Frequent Miler's latest team challenge, Million Mile Madness, is almost done! The last two weeks Greg, Nick, and Stephen competed to earn 1 Million SAS miles by flying 15 airlines. But who completed the challenge with the most Speed, Affordability, and Style?
Yesterday, Greg wrote about cancelling a credit card to which he had an oddly emotional attachment, the Citi Prestige card (See: Dumping my Citi Prestige card). His willpower is stronger than mine; with 5x on dining and flights, I’ve never been happier to pick up the check for friends and family and be reimbursed — I can’t yet muster the strength to cancel it. Thankfully, I don’t have to yet as I was charged the annual fee about six months ago, which was the reduced $350 fee I somehow got grandfathered into with a long gone Citigold account. It’s going to be hard to say goodbye to that one for sure. However, I have much less attachment to Greg’s favorite credit card: at next annual fee, I think I’m going to cut the Sapphire Reserve from my roster. I think it is an overvalued card whose time has come. Here’s why.
First thing’s first: I’m not really putting my money where my mouth is
I feel a little guilty about one key thing: the annual fee on my family’s Sapphire Reserve posted and was paid a couple of months ago. For that reason, the card won’t actually be on the chopping block for quite a while yet. I kind of feel like it’s cheating to talk about why I don’t think the card is worth it while fully intending to hold it for most of another year yet. That said, this has been on my mind for quite a while and I’ve recently come to the conclusion that it’s just not worth it to me. Of course, we all need to make that evaluation on our own, and that’s where Greg’s ultra-premium card spreadsheet comes in. But there are several things to which I won’t assign much value for this card that lead me to think I’m out on the Sapphire Reserve.
Reason one: I won’t use it for dining
The CSR almost never comes out of our wallets for dining. That’s because have the Citi Prestige card for 5x dining (for the time being) and the Amex Gold for 4x. I do like Ultimate Rewards points, but I don’t like 3 of them better than 4 Membership Rewards points or 5 Citi ThankYou points. So dining gets nearly $0 in spend on the CSR.
Interestingly, in the comments of yesterday’s post, there was some chicken-and-egg discussion terms of how to compare value with other cards in your wallet. In my case, the Gold is an unquestionable keeper. I’d pay the annual fee just for the ability to generate 100K easy points at US Supermarkets each year. Getting 4x on dining will be a great bonus prize if and when my Prestige goes away.
Reason two: I don’t get enough value using it for paid travel
Travel is the other Sapphire Reserve bonus category. The CSR card does get most of our travel spend thanks to its best-in-class travel protections. When I’m booking a flight for my immediate family, taxes and fees normally go on this card (or occasionally the Chase Ritz-Carlton card, which has the same protections).
However, the fact of the matter is that, contrary to what one might expect, we (meaning my family and I) don’t spend a ton of money his category every year. This year we’ve traveled more than usual, but most years I just don’t think we’d earn enough in the travel category to justify keeping the CSR. That’s for a variety of reasons.
One reason is because when booking travel for friends and family who would not qualify for travel protections through Chase, I use my Prestige card. It gets 5x airfare, 5x through travel agencies, and 3x at hotels and cruise lines. As I said, I think I’ll cancel the Prestige card when the next fee comes due, but at this point the CSR isn’t getting much of that spend (of course the CSR does get the spend when booking for family members traveling with us who would qualify for trip delay / interruption / cancellation coverage).
The Prestige also gets some hotel spend by default due to 4th night free bookings. Citi has killed the value of the 4th night free, but before they did I made quite a number of reservations for next year. If plans shape up on any of those bookings, I’ll have to do some math to figure out whether or not they justify keeping the Prestige for one more year. At any rate, the Prestige card gets the hotel spend on those 4th night free bookings (and indeed got the spend on a few this year). Additionally, if faced with the choice between 3x Ultimate Rewards or 3x Citi ThankYou points for a general hotel booking, I’ll currently take 3x ThankYou points given my love for the Turkish Miles & Smiles sweet spot (which is now bookable one-way online for anyone who missed that — though it may be going away soon).
