Chase Sapphire Reserve lowering sign-up bonus to 50k: Is the card still worth it?

When the Chase Sapphire Reserve came out in August 2016, it was pretty much lauded as a “slam-dunk” card — a card it was definitely worth applying for, even for those who wouldn’t necessarily utilize its many travel benefits.

A big part of that was its 100k-point sign-up bonus (after $4,000 in spending in the first three months). Even if you just redeemed that bonus for straight-up cash back (NOT the best way to use your Ultimate Rewards Points) and did nothing else with the card (NOT the best way to use the Sapphire Reserve), you’d get a $1,000 value from that bonus, enough to cover the annual fee for two years.

Now, the 100k bonus for online applicants is going away — and is being replaced with a 50k bonus. Is the Reserve still worth it?

Details about the end of the bonus

  • For online card applications, the 100k bonus ends Jan. 12, 2017, meaning you have to apply by Jan. 11. After that, the sign-up bonus will be 50,000 points (when the cardholder spends $4,000 in the first three months).
  • The 100k bonus will still be available for eligible in-person applicants at Chase branches, according to Dr. of Credit. No details yet on when (or whether) the 100k bonus will end for in-branch applications.

Is the card still worth it with a lower bonus?

The card first entered the market to an absolute feeding frenzy. So high was the demand that Chase ran out of the metal used to make the cards and had to issue temporary plastic ones.

With so many applicants after initial 100k sign-up bonus, Chase actually reported a $200 million loss for Q4 2016.

The reduction in the bonus may help Chase break even on the card, as will those who keep the card, pay its $450 annual fee and fail to maximize its benefits.

So, whether you should get the card boils down to the following factors. Even if you got the 100k bonus, these factors can help you decide whether the card is worth keeping:

1. How you plan to redeem your 50k bonus: With the bonus at 100k, you could go the “lazy” route and redeem for $1,000 cash back. 50k Ultimate Rewards points are worth just $500 in cash back. That covers the annual fee for just one year

However, you can boost the value of your points by half if you redeem through Chase’s travel portal. Because the Reserve’s points are worth 1.5 cents each when redeemed this way, now you’re looking at a $750 value for your sign-up bonus.

You can get even an even greater value if you transfer your points to one of Chase’s airline partners. It will take more effort, but, if you use your 50,000 points to book an airfare worth $1,000, you’ve essentially doubled their value.

2. Whether you plan to use all the card’s benefits: The tantalizing 100k bonus may have triggered applications from the get-the-card-now-and-worry-about-the-benefits-later crowd. But a 50k bonus is less clear-cut.

If you educate yourself about all the card’s benefits, though, and will actually use them, you can “earn back” much of the annual fee. These include:

  • $300 in annual statement credits for travel expenses: Chase’s “travel” category even includes things like Uber and Lyft, in addition to hotels, flights, train tickets and more. You get up to $300 of these travel charges automatically refunded (via statement credit) per year.

    Travel a lot? You’ll run through this benefit easily. Travel rarely? You’re missing out on $300 back in your pocket while paying a hefty annual fee.

    For those who rarely travel, we suggest the Chase Freedom Unlimited card.

  • Lounge access: This card comes with Priority Pass airport lounge access, which is a $399 value. If that’s something you’d use (and pay for anyway), consider a sizable portion of your annual fee justified. Plus, some guests and authorized users on your card can get into the lounges, too, at no additional cost.
  • Boosted travel-portal redemptions and airline transfer partners: We mentioned these factors above, and they’re vital to making your points go far with this card. And, when you’re paying $450 a year, it’s important to make your points go far.
  • Reimbursed TSA PreCheck/Global Entry fees: Airport security and customs being what they are, you may have been thinking of signing up for these expediting services. The Reserve refunds the application fees for either.

3. How often you travel and dine out: This card’s bonus categories give you 3X on dining and travel. If you spend a lot in these categories, you will rack up points, which, when used wisely, can get you hundreds of dollars (or more) in free travel each year.

If your dining and travel spending is modest, consider the Chase Sapphire Preferred. It rewards 2X Ultimate Rewards points in these categories and has a more manageable annual fee.

The bottom line

If you have no interest in maximizing the card’s bonus categories and educating yourself about its benefits, don’t get drawn in to this $450 card. There are plenty of good no-annual-fee and low-annual-fee cash-back cards out there.

But if you will use the Reserve’s benefits, it could be a wise choice for a premium card, even at a 50k sign-up bonus. In fact, we gave it 5 stars — our highest ranking — in our review based on its perks.

If you use up the $300 travel credit every year, you’re essentially looking at a $150 card. From there, justifying that amount depends on how you earn and redeem rewards — and how well you can put that 3X on travel and dining to work for you (compared to the 2X on the less-expensive Sapphire Preferred).

The major area the Reserve may lack in, compared to other premium cards, is lounge access. If robust lounge perks are what you’re after, consider the identically priced American Express Platinum (American Express is a CreditCardForum advertising partner).

 
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