4 questions to ask yourself before keeping the Chase Sapphire Reserve another year

In August 2016, Chase launched the $450-a-year Sapphire Reserve card with a 100,000-point sign-up bonus, bringing in so many applications that they ran out of metal cards and sending other issuers of luxury travel cards scurrying to catch up.

If you got swept up by the hype and applied for the card in those first heady months, your Year 2 annual fee will be getting billed very soon. Your Year 1 annual fee (which you paid with the first or second billing statement) was probably a no-brainer. After all, you got a 100k sign-up bonus, along with all the card’s other perks ($300 travel credit, Global Entry fee reimbursement, etc.) But things are less clear-cut in Year 2. There’s no 100k bonus coming in, and you probably already used the Global Entry reimbursement benefit when you first got the card.

So, should you pay another annual fee to keep the Chase Sapphire Reserve? Or close/downgrade the card? While we won’t tell you what to do, we’ll help you decide. Ask yourself these four questions before paying another $450.

Do you use every cent of the $300 travel credit?

This card gives you $300 per year back (in the form of statement credits) when you charge travel to the card. These credits are automatic, and Chase’s “travel” category is broad (it even includes rideshares). If your regular spending doesn’t include at least $300 in travel spending per year, you’re leaving money on the table — and perhaps a luxury travel card isn’t the right fit.

Do you spend a lot in the bonus categories?

This card gets you 3X on travel and dining, and if you’re not putting the bulk of those expenditures on this card, you should probably move on. After the 100k-point payday you got for signing up for the card, farming points via these bonus categories is what keeps you from spending more on the annual fee than what you get back in rewards.

Do you redeem for travel?

Maybe you got the 100k bonus and cashed it in for $1,000 cash back. We won’t fault you for that. But going forward, getting a 1-cent-per-point value for cash back isn’t the best use of your rewards. The card offers a 50 percent value boost when you redeem for travel via the Chase Ultimate Rewards portal (meaning your points will be worth 1.5 cents each). Things get potentially even better when it comes to Chase’s airline and hotel transfer partners. If you transfer your Ultimate Rewards points directly to Marriott, Southwest, British Airways and more, you could potentially get even more than 1.5 cents per point if you redeem strategically.

Can you afford to spend $450?

If you use the entire $300 travel credit, the question actually becomes, “Can you afford to spend $150.” Regardless, it’s a question worth asking. Even if you take advantage of every perk the Chase Sapphire Reserve offers, if the annual fee strains your budget, it’s not worth keeping the card — especially when there are so many other rewards cards with no or lower annual fees.

Recap: Make sure you check all these boxes before paying $450 to renew your Chase Sapphire Reserve:

CSR not worth it to you? Other options

If you have earned Chase Ultimate Rewards points with this card, we strongly discourage cancelling. They’re valuable rewards currency, and you can keep them if you simply ask for a downgrade to another Chase card. Downgrading (also known as product-changing) to a no-annual-fee or lower-annual-fee Chase card keeps your UR balance intact and also lets you get a card that’s better for you, without an additional credit pull.

Read our guide on asking for a downgrade/product change. And then pick a card that’s better for you:

If you just want cash back

Chase has two no-annual-fee cash-back cards to consider:

  1. Chase Freedom: 5 percent cash back in categories that change quarterly
  2. Chase Freedom Unlimited: Unlimited 1.5% cash back on every purchase

If you like travel rewards, but don’t want to spend $450 a year

The Chase Sapphire Preferred ($95 annual fee) doesn’t have all the luxury perks (such as lounge access and travel credits) that the Reserve offers. However, it has all the same travel-transfer partners and gives a (smaller) value boost (25 percent instead of 50 percent) when you redeem for travel via the Ultimate Rewards portal. It offers 2X rewards in travel and dining.

Another option — replace the Chase Sapphire Reserve with multiple Chase cards

Consider downgrading your Reserve to the Preferred — and then applying for one of the Freedom cards. Ultimate Rewards points are transferable between card accounts. So, you could use your Preferred for travel and dining and one of the cash-back Freedom cards for everything else — and then transfer the points earned with the Freedom to the Preferred (which unlocks the ability to redeem at a higher value for travel).

The bottom line

Take a hard look on how you’ve used your Chase Sapphire Reserve card this year. If the hype drew you in and you don’t think this card will be as rewarding going forward, you have other card options within the Chase family.

 
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