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.
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?