Oh Chase, What Are You Thinking?!


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There have been rumors floating around about possible changes to the Chase Sapphire Reserve credit card for at least a year and these rumors came to a head a couple of days ago when a few specific changes were mooted.

Now, despite the fact that Chase has yet to officially inform any cardmembers of impending changes, we’re being reliably told that January 12th will see the Chase Sapphire Reserve credit card get a mini-makeover…and it’s not going to be a good one.

Changes Coming To The Chase Sapphire Reserve

  • The annual fee will increase from $450 to $550 for all successful applications made after 12 January 2020 and all renewals from April 2020.
  • Cardmembers will be given a “Lyft Pink” membership (worth $19.99/month) for one year only (Pink membership’s primary value appears to come from a 15% discount on all rides).
  • The Chase Sapphire Reserve will earn 10 points/dollar for all Lyft spending
  • Cardholders get a DoorDash “DashPlus” membership (worth $9.99/month) for one year only (this benefit is already in place).
  • Sapphire Reserve cardholders will get a $60 DoorDash credit in 2020 and 2021.

Thoughts

Let’s just call this what it is – very bad news and a massive devaluation to what has been one of the best travel rewards credit cards on the market.

Clearly Chase is attempting to cull the number of Sapphire Reserve cardmembers because there can be no other explanation for the changes that are being put through – they’re pathetic.

Firstly, I really don’t understand the increasing fixation with food delivery services but most regular people aren’t in the habit of ordering take out all the time so the addition of DoorDash services and credits will appeal only to a very narrow segment of the population.

Secondly, rideshare services may be popular in some cities but the majority of people still use their cars when they need to get somewhere so the Lyft Pink membership and the bonus points available for Lyft spending are, just like the DoorDash benefits, only going to be useful to a narrow segment of the population.

Thirdly, Lyft is only available in the United States and Canada so not only are the new ridesharing benefits only going to appeal to a narrow segment of the population but they’ll also be limited to North America – not impressive for a credit card billed as a worldwide travel rewards card.

Fourthly, let’s not lose sight of the fact that, as far as we know, the Lyft Pink membership and the DashPlus membership are only going to be benefits for a year and the DoorDash credits are only going to be available in 2020 and 2021 – what happens in 2022?

Even if you happen to be a cardholder who orders a lot of food to be delivered and uses Lyft frequqntly, most of the new benefits that Chase is introducing (and are being billed as a way of offsetting the $100/year annual fee increase) are only temporary.

The only new benefit that appears to be permanent is the increased Lyft earning rate and how many people are in a position where that alone justifies a 22% increase in the annual fee?

The Sapphire Reserve Will Struggle To Compete

When you take into account the $300 annual travel credit that the Chase Sapphire Reserve credit card offers the new effective annual fee for the card is $250…and that’s going to be a problem for Chase.

The revamped Green Card from American Express costs just $150 and earns 3 points/dollar on travel and dining just like the Sapphire Reserve card and the points that the Green card earns (Membership Rewards points) transfer over to considerably more loyalty programs than Chase’s Ultimate Rewards points.

For travelers who don’t necessarily need the Priority Pass membership or the primary rental car cover that the Sapphire Reserve offers the Amex Green card is now looking considerably more attractive than Chase’s flagship card.

There’s also the small matter of the Chase Sapphire Preferred credit card which may only earn 2 points/dollar on travel and dining but is (anecdotally) easier to get, offers the same primary rental cover as the Sapphire Reserve card and only costs $95 per year.

Amusingly, these changes to the Chase Sapphire Reserve card even manage to shine a positive light on the highly devalued Citi Prestige card.

The Citi Prestige may not offer any consumer protections but its effective annual fee is $245 (once you factor in the $250/year travel credit) and it offers cardholders 5 points/dollar on dining (worldwide) and air travel and 3 points per dollar at hotels & cruise lines.

Purely from an earnings perspective one could now argue that the Citi Prestige offers better value than the Sapphire Reserve….and that’s not a sentence I ever thought I’d be typing.

There’s Still Time For One Final Hurrah

There’s no getting away from the fact that the changes coming to the Chase Sapphire Reserve card are negative and are going to annoy and disappoint a significant number of people…but there’s still time to enjoy the card a little longer.

Anyone successfully applying for the Chase Sapphire Reserve card by 12 January 2020 will lock in the current annual fee ($450) for a year and will be able to avail themselves of all the existing card benefits and the new benefits too – that’s still a pretty good deal.

As bad as the changes that are on their way are, for an effective annual fee of $150 (if you get the card by 12 January) the Sapphire Reserve still offers very good value (the best Priority Pass membership, primary rental car cover, good earnings on travel and dining and Visa’s worldwide appeal) so the card is still worth considering if you can lock in the current annual fee for a final year.

Bottom Line

I’m just about to give up my Citi Prestige card (more on that in a separate post) and now I’m going to have to seriously consider the Chase Sapphire Reserve’s place in my wallet – by the end of 2020 I may be down to just one premium credit card in my portfolio (the Platinum Card from American Express).