Let’s say for argument’s sake that I spend $5K per year on travel. I generally don’t spend that much on travel (this year being a notable exception). If that were true, I would earn 5,000 more points per year with the CSR than I would with the Chase Sapphire Preferred (which earns 2x on travel). Is that worth paying the annual fee to keep the CSR? Even if we value the $300 travel credit at full face value (and despite the protests of the more scrupulous among us, I do), my “net” fee on the CSR is $150. Is it worth paying an additional $55 per year for 5,000 points? Before you say “of course it is!”, consider the ease of earning an extra 5,000 Ultimate Rewards points. With regular Visa and Mastercard gift card deals in recent weeks, I’ve been exercising 5x at office supply stores. It’s not that I don’t think 5,000 points is worth at least $55 (clearly it can be worth much more), it’s that I don’t need to keep the CSR to generate those points (and in fact have been generating them fee-free pretty easily this month).
The cards I’ll keep make for sure make a huge difference
Furthermore, it’s worth noting that my perspective is colored by the fact that I will definitely keep a couple of cards that make the CSR redundant.
First up, for travel protection, I intend to keep the Chase Ritz card for the foreseeable future. I haven’t had any trouble using the $300 in travel credits on that card, I value Priority Pass with unlimited guests (I had no problem guesting in 3 adults with me on a recent trip for no fee), and the annual 50K Marriott certificate. Given that I intend to have Titanium status in 2020 and likely Platinum in 2021, having 4pm late checkout and hopefully breakfast/lounge access at a nice centrally-located Marriott at least once a year is worth at least a couple hundred bucks to me. The Ritz card has become a surprising no-brainer to me. If I didn’t have the Ritz card for travel protections and Priority Pass, I’d likely dump this post rather than the CSR. However, flights can easily go on my Ritz card. Sure, I’ll give up some earning potential over using the CSR, but the truth is that I just don’t fly that many paid flights most years. I’m generally just paying award taxes on a credit card, and I don’t freak out about earning 4x Marriott points vs 3x Ultimate Rewards when I’m paying the $5.60 in taxes on a domestic award ticket, nor do I often book international tickets with high fuel surcharges.
Second, while I’ve long though about product changing away from the Chase Ink Business Preferred card, I think I’m going to keep it. While Greg said he doesn’t like to pay more than he needs to for insurance, I’m pretty happy paying $95 a year to insure our cell phones (since the Chase Ink Business Preferred offers cell phone insurance). Granted, I could get this coverage with a no-fee card, but cell phone insurance isn’t worth giving up a 5/24 slot for in my opinion. So in a world in which I won’t trade away a 5/24 slot for cell coverage, I am reasonably happy with paying $95 for it. The ancillary benefit of keeping the Ink Business Preferred is that it means I still have 3x on travel without the CSR. Sure, it’s up to a limit of $150K per year in the card’s bonus categories, but that’s a cap I can more than live with. So for those twitching about the fact that I said I wouldn’t pay $55 per year for the chance to maybe earn 5,000 points, fear no longer: I don’t actually have to pay for the CSR to get those points.
I already noted above that I’ll definitely keep the Amex Gold for 4x at US Supermarkets (on up to $25K in purchases per year, then 1x) I and will gladly use it for 4x at restaurants if I should drop my Prestige card.
If I can get 3x on travel with my other cards and 4x/5x on dining, and I’ll have the same or better travel protection and Priority Pass membership, what does the CSR offer?
Getting 1.5cpp isn’t as valuable as it is cracked up to be (to me)
The clear answer to what it offers is the chance to redeem points through the Chase portal at a value of 1.5c per point (it also offers the ability to transfer points to partners, but I also have that ability with the Ink Business Preferred). The ability to get 1.5c per point in value has long been considered to be one of the hot selling points on this card, and I’ll admit to having drunk the kool aid on this one a bit. I’ve used points at a value of 1.5c each more often that I expected I would have. However, I no longer think this benefit is all it is cracked up to be.
