Chase Sapphire Reserve Annual Fee Increasing To $550

It’s hard to believe that the Chase Sapphire Reserve card has been around since September 2016. When Chase first introduced the Sapphire Reserve it was easily the best all-around rewards credit card available. It offered 3X points on travel and dining and came with a massive 100,000 Ultimate Reward point sign-up bonus. For that, the annual fee was just $450 which was partially offset by $300 in annual travel credits. This brought the effective annual fee down to just $150/year. Back then, that was an absolutely incredible value, especially when most competitor cards were only offering 1X or 2X point on bonus spending and otherwise limited benefits.

Fast forward a few years and the Chase Sapphire Reserve has remained mostly the same. There have been no material changes to the card since Chase launched the card in late 2016. The annual fee, points earning structure, and benefit have literally not changed at all. The only notable change to the card that I can think of is the introduction of Chase Offers to rival the popular Amex Offers.

For about the past 12 months I’ve been expecting Chase to make changes to the Sapphire Reserve card. I personally assumed that Chase would expand the bonus point categories and possibly raise the annual fee. That prediction ended up being about half right. Chase is in fact raising the annual fee for the Chase Sapphire Reserve card, but the points earning isn’t changing much. Instead, Chase is introducing a few entirely new benefits to help justify the increased annual fee.

Changes To The Chase Sapphire Reserve Card

As you can tell by the title of this post, Chase is increasing the annual fee of the Sapphire Reserve card from $450/year to $550/year effective January 12, 2020 for new applicants. For existing card holders, the increased annual fee will take effect on April 1, 2020. It is worth noting that Chase is not making any changes to the $300/year travel credit. So, following the increased annual fee effective dates, the effective annual fee of the Chase Sapphire Reserve card will be $250.

However, Chase is also introducing a few new benefits to the Sapphire Reserve card. Specifically, Chase is adding annual credits for DoorDash purchases. For 2020, Sapphire Reserve card holders will receive a total of $60 in DoorDash credits. In 2021, card holders will receive an additional $60 in DoorDash credits. These credits will help reduce the effective annual fee to $190/year. It is worth noting that at the time of writing it remains unclear if this benefit will extend beyond 2021.

In addition to the DoorDash credits, Chase will also be adding a free Lyft Pink membership for Sapphire Reserve card holders in 2020. Typically Lyft Pink costs $20/month so for at least 2020 the Lyft Pink membership benefit represents at least $240/value. This benefit further reduces the effective annual fee to $(50). That’s right, assuming you use all of the card’s annual credits in 2020, Chase is effectively paying you to carry the Sapphire Reserve card. However, it’s again worth noting that it remains unclear if the Lyft Pink membership benefit will extend beyond 2020.

Finally, following the annual fee increase, the Chase Sapphire Reserve will earn 10X Ultimate Rewards points on all Lyft rides when paid for with the Sapphire Reserve card.

What Do I Make Of These Changes?

For months the Chase Sapphire Reserve card has been on the chopping block. I just don’t get much value from the card anymore, especially when you consider all of the other credit cards I currently carry. Essentially, I just can’t really justify paying the $450 annual fee any longer. Now that the annual fee increase is confirmed so is my decision to downgrade the card to a lower annual fee option.

Now, I will say, that overall the benefits Chase is adding to the card (in 2020) do help justify the higher annual fee. If you live in a decent size city, chances are that you will be able to easily maximize the DoorDash benefit. Likewise, if you live in a big city and take Lyft often, then I suspect the Lyft Pink membership benefit is extremely valuable. However, it’s worth remembering that Lyft isn’t available everywhere… For example, the last time I went home to St. Louis I quickly realized that Lyft does not operate there. So, if you live in a city where Lyft isn’t available, then this benefit is obviously worthless. I don’t use Lyft (or Uber for that matter) all that often. I generally take public transportation, bike, or walk when I can to avoid the higher costs of taxis or car services.

Likewise, I don’t know if I would use the DoorDash benefit. I have this issue with the American Express Gold card’s GrubHub credits. See, I rarely order delivery and I’ve never used DoorDash. For me to use this benefit I’d have to order something in the scenario where I typically wouldn’t order takeout. When I do order takeout I always end up ordering/paying more than I planned, so these types of benefits end up costing me money.

Final Thoughts

When the Chase Sapphire Reserve card came out back in 2016 it quickly became the “it” card for many millennials. If I were to poll my friends and co-workers I’d bet more than half currently carry the card. The reason I mention this is that I’d be willing to bet most card holders won’t pay attention to the annual fee. So, when the fee posts they’ll simply continue to pay it as they’ve done for years. It’s a lot like how Netflix continues to raise its prices yet consumers continue to pay without asking for anything in return. To me, it feels like Chase is trying to do the exact same thing. Increase the annual fee so that people just continue to pay it.

The thing is, the Chase Sapphire Reserve just isn’t worth $550/year. That put’s the card in line with the American Express Platinum card which offers way more value for the same $550. Likewise there are $95/year annual fee cards that offer more value from ever day spending than the Sapphire Reserve card. My hope is that when people see the increased annual fee they will also consider closing/downgrading their card. If that happens, hopefully Chase would consider adding more benefits to the card to make it worth the $550 annual fee.

Either way, my time with the Chase Sapphire Reserve is coming to a close. Once I receive my new Citi Prestige card I will quickly put it in my wallet where my Sapphire Reserve card once resided.