Credit Card Expert Roundup #55 - Chase Sapphire Reserve Annual Fee Increase
While we have seen an exponential increase in benefits added to premium credit cards over the past few years, we've also seen an uptick in the annual fees associated with the cards. Most recently, Chase has increased the annual fee to their premium card, the Chase Sapphire Reserve, to $550 while adding a few more benefits. Do the perks associated with the card justify this yearly price tag? Jason Steele asks industry experts to weigh in with their thoughts:
"The Chase Sapphire Reserve just raised its annual fee to $550 and added a few benefits. Is it worth the annual fee, and why?"
Gerri Detweiler - Education Director for Nav
As with any reward card, you need to carefully evaluate two things:
Are the costs worth it? That can include the annual fee, the interest rate if you may carry a balance from time to time, as well as additional fees such as foreign transaction fees.
Are the rewards right for me? Even cards with top-tier rewards like this one aren’t right for everyone. For example, I have another co-branded airline reward card that I’m considering dumping due to the high annual fee. I don’t fly that airline often anymore, so I rarely use that card, and the cost doesn’t continue to make sense.
Chase Sapphire Reserve, in particular, has very flexible rewards. Benefits such as the $300 annual travel credit, 3x points for travel and dining purchases, primary coverage for car rentals and Priority Pass lounge access have made it almost a no brainer for many travelers.
But the higher annual fee definitely means you’ll need to do a little math to determine whether to get it or keep it. Ask yourself, “Do I (or will I) use the current benefits?” For example, although I’m a frequent traveler I’ve been able to use the lounge access exactly once in two years. It’s simply not available where I tend to fly. Will you use the new benefits such as Lyft Pink or DoorDash credits? If not, but you like this card overall, you may want to consider the Chase Sapphire Preferred at a lower annual fee.
Bill Hardekopf - CEO of Lowcards.com
If you are a current Chase Sapphire Reserve customer, you have at some point made the decision that the card is worth the current $450 annual fee. Now you received a notice that your annual fee will increase from $450 to $550 beginning with any renewals after April 1, 2020. This $100 increase is somewhat offset by two additional perks you will receive: a free year of Lyft Pink and a $60 DoorDash statement credit in both 2020 and 2021. You must decide if these two perks are worth the extra $100.
That will all depend on how much you use ride hailing apps and food delivery services. The Lyft Pink is valued at $19.99 per month. It gives you 15% off all Lyft rides, priority airport pickup, three free 30-minute scooter rides per month (where available), and 10X points on Lyft rides when linked to the Chase Sapphire Reserve card.
In addition, the cardholder receives a $60 DoorDash statement credit in both 2020 and 2021, as well as unlimited free food deliveries on orders of at least $12.
If you are sure you would utilize Lyft or DoorDash services enough to offset this additional $100 annual fee for the Sapphire Reserve card, then it would be worth it to pay the extra $100 fee. However, if you would not use this specific ride hailing app or food delivery service, or you would not be guaranteed to save at least $100 with these perks, then the fee would not be worth paying.
Andrew Schrage - CEO and co-owner of Money Crashers
While you might think that paying several hundred dollars in an annual fee is never a good idea, it obviously is for the holders of the Chase Sapphire Reserve Card. It previously had an annual fee of $450, but that was recently raised to $550. Assuming that the owners of the credit card were OK with paying $450 in an annual fee for its current set of benefits, which is probably true, the $100 increase seems to be worth it to keep the card. In short, I would say yes, that it is, because of what the benefits entail.
The extra $100 gets you $120 worth of statement credits for the food delivery service DoorDash. You’ll also pay lower service fees for DoorDash for the initial year. You also get a free year of service from Lyft Pink, an upgraded version of the ridesharing service. With it, you get 15% off on all of your rides, faster pickup at the airport, a less restrictive cancellation policy, three free short-term scooter or bicycle rides per month, no lost and found fees, and other exclusive savings offers. There’s also an enhanced rewards program available as well. So really, the extra annual fee is worth it most particularly if you’re already a user of food delivery and rideshare services. And even if you’re not, dollar for dollar it would make sense to pay the additional fee just to try these services out. However if you don’t see yourself as a continual user of these additional perks offered by the card, at the end of this year, it might be time to sever ties with the card. But based on research from the issuing company itself, these are services that are in demand so if you fall into that group, then again, paying the added annual fee does make sense.
Monica Kowollik - Has covered credit cards for 15 years at CreditFast.com
The Chase Sapphire Reserve Card is worth the higher annual fee and this is why. Many cardholders use the Sapphire Reserve Card because they travel frequently. So if ride-sharing is part of that equation, then this increase can quickly be recouped if the cardholder spends more than $300 a year on Lyft rides alone. This new reward perk includes Lyft Pink, which generally costs $19.99/month and includes 15% off on all Lyft rides. Also, Lyft purchases now earn 10x points when made with the Sapphire Reserve Card. So, in essence, cardholders receive 30% off on ride-sharing using Lyft.
The second new benefit is that individuals who use the Door Dash service will now receive two $60 credits. The first credit is issued in 2020, and the second credit issued in 2021. So for those that use Door Dash regularly, this benefit will quickly be consumed.
Other reasons the Sapphire Reserve Card is worth the higher annual fee is that Customers love the benefits they currently use. Such as points earned hold 50% more value when redeemed through Chase Ultimate Rewards. Further benefits include the $300 annual travel credit, Priority Pass Select airport lounge membership, 3x points earned on travel and dining, and the $100 application fee credit for Global Entry or TSA PreCheck. So in conclusion, many cardholders will earn more rewards back on Lyft and Door Dash at a reward rate higher than $100, and this will help offset the entire annual fee in general. So if these new and old reward benefits fit the lifestyle of the consumer, they can only benefit and should keep or apply for the Chase Sapphire Reserve Card.
Jason Steele - CardCon Founder and credit card/travel expert
The Chase Sapphire Reserve is my go-to card for so many reasons, that I just can’t see breaking up with it over a paltry $100 price increase. For example, I love the fact that I get 1.5 cents per point towards travel reservations made through the Chase Ultimate Rewards travel center. This alone is worth the $100 price increase. I also believe that I’ll get $120 in free Door Dash orders, which is also worth the additional price. I’ve just signed up for Lyft Pink, which will save me probably about $100 over the year too. Finally, I really like using the Priority Pass Select membership at restaurants, which is no longer possible with the membership included by American Express.
But ironically, I rarely use the card for spending. I use my American Express Platinum for buying airfare, on the rare occasions that I do so. And I use my Amex Gold for restaurants. This leaves my Sapphire Reserve for things like hotels, rental cars, public transit, parking and tolls. And for me, this isn’t that much. But I’m definitely keeping the card!