With the Chase Ink Business Preferred (or the Sapphire Preferred), one can redeem points at a value of 1.25c each through the Chase portal, so the CSR adds the ability to get a quarter of one cent more per point in value when redeeming for paid travel booked through the Chase portal. Those quarter pennies can add up if you redeem enough points through the travel portal. For example, if you redeem 100,000 points per year through the Chase Travel Portal with the Chase Sapphire Reserve, you’ll get $1,500 worth of paid travel. With the Chase Ink Business Preferred or Chase Sapphire Preferred, you’d get just $1,250 in paid travel. That extra $250 in value could easily make the CSR a keeper for those who spend a lot of points through the Chase travel portal.
However, does it make sense to spend so much through the Chase Travel Portal?
If you’re booking flights, it certainly might make sense to be spending that much through the Chase portal. Flights are usually available for about the same price through Chase as they are through other online travel agencies (and even when they’re not, you may be able to get the help desk to help you with that). If you’re booking flights and prices are the same as elsewhere, it can certainly make sense to redeem Ultimate Rewards through the Chase Travel Portal. For those who spend more than I do on paid flights, the CSR can be well worth it.
For hotels, I think the value of using the Chase Travel Portal is dubious at best. That’s for a number of reasons. When booking hotels through the Chase travel portal:
- You give up elite benefits. In most cases, hotels won’t honor elite status benefits like free breakfast and late checkout when you book through a third party like Chase (there have certainly been exceptions, but it’s not the norm).
- You can not access promo codes / special rates. I frequently find a code of some sort to reduce the price of a hotel to something below the sticker price. When booking through the Chase portal, you can’t even access the AAA rate. For me, this means I’d be overpaying through Chase in many / most scenarios.
- You can not earn portal rewards. Any time I book a paid hotel stay, I use a shopping portal. We sometimes see portals offer as much as 10% back at various hotel chains — so even if prices are the same, you are paying a higher net cost than you could be if your preferred hotel offers any portal rewards.
- You do not earn hotel points. Between regular earnings and promos, I’d say that it’s not uncommon to earn something like 10% of your room rate back in the form of hotel points when booking with a chain that has a loyalty program. Stack the points you could be earning with the portal rewards you’re giving up and the AAA rate that you can’t book and the Chase Portal starts to look pretty overpriced.
- You could likely buy discounted Hotels.com gift cards and book the same properties for less (and earn 10% back in the form of Welcome Rewards). While there are some ins and outs to consider here, it may be possible to book the same hotels for less via Hotels.com with various stacking opportunities. While the downside is that you have to use cash rather than points, I think it’s hard to value the points at a full 1.5c each when you have another option like this to score big discounts on hotels.
In my case, I additionally have the ability to generate Marriott gift cards at a decent rate, which when combined with booking through a portal, using a discounted rate, and earning hotel points far surpasses the value of booking paid nights through Chase. I’d generally prefer to earn even 2% cash back and leverage that cash back with opportunities for savings on the room rather than use the Chase portal to book the room (and I say that as someone who has booked rooms with Ultimate Rewards points before). I feel like I’m losing too much value by redeeming points for paid hotel stays through Ultimate Rewards.
I won’t just cancel, I’ll downgrade
Of course, when the time comes to dump the CSR, I won’t cancel the account outright but rather downgrade it to a no-fee card like the Freedom Unlimited or Chase Freedom card. I still love Ultimate Rewards points, but I could potentially earn a net higher number of points per year by pairing one of those with my Ink Business Preferred.
Bottom line
While I could likely get similar results from Greg’s detailed spreadsheet, I don’t think I need to go that far to see that the CSR just doesn’t really hold much value for me given that the Ritz and Amex Gold cards are no-brainers for me. Particularly because of the Ritz card, with its better Priority Pass membership, identical travel protection, and better overall value given the combination of the $300 credit and the 50K Marriott certificate (not to mention the $100 Visa Discount Air benefit, which the CNB Visa noted in that post is losing but the Ritz card still has), I don’t think that the CSR will provide measurable value for my needs. I’m unlikely to book enough paid flights through the Chase portal to justify keeping the CSR for 1.5c per point in value and I feel like I am accepting a sub-par value if I book hotels at 1.5c each since booking via the Chase portal essentially requires me to overpay (in the form of giving up portal rewards, discounts, hotel points, or opportunities to stack Hotels.com for a cheaper deal). It’s hard to actually value that benefit at a full 1.5c unless booking paid flights, which I just don’t do all that often. At next renewal, unless Chase finds a way to add additional value to the CSR, I can’t see renewing it. If they actually up the fee to $550, I think tossing it in the circular file will become the no-brainer move for me.