I’m fortunate in that my Sapphire Reserve annual fee kicked in at the end of 2019 so I still have the best part of a year to enjoy the card before the annual fee gets increased and I have to decide if the card is worth keeping or not…but I’m already considering my options.

If Chase is simply looking to cull the number of Sapphire Reserve cardmembers it’s going about things in the right way but if it thinks these changes are going to be viewed in anything but a negative light by the majority of cardholders the bank is in for a very big surprise – one of the best travel rewards cards on the market just got noticeably worse.

31 COMMENTS

  1. Well said. I was just about to upgrade my Preferred to a Reserve when news came out about this devaluation, so I’m glad I waited. The part that puzzles me about this is that the Reserve card is the star headliner for Chase. Devaluing it that substantially hurts the Ultimate Rewards program as a whole, and with Hyatt introducing variable pricing, Korean Air gone as a transfer partner, and the catastrophe that is Bonvoy, it’s not like Chase’s overall value proposition has improved of late.

  2. Not happy. Not happy at all.

    As one of the original holders of this, I have kept it even with the effective $150 fee. PPass and insurance along with 1.5 spend is the main reason. And some easy point transfers.

    I could care less about those delivery services. If I am too lazy to fix a meal at home, I will just go out. Lyft or Uber.. we use what works the moment. And that is only a handful of times each year.

    Oh Chase… what have you done to us?

  3. The devaluation is not surprising. Ever since the Reserve card was introduced, they took a massive charge from offering the 100k signup bonus. Now they’re using smoke and mirrors to try and recoup the costs by raising the annual fee and offering just enough to make it seem worth an additional $100 fee when it really costs much less to Chase and puts consistent dollars into Chase’s pockets year after year. These flagship credit cards are not meant for those trying to eek out every dollar of value or for those who only plan to hold for a year or two. Chase is not stupid…by raising the annual fee, I’m sure they’re aware some people will drop the card. It will bring back some level of prestige to the card since a lot less people will have it. I’m sure they have all the statistics and data in front of them and want to cater to a very specific clientele who will hold and spend with the card for the long term. It’s also obvious the way the companies are structuring the benefits is turning into a ‘subscription-like’ service. With a certain amount of credit for travel or door dash, the average person is in many ways doing forced spend because the average person likely isn’t ordering doordash or traveling year after year for 5-10 years straight. But back to the point, this card is really for those who have lots of disposable income and where a $550 annual fee doesn’t bother them at all even if they used none of the benefits.

  4. I always chuckle when term “Prestige” is used in a credit card discussion.

    I think the only people that think that way are writing articles or on the marketing team at the CC company.

    LOL!

    • Uh, that’s the actual name of the Citi Prestige card.

      If you have a issue with that, then you’ll also have an issue with any loyalty tiers at any company – Gold, Silver, Diamond, Platinum!

  5. Maybe I’m just in a different place than many but is an extra $100 a year really going to make that many people drop it? If so maybe you live life too close to the edge. I throw away $100 all the time on nothing and have $8000-$10000 a month in card charges (all paid every month since I have no debt – wrote a check for my house and pay cash for cars). The overall benefits are worth it to me. BTW I use Uber all the time and also have the Lyft app so will use it. This will compliment my Amex Platinum credits on Uber. Also 8 do use Uber Eats if 8 don’t feel like going out so will definitely get the $120 value (over 2 years) w DoorDash. Also I’m a 61 year old retired guy so not exactly a millennial- if I can get value for this others can too.

    On the other hand I hope half the people do drop the CSR since maybe that will cut down on the crowd in Priority Pass lounges.

    • U will not. Just see how popular the credit card offers pp. I’m really glad amex curbed pp dining option coz I can finally find a seat in pp restaurant after that. Forget pp lounge overcrowd each time and worse than a quite gate. BTW for ppl does travel they should have one or two status grant them to airline lounge that doesn’t accept pp at all. I’ve only been pp lounge 2 times last year but hundred times in pp restaurant. I’m glad to have a meal and drink for less than 10 bucks after tips. I may keep my car but also consider citi prestige seriously coz worldwide dining. EVERY TIME my foreign dinner had a hard time in amex scheme to get 5x then I just gave up.

    • It’s a travel card. A lot of the time people fly places. Now, when you get there, you have 2 options for traveling somewhat long distances. 1) Rent a car. Oh look, the CSR has some benefits for you if you’d like to do that. 2) Use Uber / Lyft. With 15%off, plus 10x points(x1.5 if redeemed for travel), the Lyft option will almost certainly be cheaper than the Uber option, so you might as well use it.

      Now imagine this scenario. You’re at work but you’re slammed with work and don’t have time to go get lunch. Just order some food from doordash and have it delivered to the office while you continue working. Spending over $12 5 times will get you free delivery, cheaper service charges, and since you’ll get $60 credit per year for 2 years, it’s effectively free.

