The True Cost of the Sapphire Reserve

Fair warning. This post is a lot to swallow.

I’ll admit, the initial sign up bonus on this card used to be great (100,000 points!), but other than that, I was not thrilled about the long term value of the Chase Sapphire Reserve (CSR). However, after developing the Core Credit Card Concept, my mind is beginning to change on this card. If you haven’t yet read that post, I suggest you read it before you dive into this post. I’ll be using ideas developed in that post to put the Chase Sapphire Reserve (CSR) through a deep value analysis.

Core Credit Card Concept Part 1: Transfer Privilege

Chase is a credit card issuer that requires you to pay an annual fee of one of their premium cards in order to be able to transfer their flexible point currency to other loyalty programs. Chase’s flexible point currency is called Ultimate Rewards (UR) and it’s one of the most valuable flexible point currencies out there. The credit cards that Chase offers that give you the privilege of transferring points to partners are the Chase Ink Plus (Discontinued), Chase Ink Preferred (CIP), Chase Sapphire Preferred (CSP), and Chase Sapphire Reserve (CSR). Those cards all have an annual fee of $95, except for the CSR, which has an annual fee of $450.

Chase Sapphire Reserve

Let’s dig in deeper to that $450 CSR annual fee. Since $95 is the smallest annual fee you can pay to get the privilege of transferring UR points, and if you only carry 1 premium Chase card (and I think you should only carry 1), you can essentially subtract $95 from the annual fee of the CSR. We can do that because that is the cost we have to pay no matter what to get the transfer privilege, and UR points are not very valuable if you do not have that privilege. That brings the annual fee to $355.

The CSR offers a $300 travel credit that most will be able to use. For me, that brings the annual fee further down to only $55. Now the question is if the Chase Sapphire Reserve is worth $55 more than the other premium Chase credit cards.

Core Credit Card Concept Part 2: Evaluate All Others Against Your Core

Let’s compare the CSR against the other premium Chase credit cards.

Option #1: Chase Sapphire Preferred

I’m going to throw the Chase Sapphire Preferred (CSP) out the window because based on my Core Credit Card Portfolio, this card is worthless to me. The CSP earns 2x points on travel and dining and 1x points everywhere else. Since I already earn 2x points everywhere through credit cards in my Core Credit Card Portfolio, this card would not give me any added point earning value. Paying an annual fee on this card does not make sense if there are better options, and every other option is a better option.

Option #2: Chase Ink Plus

The Chase Ink Plus is the premium Chase card that I currently carry. Unfortunately, this card is no longer available for new sign ups. Because I already earn at least 2x points everywhere from cards in my Core Credit Card Portfolio, it only makes sense to look at a cards bonus categories that earn more than 2x points. This card earns 5x points on telecommunication purchases (internet, cable, cell phone bill) and on purchases at office supply stores (up to $50,000 in purchases). Those are pretty lucrative bonus categories. The problem for me is that the Chase Ink Cash (a no annual fee business credit card Chase offers) earns the same 5x bonuses, but for up to $25,000 in purchases in a year. I have no plans on spending between $25,000 and $50,000 in these categories, so it does not make sense for me to pay an annual fee on this card if there are better options available. I only carry this card because I do not have another premium Chase card and I have not been eligible for one based on Chase’s 5/24 rule.

Option #3: Chase Ink Preferred

That leaves the Chase Ink Preferred (CIP) as the only real contender, and it’s a strong one. This card offers 3x points on travel. It also has a few other 3x categories, but I do not believe I would spend enough in those categories to make an impact on this analysis. The Chase Sapphire Reserve (CSR) earns 3x points on travel and dining. That makes it so the only difference between the Chase Ink Preferred and the Chase Sapphire Reserve (CSR), to me, is that the CSR earns 3x points on dining. However, based on the CCCC, I already earn 2x points on dining, so the Chase Sapphire Reserve essentially earns 1x more points on dining.

If you value UR points at 2 cents a point, then you must earn at least 2,750 extra points on the CSR in order for it to be worth it to pay $55 (the difference between the annual fees of the Chase Ink Preferred and Chase Sapphire Reserve). At earning only 1x more points on dining, that means it makes sense to hold the Chase Sapphire Reserve instead of the Chase Ink Preferred if you send $2,750 or more on dining every year. I am a consultant and expense a decent amount of dining every week, so I know I would spend at least this amount in a given year between personal and business dining costs. For me, the Chase Sapphire Reserve makes more sense for the long term when compared to the Ink Preferred.

Note: This analysis excluded the fringe benefits of the Chase Sapphire Reserve such as Priority Pass Membership. 


If you already have a credit card in your Core Credit Card Portfolio that earns 2x points on dining, then it is only worth spending a bigger annual fee on the Chase Sapphire Reserve if you spend $2,750 or more on dining in a given year. I think that dollar amount is possible for many people, but I know it is not possible for everyone. This analysis only looked at the point earning potentials of the premium Chase cards and excluded the added benefits of the CSR like lounge access. Those added benefits may make the true cost of the CSR less to some people.

This analysis also only looked at the long term value of these cards.

Currently the Chase Ink Preferred has a sign up bonus of 80,000 points and the Chase Sapphire Reserve has a sign up bonus of 50,000. If you can only get one of these cards (which I may be doing), then it becomes even fuzzier about which card makes more sense. Yes – the Chase Sapphire Reserve has better long term point earning potential, but it would take a long time to make up for the 30,000 point difference in sign up bonuses. I’ll take a dive into this analysis at a later time.

As you can see, there’s a ton of thought that goes into which credit cards you should own to get the biggest return for your buck.

Let me know if you have any questions! I’d also love to hear if you disagree with my views on the CSR.

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