire Reserve for at least a year before submitting an application two weeks ago, before learning that the annual fee would increase.

Initially, I justified paying the annual fee of $ 450 because I liked the generous welcome bonus of the card, and intended to take full advantage of the $ 300 annual travel credit and credit. $ 100 for the Global Entry or TSA application fee. Together, these perks were worth more than $ 450. But after the annual fee increased, I wanted to analyze the numbers to find the long-term value of the card, depending on how I plan to use it.

Here is a breakdown of the approximate value of each benefit that could easily receive a dollar amount.

Welcome bonus

I qualified for a welcome bonus of 50,000 bonus points after opening my card. The current welcome bonus is also 50,000 points when you spend $ 4,000 on purchases in the first three months. This is worth up to $ 750 for one trip when you redeem through Chase Ultimate Rewards®, as points are worth 50% more when used this way.

Keep in mind that the welcome bonus is a one-time offer. So you can’t rely on this to offset the annual fee after the first year.

Cardholder value: Up to $ 900 for the first year (with current bonus).

My value : $ 750 the first year, as I plan to redeem for maximum value.

Annual travel credit

The Sapphire Reserve offers a generous annual travel credit that can be used to offset the cost of travel, from airline tickets and hotels to tolls and rental cars.

Cardholder value: Up to $ 300 per year.

My value : $ 300 each year, I plan to maximize this credit to cover vacation expenses, as well as daily expenses like tolls.

Global Entry or TSA PreCheck Credit

Cardholders receive an application fee credit for Global Entry ($ 100) or TSA PreCheck ($ 85) every four years. It is generally recommended to apply to Global Entry rather than TSA PreCheck. For just $ 15 more, Global Entry gives you access to both.

Cardholder value: Up to $ 100 every four years.

My value : $ 100 every four years, I already have TSA PreCheck which doesn’t expire for a few years, but I will ask Global Entry. But after the first year, it will be another four years before I can take advantage of this credit again.

Priority Pass Select subscription

This benefit provides access to more than 1,000 airport lounges around the world after a single registration.

Cardholder value: $ 429 per year.

My value : $ 0, as I only fly once or twice a year and often from terminals that do not have Priority Pass lounges.

Advantages of DoorDash

DoorDash benefits are worth up to $ 320 combined:

  • DoorDash Credits: $ 120 statement credit ($ 60 in 2020 and $ 60 in 2021).
  • DashPass membership for a minimum of one year and up to two years: Up to $ 200, depending on the activation date (no later than December 31, 2021).

If you use delivery services like DoorDash, a free DashPass membership can be a nice bonus, providing free delivery and reduced service fees to hundreds of restaurants for orders of $ 12 or more. And if you’re currently using a competitor, like Seamless, GrubHub, or Postmates, that may be enough to convince you to switch services.

But that’s not the case for me. I don’t use food delivery services, so this perk is not a perk that I’m particularly excited about. Granted, I won’t turn down the “free” money, so I already signed up and used about $ 20 of the DoorDash credit on an ice cream order. I’ll probably spend up to $ 60 on credit to take full advantage of this benefit and only use restaurants that are eligible for DashPass to keep fees low.

It is also important to note that these benefits are valid for up to two years – there is currently no indication that they will be renewed. This means that you shouldn’t be banking on these perks to offset annual fees each year because, from now on, they are temporary.

Cardholder value: Up to $ 320, which equates to $ 160 in 2020 and $ 160 in 2021.

My value : $ 320, or $ 160 in 2020 and $ 160 in 2021.

Lyft Benefits

Cardholders can earn 10X points on Lyft purchases through March 2022 and can also qualify for one year of free Lyft Pink membership. Lyft Pink is worth $ 19.99 per month and includes 15% off car rides, relaxed cancellations, priority airport transfers, up to three free 30-minute bike and scooter rides per month and more.

Much like the DoorDash perks, Lyft Pink membership is only for a limited time, so you shouldn’t be relying on it to offset annual fees in the long run.

Cardholder value: $ 239 for one year.

My value : $ 0 because I rarely use carpooling. I will register, but I do not intend to use this service.

At the end of the line

Total value of the holder: Up to $ 2,128 in the first year, assuming you earn the welcome bonus; up to $ 889 the second year; and up to $ 729 in other years (not including Global Entry / TSA PreCheck every four years worth $ 100).

My total value: $ 1,310 the first year; $ 460 the second year; and $ 300 in other years (not including the Global Entry credit every four years valued at $ 100).

Cardholders who take full advantage of all the benefits of the card can more than make up for the annual fee, but when I do the numbers it is clear that I am missing $ 90 to $ 250 to recoup the fee after my first year. opening an account. And when I consider how much I’ll use the card (around $ 4,000 per year), that only works out to around $ 180 in rewards when redeemed through the Ultimate Rewards® portal.

If you match my profile, you might feel the same way and consider canceling your Chase Sapphire Reserve. Experts generally don’t recommend canceling your credit card as it can negatively affect your credit score. But paying a high annual fee that isn’t worth it can be an exception. (Find out how to cancel a credit card.)

However, you can also consider downgrading your Sapphire Reserve to another Chase card, such as the Chase Sapphire Preferred® card, which has a lower annual fee of $ 95, or the Chase Freedom Unlimited® with no annual fee.

Alternatives to the Chase Sapphire Reserve

If you are considering opening another travel card, consider these alternatives which have annual fees of $ 95, $ 250, or $ 695.

Similar card with an annual fee of less than $ 100

Chase Sapphire Preferred® Card

  • Awards

    $ 50 annual Ultimate Rewards Resort Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on meals, 2X points on all other travel purchases, 5X points on Lyft trips through March 2022 and 1X points on all other purchases

  • Welcome bonus

    Earn 60,000 bonus points after spending $ 4,000 on purchases in the first 3 months after opening the account

  • Annual subscription

  • Intro APR

  • Regular APR

    15.99% to 22.99% variable on purchases and balance transfers

  • Balance transfer fees

    Either $ 5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fees

  • Credit needed

Premium rewards card with lower fees

American Express® Gold Card

On the secure American Express site

  • Awards

    4X Membership Rewards® points on restaurants (including takeout and delivery, as well as Uber Eats purchases) and in U.S. supermarkets (up to $ 25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel. com, 1X points on all other purchases

  • Welcome bonus

    60,000 Membership Rewards® points after spending $ 4,000 on qualifying purchases within the first 6 months of opening the account

  • Annual subscription

  • Intro APR

  • Regular APR

  • Balance transfer fees

  • Foreign transaction fees

  • Credit needed

Competing luxury travel card with higher fees

The American Express Platinum Card®

On the secure American Express site

  • Awards

    Earn 10X points on qualifying card purchases at restaurants around the world and when you make small purchases in the United States, up to $ 25,000 in combined purchases, during your first 6 months of membership. card, 5X points on flights booked directly with airlines or with American Express Voyages (as of January 1, 2021, this applies up to $ 500,000 per calendar year), 5X points on prepaid hotels booked with American Express Travel, 1X points on all other purchases

  • Welcome bonus

    100,000 Membership Rewards® points after spending $ 6,000 within 6 months of opening the account

  • Annual subscription

  • Intro APR

  • Regular APR

  • Balance transfer fees

  • Foreign transaction fees

  • Credit needed

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.