Why Chase Is Putting Sapphire Reserve Cardholders In A Difficult Position
I have been chewing on this for a little while now and I know Shawn has similar feelings as I do on it. We all know Chase recently refreshed the Chase Sapphire Reserve. They increased the annual fee $100 to $550 and added some new “perks”. I wrote an article when this all went down that explained none of these perks were guaranteed long term. Many comments said, so what we will figure that out next year. Chase will for sure offer something if they don’t just extend the offers. But they are not considering the timeline of events which is why Chase is putting Sapphire Reserve cardholders in a difficult position.
Details of the Changes
Just to ensure we are being thorough let’s take a look at the Chase Sapphire Reserve changes one more time.
- The $100 annual fee increase is confirmed and goes into effect April 1, 2020.
- One free year of Lyft Pink. Yup just one so far, not an ongoing perk…
- Earn 10X per points on Lyft rides till March of 2022.
- The DoorDash credits will be in a lump sum which is so much better than smaller monthly credits. But the credits are currently only guaranteed for 2020 and 2021.
The Timeline Isn’t Great For Cardholders
I don’t want to even get into the fact that some people have noticed Lyft Pink prices are sometimes elevated above regular Lyft prices or Uber prices. I instead want to focus on the timeline of things. Many cardholders have an anniversary date of August because that is when the Chase Sapphire Reserve first launched. That puts them in a tough spot since some of these perks are not guaranteed for their entire cardmember year after making that annual fee payment.
I would argue that Lyft Pink is the most valuable perk of the new lineup. At least if you use ride-share services somewhat often. Even with Lyft playing around with the pricing sometimes it is usually going to be cheaper than Uber. But that is only guaranteed till the end of 2020. People could be asked to pay $550 with the most valuable perk only guaranteed for 3-4 more months.
If the perk isn’t extended or extended before your annual fee posts this year you are being asked to trust Chase essentially. Otherwise you are left paying $100 for a $60 DoorDash credit which is a tough pill to swallow.
This doesn’t include the people that have an annual fee posting in April, May or June etc. They are asked to pay full price for something that is guaranteed for the next 6, 7 or 8 months right now. And the fact that Chase doesn’t prorate annual fees anymore means that some people could be stuck holding the bag. That is of course if these perks are not extended or the new ones replacing them are useless etc. Remember that you can still downgrade to a no fee card (like the Chase Freedom) and get a prorated refund. Not everyone will be aware of that though.
Why Did Chase Do This Now?
LAXJeff makes a great point in the comments that I had overlooked. Many people that originally signed up for the card are coming up on their 4 year anniversary. That means they are eligible for a new Sapphire welcome offer if they decide to close the card. I think Chase did the annual fee increase to combat that upcoming expense. This is similar to when they added in the 48 month rule and Sapphire Family rule right as the 24 month anniversary was coming up.
If you are going this route I would encourage you to grab the more valuable offer from the Chase Sapphire Preferred and then upgrade to the CSR down the road. It would give you some time to see how the perks shake out as well.
Final Thoughts
Hopefully Chase updates these perks at some point soon to let Chase Sapphire Reserve cardmembers know what will be happening in 2020 and beyond. Especially before the massive amount of long term cardholders get their annual fee bills in August.
And hopefully they are more forward thinking when they do announce whatever ever changes or non changes happen. Otherwise they are going to put the cardholders in the same predicament in 2021 when the Door Dash credit will be expiring at the end of the year. Almost everyone will have used their credit early in the year and could be asked to pay for the next 4, 5, or 6 months of an annual fee with no credit on the horizon that they are aware of.
I think this timeline and lack of guaranteed benefits means that Chase is putting Sapphire Reserve cardholders in a difficult position. What do you think about it?
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I was able to use Doordash (for pickup) at a place I order from often. Normal price was $50, Doordash price was $71. So it wound up costing $11. Waiting for a $15 rebate from Topcashback.
Another thing is the Roadside Assistance. I’d been thinking of getting AAA, which is about $50. One day at the Costco parking lot my car was completely dead, had it towed with RA. Chase paid the service $50, I paid the $20 over that. It’s been 5 years since I’ve needed a tow so I saved at least $250 (the AAA fee) in the past.
