Is the Chase Sapphire Reserve Credit Card Worth It?

In the finance world you often hear that there’s no such thing as a free lunch. No matter how frequently you remind yourself of this principle, occasionally you will delude yourself into believing you found a great opportunity. This situation presented itself to me a few years back when I started researching high-fee credit cards. I ended up going choosing the Chase Sapphire Reserve credit card based on a friend’s recommendation and the whopping 50,000 points sign up bonus (worth ~$750)!

The credit card boasted a huge list of benefits; including but not limited to, an annual travel stipend of $300, trip cancellation insurance, extended warranty protection, and 3x points on restaurants and travel. However, the card came with an annual fee of $450 — which can be hard to swallow.

Required Return on Investment

Once I exhausted through the sign-up bonus, the question became whether I would use the card enough to warrant the annual fee, which was unfortunately increased to $550 in 2021. Additionally, one has to consider the opportunity cost of a no-fee card. Assuming annual credit card expenses of $30,000 and an average conversion rate of $.015/point, I estimated the ROI for the Chase card to be ~$291 in a post sign-up bonus world.

An annual ROI of \$291 is nice, but not worth spending an inordinate amount of time trying to optimize credit card points. However, the “Other Benefits” mentioned above include a number of items that could prove to be useful and change my assumptions. After a recent negative experience with one of these “other benefits”, I decided to analyze them in more detail.

Calculation Example: $29,700 expenses * 2 = 59,400 points * .015 = $891 rewards – $450 annual fee + $300 travel credit benefit + \$50 other benefits = $791 profit – $450 opportunity cost = $341 ROI pre-2021.

Other Benefits

Chase Travel Portal

Chase advertises their incredible travel portal where users can earn 5x points on airfare booked within the portal and 10x points on hotels and car rentals. While this appears to be an incredible benefit, they forget to mention that most, if not all, bookings are more expensive in their portal than outside of the portal. Every time I have compared prices between the Chase travel portal and prices found googling, the portal was often higher*. Do the extra points still make it worth booking via the portal?

Let’s walk through an example. Imagine a weekend trip where you will spend ~$500 on the round trip flight and ~$500 on the hotel. Let’s compare a scenario where the portal is $50 more expensive for each item to see if the points justify this higher expense.

In the scenario above, the additional rewards points received for booking through the Chase travel portal did not make up for the higher prices. The price would have to be no more than $70 higher in order to justify using the chase travel portal (assuming equal split between airfare/hotel cost and an ~$1000 total trip cost).

Another disadvantage that is not mentioned in most reviews is the worse user experience. Take a look below to see how it is MUCH simpler to search flights across multiple airports in Kayak versus the Chase Travel Portal. I was unable to select all nearby airports in the Washington, DC area in the Chase Travel Portal, while this was a simple feature in Kayak.

Another useful feature excluded in the Chase Travel Portal is Kayak’s “Fee Assistant”. This makes it easy to compare prices with and without luggage. Chase’s interface is okay, but not quite as user-friendly and intuitive as some others (e.g. Kayak, Google’s Flight Search).

*The price difference is primarily explained by the additional options via googling or another website when compared to the Chase Travel Portal. For example, you cannot book Southwest flights or see Airbnb listings through the travel portal.

Special Lounge Access

When I first received the Priority Pass, I was pretty excited. I used to hear stories from colleagues about the incredible benefits of flying first class and getting access to exclusive lounges. I assumed Priority Pass would yield some luxury experience.

Unfortunately, many of the exclusive lounges you see in airports are not part of the Priority Pass program. While the Priority Pass has lounges at most airports, they are only available at specific concourses. Even if your airport has one, it might be nowhere near your gate. I have yet to utilize this feature in the 3+ years of having this benefit.

Experiences and Special Offers

The experiences are extremely limited. The lack of options and diversity of locations made me forget about this feature quickly. I have never once booked any of their experiences. As seen below, they currently only offer experiences in 4 different locations.