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I”m pretty bummed bc my plan was to upgrade CSP to CSR after a year. I finally just got the CSP earlier this month. One reason I app’d that is bc I wasn’t sure my income (40k) was enough to get CSR. I had lowered limits on all other cards and got CSP limit of 8.8 k tho, doh! Probably woulda had a shot at the CSR then. Oh well, things always change in this game.
BTW just had an amazing trekking experience through the jungle in Colombia to la Ciudad Perdida booked via the Chase travel portal. Super awesome use of points, I never thought to do experiences thru there until recently. The portal also hooked me up with a flight that was unbookable on miles for some reason through all the other airlines I had miles with.
Do you have other Chase personal cards? If you do, you should be able to call Chase and move some of your limit from a different card to the CSP (for example, let’s say that you have a Freedom card with a limit of $4,000 — Chase will likely let you move $1,200 of the limit to the CSP so you have a $10K limit for the CSR next year.
Oh, yeah, totally- the question is will I actually want CSR now that the annual fee has gone up so much.
I see. Well, the good news is that it hasn’t gone up yet — still a rumor at this point. We’ll see.
My hotspot for using Chase UR w/my CSR is car rentals. Saving ~33% is huge. I also book a few hotel nights and 1 or 2 flights each year. But, If the AF increases I’ll dump it and move the pts (~220K) to my wife’s CSP.
For me, I am still leaning towards keeping the CSR because I use a large number of UR points in the “Things to do” travel category on the portal. This year we booked over 80k points worth on museum and park entrance fees as well as snorkeling and whale watching trips. I’d have a harder time making those fit in our travel budget with the bigger trips we can take with points. Florida and Newfoundland trips make it easy to afford outings – Australia and Europe trips, much more costly. I probably should still do the math – a. 25% drop in value may mean paying cash for an amusement park, but still utilizing the same number of points for everything else…
I totally get this. I downgraded my CSR to the Prefered and I am now running an Altitude Reserve and Amex set up. While I love the real-time rewards, they are better than the chase portal, but – ill probably end up going back to CSR and getting rid of the AR. Why? The biggest reason is – United. I live in a United hub and since they have the most flights I go through them quickly. I use Lifemiles/Aeroplan when I can but sometimes I still need United miles.
The preferred (CSP) will Still allow you transfer your points to United miles , you don’t need the CSR for that.
Reading all these responses is making me get a headache but I can’t stop reading em, no family or friends are into our hobby yet they call me to help with hotels and flights…
You are all my people!
After spending over $80 @ Panera bread (soups and salads) I really don’t care about a net $55 difference between the 2 pre/res (the fee difference it’s ok) in my case my spend it’s closer than most customers, to each their own
Edit: I like the reserve, I had to stop to a chase branch to apply (None in Massachusetts) the hoops I had to go through to get it, I put $550 a month on parking Garage fees, on all my fast pass accounts another $100’ish So $650 on tolls and parking alone every month (Lists as travel) so for me it’s worth it Just slightly
Off topic: 2013 I was a mostly cash person, cc was just for planed big purchases to spread out payments and or emergency’s, now I don’t know what cash feels like anymore everything is on CC
Thanks for this site, helped me and family travel all over the world
This might be a dumb question but is Expedia considered to be a travel agency. I’m guessing no. No harm in asking I’m Thinking though
Expedia is considered as an online travel agency
I have too many cards, so I have thought about cancelling the CSR as well. Here is why I am leaning towards keeping it:
1) My main “travel” expense is actually Uber/Taxi/Lyft, so a 3x “travel” category is essential for me (I know you can buy Uber gift cards, but I haven’t started to explore that yet). So I need to hold at least one of three cards: Amex Green, Citi Premier or CSR
2) The Chase portal is very good for redeeming for discounted longer haul first class flights. I recently redeemed for a JetBlue mint flight, for example. That redemption, along with transfers to Avios, Air France and Hyatt, are pretty valuable. I know I can get 1.25 cents with Chase Sapphire Preferred or Citi Premier, but the extra .25 cents makes a difference for big redemptions
In regards to your second point, if you can redeem for at least 60,000 points or so in airfare a year through the site, it’s a keeper. Otherwise, dump it. Mathematically, (airfare points needed = x = $150 annual fee/0.0025 cost difference = 60,000).
