On my mind (Goodbye Sapphire Reserve?)


a close up of a credit card

I’m struggling with the question of whether or not to say goodbye to my Sapphire Reserve card.  Now that my Citi Prestige card offers 5X for dining, airfare, and travel agencies, the Sapphire Reserve has lost its coveted spot in my wallet (see: Prestige rocks my wallet for 2019).  I’ve temporarily moved the card to my travel wallet, but I’m not at all sure it should stay there.  The logical thing to do is to downgrade it to a no-fee card.  And if I ever need it again, I believe I could product change it back to the Sapphire Reserve.  But, let’s face it, I’ve somehow developed an emotional attachment to this card and so it’s hard to see it go.

In my last “on my mind” post, I struggled with the question of whether I should sign up for the Amex Business Platinum card before the annual fee increases from $450 to $595 in February (update: the $595 fee has expired and the fee has since increased again to $695 in 2022).  Thanks to the process of putting my thoughts into writing, I decided not to get one for myself, but to have my son sign up.  He would get lounge access and other perks, and I would get the Gogo internet passes, airline fee reimbursements, and use of his points in exchange for meeting minimum spend requirements.  He signed up and we’re well on our way.  In fact, he was able to use his Hilton Gold status granted by this card to get free breakfast at a Hilton in Chicago earlier this week when visiting a friend.

Since the last “on my mind” post was so successful (thanks for being there for me!), I figured that it made sense to attack the Sapphire Reserve question here.  I actually covered this question in detail fairly recently in the post “Should I ditch my Sapphire Reserve?” but I didn’t reach a final conclusion.  In that post I wrote “I thought that writing this post would clarify the decision for me, but it hasn’t. I honestly haven’t yet decided whether to keep or downgrade the card, but I’m leaning towards downgrading it.”  In other words, I punted the decision to January when the Prestige’s new 5X rewards structure would kick in.  Now, it’s decision time.

Sapphire Reserve Benefits

In my prior post on the subject, I pointed out that even though the Sapphire Reserve has excellent benefits, I get the same or better benefits from other cards that I have (I have lots of cards!).  I listed two major exceptions: the Sapphire Reserve’s best in-class travel insurance, and the ability to redeem Chase Ultimate Rewards points for 1.5 cents each.

Regarding the Sapphire Reserve’s travel insurance, a reader pointed out that I would get the exact same insurance if I paid for travel, at least in part, with my Ritz Carlton card (see: Ritz matches best-in-class Sapphire Reserve travel protections).  That is true.  And I plan to keep my Ritz card for its annual 50K free night certificate and $300 in airline fee reimbursements.

That leaves just one good reason for me to keep the Sapphire Reserve: the ability to redeem points at 1.5 cents each towards travel.  That’s a killer feature if you use it, but I rarely do.  I usually transfer points to airline programs or to Hyatt. My old Ink Business Plus card gives me the power to do that.

Emotional Attachment

When Chase introduced the Sapphire Reserve, I fell in love.  My wife and I travel a lot and we eat out a lot.  Finally, here was one card that offered huge rewards for both. And I loved the simplicity of it.  I kept this one card in the front of my wallet and used it for all dining and travel.  I never had to think about which card to use for these things — it was obvious.  Yes, Chase charges $450 per year (update: now $550), but they also rebate $300 per year in travel spend.  The extra points earned from the Sapphire Reserve over other options available at the time made the card worth far more than its net $150 fee after $300 rebate (this was written before the annual fee increased).

Fast forward to today.  Citi has now rejiggered their Prestige card to match up very well against the Sapphire Reserve.  I still think that many people would be better off with the Sapphire Reserve if they had to pick one or the other (see: 6 reasons the Citi Prestige is not a Sapphire Reserve killer), but  I think that the Prestige is the better card for me (given that I have other cards that fill in the holes).

Due to my emotional attachment, though, I find myself making excuses to keep the card:

  • “It’s only $150” (this was written before the annual fee increased)
  • “I don’t want to upset Chase”
  • “I have a huge balance of Chase Ultimate Rewards points. I should start booking travel through Chase at 1.5 cents per point”

Fleshing out the pay with points argument

That last emotional excuse, above, is actually a reasonable one.  I should start booking travel through Chase.  Specifically, I should book airfare this way.  My wife and I have millions of Chase points that we rarely use.  That’s crazy.

I usually avoid booking hotels through Chase since I can get better deals in other ways. Airfare is different. Most of the time, at least with major carriers, airfare found through Chase is the same as booked elsewhere.  Plus, unlike hotels, you can get airline rewards when flying on a ticket purchased with points.

Let’s arbitrarily say that I could book $2,100 worth of airfare each year through Chase if I wanted to.  With the Sapphire Reserve at 1.5 cents per point, I would spend 140,000 points for those flights.  If, instead, I paid with points through my Ink Business Plus card at 1.25 cents per point, I would spend 168,000 points.  In other words, keeping the Sapphire Reserve would save me 28,000 points which would be worth $420 in airfare (or $280 in cash).  The Sapphire Reserve’s 1.5 cents per point advantage would easily save me more than the card’s net annual fee.  More importantly, I would save cash and start to spend down my points balance at a good value.

The Decision

I started writing this post with the intention of convincing myself to dump my Sapphire Reserve card.  Instead, I talked myself into keeping it.  I really should start spending down my Ultimate Rewards fortune, and paying for flights at 1.5 cents per point value is a good way to do so.  So, that’s what I’ll do.  Thanks for listening, and thanks for your help!

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