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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.
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.
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.