Yup 60k points ORD>EU rt my INK can do that..Cool
CHEERs
$150 = net CSR fee. $95 = CSP fee. Diff = $55/.0025 point differential = 22,000 points spend on the travel portal needed to break even with the CSP (over the CSR)
They already have a premier though, so no need to compare it against a CSP.
The $150 annual fee cost comes from comparing the CSR against a freedom downgrade. Then you’re comparing benefit against the Premier that the poster said they already have
@ Aloha808 – Nick (& apparently other readers) plan to downgrade from a CSR to a CSP, a conclusion to his post. My math is to posit a future 22k+ point redemption (or the equivalent of 2 mid-range hotel bookings) might provide a financial reason for not downgrading.
Actually Nick specifically says above he would downgrade to one of the Chase freedom varieties, hence the annual fee comparison against a freedom.
Nick is effectively “downgrading” his CSR to the CIP (that he also already owns) by using its 1.25 redemption point/transfer partner capabilities instead, identical to the CSP (& not the CF). The CIP is also a $95 AF like the CSP (not the CF) – the math still holds up.
He’s not debating whether or not to keep his CIP, he is debating whether or not to keep his CSR or to downgrade it. How much would he save if he doesn’t keep it? about $150.
To accomplish his goals of retaining transfer partners & earn 3x travel, Nick must keep either his CIP or CSR. He cannot dump both cards to do what he says he wants to do, so one card must stay on the books with an AF – not $0 like with a CF/CFU. Goodnight!
Wow, way too deep in the weeds for me. Absent MS-able bonus categories, whether it’s 2x, 3x, 4x, 5x bonuses, card bonus categories are effectively immaterial for those who MS. I get 500-1000x more points from MS than I do from real spend. So the cards I want/keep are all based on ability to MS.
To each their own. For folks that spend a lot in bonus categories, the bonus categories do actually matter.
Timely post once again Nick. I was on the fence, but now i think I’ll downgrade. AF coming due on CSR on December 1, and i think I’ll downgrade to CFU for SM MS. Already have CIP for transfer partners and 3x travel. For dining spend I’ll use my biz Costco CC at 3% back. Thank you.
Also I think the CIP is an underappreciated card. Besides what you mentioned, it has bonus categories such as shipping, which not many other cards have (especially Visa). I’m more than happy to keep at least 1.
As far as travel protections, I’ve got the Amex biz plat, so I can use that as a backup for airline fee payment. I’m happy that Amex is finally bringing those protections onboard. I just wish they worked for OW and open jaw. CSR and RC still superior of course in that regard.
Premium card I keep – Amex Plat, Bonvoy Brilliant, CSR, Ritz, Aspire.
Main reason I have to keep CSR is travel insurance for cruise / tours. Rental car primary insurance can be replaced by Ritz but Travel insurance benefits alone seem to be good enough to keep. (If I take cruise or tour, insurance alone is easily $5-800.
As you mentioned, it kept losing the real value from other cards, but I didn’t find any good card to cover travel insurance like CSR does.
Read my Post Above Cheap yearly Ins AIG..
CHEERS
Chase Ritz and CSR have the same travel coverages..
Thanks. Great to know.
