With the start of each New Year I like to sit back and come up with a plan for the upcoming year. This plan includes which hotels should I remain loyal to, which airlines should I fly, and most importantly, which annual fee credit cards are worth keeping.
I’m pretty happy with my current portfolio of cards and the moment. However, I’m starting to wonder if the Chase Sapphire Reserve is worth keeping open. It’s odd because until now I’ve never considered closing this card. Why would I? It costs me just $150 out-of-pocket (after travel credits) and gives me some great benefits.
However, as I take a serious look at my 2017 spending habits I’m not so sure the card fits my spending profile. I’ve noticed while I do spend quite a bit of money dining out, it may not be enough to justify the $150 effective annual fee.
The Chase Sapphire Reserve Card Is Redundant
As I take a hard look at the benefits offered by the Chase Sapphire Reserve I’m beginning to see a lot of redundancy with my other open credit card accounts as outlined below:
- 3X Points On Travel
- I receive 5X points on Airfare and Hotels from the American Express Platinum card.
- Additionally, I earn 3X points on nearly all other travel categories from the Citi ThankYou Premier card.
- 3X Points On Dining
- I earn 2X points on dining from the Citi ThankYou Premier card. I’ll dig into the math on this benefit later on.
- Priority Pass Membership
- The American Express Platinum card also offers a Priority Pass Select Membership.
- Rental Car Privileges and Coverage
- Again, I receive many of these benefits from the Platinum card, but also from my employers corporate discount program with Hertz.
- Global Entry / TSA PreCheck Benefit
- I have TSA PreCheck for another three years. When it comes time to review I’ll use my Platinum card (which offers the benefit) or open another card that comes with this benefit.
- Waived Foreign Transaction Fees
- Both the Amex Platinum card and Citi ThankYou card among others also waive foreign transaction fees.
The above is a list of Chase Sapphire Reserve benefits that I value the most. As you can see I receive many of the same benefits from other cards I currently have open.
Missing Out On 3X Dining!?
After reviewing the last 12 months of dining purchases I discovered that I spent about $8,000 this past year on “dining” purchases. For those purchases I earned 24,000 Ultimate Rewards points. However, I changed jobs about halfway through the year and I no longer can put travel meals on my personal card. As a result my “dining” spend has dropped quite a bit. For 2018, I only expect to spend about $6,000 on dining purchases. If I put all of that spend on the Chase Sapphire Reserve card I’ll earn a total of 18,000 UR points.
However, if I switch my dining spend to the Citi ThankYou Premier card I’ll earn 2X points on dining. If that ends up being true my $6,000 dining spend will yield about 12,000 ThankYou points. So while I’ll be missing out on about 6,000 points, that only represents a $90 cash value ($0.015/each).
That difference in points earned isn’t enough to justify the $150 effective annual fee from the Chase Sapphire Reserve card.
5X Points On Dining?
Another reason I’m not sure it’s worth keeping the Chase Sapphire Reserve card open is because I also carry the Chase Freedom card. With the Chase Freedom card I earn 5X points on up to $1,500 in quarterly spend with rotating quarterly categories. This year, in Q1 of 2018, I’ll earn 5X points on all Apple Pay purchases. As more dining establishments take Apple Pay I should be able to offset the loss of 3X points when closing the Chase Sapphire Reserve card with the 5X points benefit.
Additionally, nearly ever year Chase offers 5X points on restaurant purchases and grocery store purchases. I presume if I’m extremely diligent in maximizing the 5X quarterly benefit that I may even end up coming out ahead next year.
If I Close The Chase Sapphire Reserve Card, What’s Next?
I have my eyes set on a few card for 2018. The first card I’m considering is the Citi Executive AAdvantage World Elite MasterCard. That card comes with a $450 annual fee, but also comes with a full Admirals Club membership. As American renovates Admirals Club locations around the country I’d like to incorporate more of those lounges into my lounge reviews. However, I don’t do as much domestic travel as I used to. For that reason now isn’t a great time to open this card.
The next card I’m considering is the Citi Prestige Card. I used to love my Citi Prestige card. It comes with nearly all of the same benefits as the Citi ThankYou Premier card plus the often lucrative 4th night free benefit. If I chose the Citi Prestige card I’ll most likely do a card conversion from the TYP so I wouldn’t affect my credit score, but also won’t incur yet another annual fee. The Citi Prestige card comes with a $450 annual fee, but also offers $250 in automatic annual travel credits. So the effective annual fee for the Citi Prestige card is just $200.
If I close the Chase Sapphire Reserve card I’ll save $150 a year. Then, by converting the Citi ThankYou Premier card I’ll only have to pay an additional $105 out-of-pocket to make up the difference in annual fees. At that point I’m already coming out ahead, but as long as I use at least one 4th night free benefit I’ll definitely come out ahead of my current position.
What To Do With My Chase Sapphire Reserve Account?
Keep, Cancel, or Downgrade; that is the question. Obviously I’m probably not going to keep the CSR so that leaves two option. Canceling the card would help my current situation, but also create a problem. If I close this account I’ll lose the ability to convert Chase Freedom cash back points into Ultimate Rewards points.
So, that leaves one option. I’ll have to convert the Chase Sapphire Reserve card to the no annual fee Chase Sapphire card. By doing this I avoid paying an annual fee, but also retain the ability to transfer points to the Ultimate Rewards program.
Final Thoughts
Woah, breath! That was a lot of information. I’m still not sure what I’m going to do, but I’m really starting to wonder if the CSR is worth keeping open in perpetuity. As my annual spending shifts to hotel stays and international flights I’m starting to realize the Chase Sapphire Reserve may not still be the right card for me.
I paid my annual fee for the Chase Sapphire Reserve card back in September 2017 so I’m stuck with this card for at least the remainder of 2018, but at that point I may actually consider eliminating the card from my wallet. In the meantime, I still may end up converting my Citi card to the Citi Prestige. More on that to come.