I rarely use Lyft but I think the first 1-2 uses would close the gap in that $100 increase (minus RA and Doordash)
I am AU on my wife’s CSR. Her fee change comes due in August. Can I get the CSP if I drop my AU status, and transfer her points to the CSP.
Don’t forget the 1.5% Reserve vs 1.25% Preferred point redemption. That alone is worth keeping the Reserve.
For some it is. I almost never use the portal myself (transferring the points brings me a better return) but if you use it often then that could be the difference. I would say if you redeem 40K or more a year through the portal then the CSR is the way to go.
“Otherwise you are left paying $100 for a $60 DoorDash credit which is a tough pill to swallow.” For this years fee increase I consider it $100 increase for $120 in DoorDash (2020 & 2021). Will reevaluate next year
You could look at it that way. I would say you will only get one more $60 credit after you pay the higher fee. You already redeemed the one for nothing so I wouldn’t put that into the calculation. It is yours whether you keep or cancel the card.
I have been leaning toward downgrading my CSR but I just booked a flight through the portal for New Years in Costa Rica for the route (DTW>ATL>LIR) and times that I wanted for 25k miles one way. Using the CSR instead of the CSP saved me 5,000 miles times 5 tickets, or $375 at 1.5 cents. Being a family of 5 with award routes getting increasingly crazy (do saver awards on United or American than are less than 24 hours 2 stops even exist anymore?) I feel like the 1.5 times is going to continue to hold value for us.
If you use the portal often enough then the CSR makes sense for sure. American has been offering more last minute deals lately since going to dynamic pricing but it isn’t a guarantee for sure. Most of the last minute space on United goes to United card holders since they open up more awards for them. There is a lot of simplicity in the portal too which people tend to appreciate.
Does the Lyft Pink expire one year after first activating, or at the end of 2020 regardless of activation, or from sign up date, or other?
That is the way I understand it – you get it for one year from activation.
I’m coming up to the renewal in September and am just going to let the card go. I don’t use any of the benefits besides the $300 travel and Priority Pass. I also get PP through my AMEX, so paying $250 for nothing is a tough sell.
I have said I think the Aspire and the CSP is a better overall combo for similar perks that the CSR offers.
They also have recently added back the purchase price protection but still not worth it.
I was surprised to see that.
I’m likely going to see what happens in years to come. They would have to change perks to compete with amex.
Whoa, they added back price protection? Crazy. Of course, that just adds more stress in a way because now I have to obsessively check to see if the price has dropped…
Haha that is true. I have never really messed with it because I always wondered what the value would be in terms of the time I spent on it.
I know this may be a dumb question, I have the Reserve and it comes due in August. Can I keep the Reserve and also get the Preferred without cancelling?
You could. But what’s the benefit?
No, you can’t. One Sapphire per person.
Yup Brutus is correct they only allow you to carry one or the other – changed it in 2018 I believe.
“Otherwise you are left paying $100 for a $60 DoorDash credit which is a tough pill to swallow.” For this years fee increase I consider it $100 increase for $120 in DoorDash (2020 & 2021). Will reevaluate next year
I haven’t kept up on the terms of new signups and I’ve really doubted that CSR would stay in my wallet. I’ve had CSR since Oct 2016 so 2020 completes my 4 years. Remembering now the 48 mo signup bonus language seems to be that I close this card (unless I can find a downgrade option) and pick up the CSP, though it’s been easily 6 years since I got my earlier CSP bonus. Based on my situation what do you think the best thing is? I also already hold the Freedom and Freedom Unlimited, plus other business cards with don’t apply in this situation. Let me know what you think.
I do value the CSR benefits, but my biz travel patterns have changed and I don’t use the benefits as much (same reason I canceled my Amex Plat). I do still enjoy the 3x dining and travel but I do not recoup enough points to rival even the old $450, let alone $550.
I would probably downgrade to another Freedom for the 5X earning since they let you carry more than one unless you are worried about having too many Chase personal cards. You would be eligible for the Preferred welcome offer once it has been 4 years since when your CSR welcome offer posted not when you signed up. The first of the following month is when you would be eligible. So if it posted Aug 15th then you would be eligible on Sept 1.