I should have mentioned x3 UR vs x2 Marriott point for tour and cruise. I used to purchase separate insurance or got cash discount (5%) but CSR X3 (I use them at least 2cents) was better option for me.
Sir Nick
Great job on ur annual Travel Ins. infor and Greg’s post . I usually book Ins. every trip (3x+ a year @ $200 ) for the $500K ME .I called AIG Travel for which I have used for better or worse for 10 years . I TOAD her what I wanted and I’m booked with lots of free stuff which comes with the annual policy for $259.. U saved me many hrs of time plus it’s starts in May and I used my new Amex Green to hit the min. ..
Thank You!!
Time is Money !!
You Did Win the contest and c u @ the Yacht Club.
CHEERs
Nick, thanks for the great article. My portfolio is similar to yours. This is our first completed year of having plat/diamond status with Marriott and Hilton and I’m loving it. You can get spoiled really easily. My question is that you mention various portals but is the only way to get your elite benefits is to go directly to the hotel websites (and possibly pay with gift cards) or are there any portals that work with the hotels so you can get your elite benefits?
Absolutely. The way shopping portals (like Rakuten, TopCashBack, BeFrugal, and all the others you see on CashBackMonitor.com) work is that you click through their link and go to the merchant’s website. So, for example, you go to TopCashBack and type Marriott in their search box and then click their link to go the Marriott website and you book directly with Marriott. Essentially, TopCashBack (or whatever portal you use) gets a commission from Marriott and passes part of that commission on to you in the form of cash back.
https://www.cashbackmonitor.com/cashback-store/intercontinental-hotels-group/
Actually, today Rakuten is offering 10% back on IHG (which can be taken as cash back or 10x Membership Rewards points). So you click through Rakuten’s IHG link and go to the IHG site and book directly.
You do not need to book an advance purchase rate — you can book a rate you pay at the hotel (and pay with a credit card or gift cards) and earn those rewards. Because you are only clicking through the shopping portal site but then booking directly with Marriott.com / IHG.com / etc on the hotel chain’s website, you’re booking direct and get your points/benefits.
If you book through an online travel agency like Expedia, Priceline, Hotels.com, or the like, you’re paying the travel agency rather than booking on Marriott.com or IHG.com and then you don’t get your elite benefits. The Chase travel portal is really like an online travel agency (run by Expedia), so you wouldn’t get elite benefits or hotel points.
sometimes the points offered are tiered by elite program status level, always good to check the fine print.
Welcome to the dark side! Despite your calcs being 900 UR off (no UR on travel credit, so in the rosiest of scenarios it’s still not a net $150 AF), there is rarely a use case for keeping CSR if you have CIP. Plus, CIP has those juicy 20k referrals. I will continue to do my CSR upgrade/downgrade cycle to double dip the travel credit, and I’ll be thankful for those that mindlessly keep the CSR year after year, for those people make this game profitable!
frugalman mentions another reason I would keep CSR: ability to transfer points. But isn’t this also possible if you have one of the Ink cards?
Regarding the emphasis on cell phone insurance, something I had originally missed when getting the Ink card was that it only pertains to phones purchased from the provider. We never buy new phones, we always purchase an older one on eBay, so it isn’t even covered.
Yes, ink plus (no longer accept new applicants) and CIP have the ability to transfer
You can transfer to partners with the Ink Business Preferred.
@MAIMel correct, phone must be purchased from the provider. When I filed a claim, I had to prove it so fyi to readers to keep their purchase documentation if not otherwise doing a bogo, etc. purchase plan thru the carrier that would show on their statement
I actually just upgraded my one of my Freedom’s back to the CSR as I intended to cancel my Ritz with it’s annual fee coming up. I cam foresee the value of the 1.5x redemption being worth it to me personally, but only if the CSR stays at $450 per year.
With the news from DoC saying the CSR is going up to $550 per year to add some useless dining credit, I’d rather go back down to a Freedom, keep my own Ritz, and stick to 1.25x redemption’s on my Ink Preferred. You’re right that the CSR has become overrated as hell now, and it’ll only become worse if the annual fee goes up.