Chase Shopping Portal

Because the travel card only gives 3x points (or higher multipliers) for travel and restaurants, shopping and groceries get left out of this bonus. They only get the standard 1x point multiplier for purchases. The Chase Shopping Portal is an additional benefit where you can get higher points multipliers for shopping online with some vendors. This can be a worthwhile benefit if you are able to make a large percentage of your shopping via this online portal, which requires you to click their special links prior to making any purchases.

The huge limitation for this shopping portal is its lack of availability for shopping via your mobile phone or shopping in-person. As far as I know, there is no mobile app for using the Chase Shopping Portal and no way to receive the bonus points for shopping in-person. Personally, a large percentage of my shopping takes place via my mobile phone or in-person. Therefore, most of my shopping and grocery purchases have not been via the Chase travel card. The poor user experience drove me to use my other credit card for these purchases since it yields higher rewards for these types of purchases.

Doordash/Lyft

Chase will often have new or limited benefits, such as Doordash and Lyft. Currently, I receive $5/month in Doordash and a free Dashpass membership. If you use Doordash at least once per month, this is a worthwhile benefit that can easily yield $60 or more in annual savings. If I remember correctly, there was previously a limited time Lyft membership benefit that reduced fees for using their app as well.

Trip Cancellation Insurance

I recently had to cancel several trips because my traveling companion received some unfortunate medical news that would require a lengthy treatment. The cancellation fees were irritating until I remembered that my Chase card had travel cancellation insurance. It could help me recoup ~$500 in cancellation fees.

I proceeded to their claims site to file two new claims. The issues with this web page loading slowly was an ominous sign for what was to come. After the page finally loaded, I tried to fill out their confusing and poorly functioning web form. I called their helpline, whom after putting me on hold for 25 minutes, guided me in filling out the online claims form. They required A LOT of documentation to prove that your situation qualified for the insurance. I obtained a letter from my travel companion’s doctor to verify her condition and date of diagnosis, collected the cancellation confirmations from my vendors (i.e. hotels), and got my bank statements to prove the purchase. I was confident that I provided everything they would need to verify my claims. Upon submission, they said I should expect a response in 5-7 days.

Fast forward 4 weeks (and multiple calls) — I finally received a response for my claims. They sent me a response that requires further confirmation that I received no future benefits from the vendors and required my travel companion’s physician to fill out a custom form. At this point, I honestly debated whether getting the refunds was still worth it. My travel companion’s physicians and nurses are extremely busy people and we already asked them to fill out several other forms for us. I used one of those forms instead of Chase’s custom, physician statement form. I doubt it will be sufficient for their verification process. The trip cancellation insurance which started as a promising benefit has now become a huge pain in the ass. I’m not sure whether I’ll recoup the cancellation fees even if I pester the physicians to complete Chase’s custom forms.

Summary

While the high fee credit cards appear as a no-brainer, the ROI significantly diminishes in the years following the sign-up bonus. My first-hand experience has shown that many of these benefits come with hidden limitations or disadvantages. The opportunity cost for not choosing a high-fee card, coupled with their benefits’ limitations, reduces the expected ROI of choosing high-fee cards. While the supplemental benefits were unimpressive, the sign-up bonus justifies consideration of this high-fee card. I would recommend individuals with the following characteristics to consider the Chase Sapphire Reserve card (or something similar):

• Expects to spend $2500+ per month via this credit card and can comfortably afford the bills
• Will spend $4,000 within 3 months after signing up to receive the sign-up bonus***
• Can easily afford paying the high annual fee of $550 at the beginning of each year
• Will dedicate extra time if they want to take advantage of the supplemental benefits
• Spends at least as much on travel (e.g. planes, gas, hotels) and restaurants as the average consumer
• Is willing to risk a negative annual ROI if they don’t spend enough each year
• Is willing to bear the burden of a temporary credit rating hit if they need to cancel the card

While there is no such thing as a free lunch in finance, credit cards rewards are as close as they come.

~ The Data Generalist

***If you want to sign up for the Chase Sapphire Reserve card, please use my referral link and you will receive 60,000 bonus points if you spend $4,000 or more in the first 3 months.

Image Source: Arrested Development Meme Source

Also published here.