Would it be better to cancel and apply for Chase sapphire preferred or just downgrade ,I dont use doordash or lyft at all
That depends on if you have had the Reserve for 4 years yet. If not then you can’t get a new welcome offer until it has been 48 months since your last Sapphire bonus so downgrading would be the better option.
I have used my card extensively since it’s issue last year alone 78K it’s also my day to day card, having said that my renewal is September at this point I intend to drop the card either downgrading or drop all together. Given the points you raised more in particular the massive amount of renewals due late summer early fall the question is “who blinks” first us or Chase.
It will be interesting to see. I think the CSR has been a loss leader for them actually so I wouldn’t be surprised if they are looking to trim some cardholders.
Agree but “what if” there is a larger than expected cancelation rate? Or if people downgrade then they would consider that a “win”?
I think a downgrade would be a win versus an outright cancellation since they are still in the ecosystem then. Hard to say overall though – maybe the $100 increase puts them in the black if Doordash and Lyft are fronting a lot of the cost of the perks.
Mark,
100% agree this is a bad look for Chase. I don’t use DoorDash or Lyft, so those credits are worthless to me personally. I’d like to see them find more transfer partners or better yet, have transfer BONUSES like AMEX does.
I think you missed something though, this is year 4 of the CSR coming up. Folks who got this card 4 years ago and cancelled, downgraded, etc; will be eligible for a nice new sign up bonus. I believe the annual price increase is to offset the folks who are going to receive new sign up bonuses later this year.
Obviously you gotta be under 5/24 to make this work.
That is a great point. I do think they are hedging against the close and open people just like they did at the 2 year mark by adding in the 4 year language. I’ll add that in!
I also think transfer bonuses would have been more beneficial than these perks but I wonder if the non travel folks like this type of stuff better since they don’t maximize their points as much.
I’m not too concerned about this, primarily because we are also getting free Lyft Pink and DashPass now before the anniversary date, and I used both doordash and Lyft even before these benefits. $100 for a year of both is a great deal for me, and the 10x points and $60 credit continues on, making the value proposition still decent for the remainder of the year for me, given how much I use Lyft and I will certainly use $60 of DoorDash for the rest of the year.
After this year if Chase doesn’t announce new credits of course I will downgrade to a Preferred and switch my spend to a WOH card.
Good point Mitsu that you are getting the perks now. I am interested to see if they stick with the current lineup of perks or venture out to something else.
I have been researching every top end high annual credit cards and after a stupid amount of reading came to the conclusion that even at 550$ CSR is currently and sadly the best card out. I almost went with Citibank prestige until someone mentioned they pulled all there insurance from a travel card. Basically making the travel card a bad choice. I personally live in the country and the only time i use lyft is in vegas if i get drunk enough that the casino security holds my car hostage till the next day which has happened once and i could have waited for friends to wake up and give me a ride but wanted my car early Am. I got a chance to use doordash once in santa barbra and that was a disappointment as i ordered 2 items and a cookie and the driver forgot my cookie and instead of crediting my card back they gave me a credit for doordash. Even with all that said, with Amex dropping the out of lounge restaurants credits for PPS , i’m not sure if their centurion lounge makes up for it. The way amex words things , the crappy benefits of the mastercard black , the no insurance for Citibank , the difficulty of getting a infinite crystal card , all this seems to make the CSR the only choice. What i would love to see is chase to drop the lyft and doordash and add citibanks cell phone insurance details i believe 1000$ per claim and 1500$ annually cap with a 50$ deductable most top notch cell phones are around 1000$ anyways so paying 50$ to replace a lost stolen or damaged phone on top of the other benefits would be my goto card. If there are any other 500 to 550$ annual fee cards available with better benefits than amex , CSR , citibank i would love to read about them. I almost think the Amex gold business card is my next choice for 295$.
Have you looked at the Aspire card? With Amex offering travel insurance (but still missing car rental insurance unfortunately) it has become even better. It is the only premium card that actually gives you more value than you pay in an annual fee. That is of course assuming you stay at Hilton hotels at least a few times every year.