      So, if you travel, you can almost certainly find use for Lyft while you’re in a different city. That alone, imo, is close to being worth the $100 increase. The $60 doordash credit + free delivery with dash pass, plus reduced fees pushes it way past being worth the $100 increase.

      I’m sure Chase is benefitting heavily from this partnership with DoorDash and Lyft.

      Well done, Chase.

  6. AC, if you throw away $100 and charge $10,000 every month, you are in the fortunate minority. I think most people use these credit cards because they want to save a $100 here and there.

  7. I’ll stick with AMEX for luxury cards: My Amex Platinum which I have had forever and the Amex Aspire for Diamond status at Hilton. These cards pay for themselves and don’t usually play games.

    • In my area Lyft and door dash are huge. They also have data on purchase records of their customers so it’s possible that those services fair better with the average reserve holder than you think.

      I get that it doesn’t fit you, but seriously Lyft and door dash didn’t get where they are without a good amount of demand. I wouldn’t dismiss it so quickly.

  8. Haha, the Chase Sapphire Reserve just became the Lyft Premium credit card. It’s dope af for anyone that uses Lyft!

    10x UR, 2-3x Hilton, and 1-2x Delta.

    This is the best quasi co-branded card on the market.

  9. Chase Sapphire Reserve offers 2 key benefits to me:

    1) Transfer of Ultimate Reward points to SouthWest airlines
    2) Primary rental car protection

    Is there another card that offers those 2 benefits?

  10. I have had this card for quite a while and honestly for my own use the card is now significantly holding less value for me. I live in a small town in rural Oklahoma so I don’t have door dash or Lyft available and even though there is one uber driver in all of town. I can drive across town in my own car about 20 minutes so theres no need for me to use uber. I frequently travel out of town for work so I earn most of my points from hotels and the few occasional restaurants as well as from the freedom and freedom unlimited cards and though I enjoy the points transfer. I feel if these changes come to fruition my chase reserve card will ultimately devalue since not only will the cost go up but the new perks will not have any value for me. If this comes true I will most likely consider down grading to the chase preferred card. I’m sorry for the long rant but figured I would put some of my own thoughts and experience so others can truly think if these new changes will benefit them or not. After all if there is no need for you to pay extra especially if you’re not utilizing the new perks why pay the extra fee and lose money when it can be used elsewhere.

  11. Wrong info about the Prestige earnings. It’s 5X on dining, flights, and travel agencies (including OTAs like Orbitz/Hotels.com) and 3X on hotels and cruises. Plus routine transfer bonuses. So the earnings are WAY better than Chase.

    • I’ve clarified the airfare earnings in the post but I don’t believe the Prestige card offers 5x on hotel bookings with OTAs & Hotels.com

      • It does because they are coded as travel agencies (I have the Prestige and get 5X on those sites and many more!).

        • Interesting. I have made a number of bookings through various OTAs (boutique hotels and car hire) and, to the best of my knowledge, I’ve never received 5x points when using my Prestige card (and I regularly reconcile my points received with my points expected totals). Can anyone else chime in and say if they’ve received 5x points on OTA bookings (hotel or otherwise)?

            • That’s good to know – thanks.

              Just to clarify: Are you getting 5x on all packages or just ones that involve air travel (flight + hotel, flight + car, flight + hotel + car)?

  12. Great article! I will look into the green card from AMEX. The WF Propel Amex also offers triple points on food and airfare for no yearly fee. Also, I like the cell coverage protection.

  13. I have applied for Reserve card two days ago but Chase has not made a decision on my application yet. I feel they are going to approve after 12th with new fees, if that happens then that will be the end of it.

  14. As some one pointed out there are a number of other benefits not listed. Are they going away ? Like club, teavel delays, emergency medical care, price protection, double wArranty. If not effective $250 is still a bargain

    • To the best of my knowledge, none of those benefits are being touched but as Chase still hasn’t had the common courtesy to officially inform cardholders of the changes that we know are on their way not much can be guaranteed.

      Having said that, Chase is unlikely not to honor all the existing benefits (for up to a year) for everyone who has the card already or who successfully applies for the card before the new changes take effect.

  15. Chase stinks regardless I had two credit cards with them an Amazon one and also Freedom Unlimited. They decided to just shut my credit cards down without notice, I gave them hell for it and I will never use them for a Credit Card again, bad enough my car lease is with them. Went to use my card one day kept getting declined I called and said the account was shit down. Umm okay, luckily its not the only Credit cards I have never an issue with any other company but Chase they have been nasty to me and customer service is just as bad. Never again.

  16. Only one question: how many place accept amex?
    How do you adjust 595 annual fee for amex pla? It only has 5x airfare so you need to book $2
    Effective annual fee amex pla: 595
    Csr: 550-300=250

    595-250=345=34500 points
    34500/(amex 5x-csr 3x)=34500/2=17250 in airfare.
    Only a small population spend that much airfare in a year because you said small ppl use rideshare so I believe uber credit is also useless for u.

    Another funny argument with no math. I don’t understand amex pla owner who complain others.(disclosure, amex gold and blue preferred holder)

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