Should You Get A Chase Sapphire Reserve Card?
Yesterday, Chase blew up a random Wednesday in June like no other. There was some positive mixed in with the announcement from the Chase Sapphire Preferred refresh news. However, that news was quickly overshadowed by one singular negative change. The reduction in the Sapphire Preferred transfer ratio to World of Hyatt. Even though there were four or five positive changes, that one simple move made the card refresh an overall negative for many. Hyatt is Chase’s most popular / valuable transfer partner in these circles after it. It left many wondering, should you get a Chase Sapphire Reserve card? That is the conclusion Chase is hoping for with these changes after all. Let’s dive into the numbers.
What My Plan Of Attack Would Be
Before we get into the long term math, I wanted to share what my plan of attack would be if I were caught up in this situation. I don’t have any of the Preferred or Reserve cards, so I am not in this boat right now. It is likely that I will be some time next year though. Here is how I would handle it if I were in the middle of this situation right now though.
Accrue Until The End Of September & Then Dump
Early on, nothing would change with my Sapphire Preferred card. I would continue to earn Ultimate Rewards per usual, maybe even taking advantage of the new Preferred earning categories. I would transfer to partners as needed, but would stockpile what I could up until September.
At that point, I would decide if Hyatt still made sense for me. We would likely understand more what the devaluation looks like then. As the calendar extends, and as they get to populate more dates with their new 5 tier chart, we should have a better understanding of how bad it really is. If Hyatt still makes sense at that point, then I would transfer as many points (all?) that I needed over to Hyatt before the transfer ratio devalues.
Then Go Back To Normal, Rinse & Repeat … With A Change
After that, nothing would really change. I would continue to earn Ultimate Rewards as I normally would. That is assuming you haven’t switched your focus to Bilt or Citi by now. If you are still mixing in Ultimate Rewards, maybe via the new gas category etc., then I would be stock piling them a bit. Transfer to other, non Hyatt partners as needed along the way.
Once my World of Hyatt stash got low I would then need to make an adjustment. Once again, I would take a look at my World of Hyatt bookings and see if a transfer still made sense. Maybe I had moved onto Hilton, IHG, Marriott or ALL etc. by then. Maybe Hyatt is not a huge deal to me any more and no change is needed. If that is the case then I’ll transfer to Aeroplan, United, Southwest or something else.
If Hyatt is still important then I would upgrade to the Sapphire Reserve card at this point. That would unlock the 1 to 1 transfer rate. Then I would transfer the amount of points (all?) I thought I needed to cover me for a while at Hyatt. After that I would decide if the Sapphire Reserve was worth holding for a while (math below). There is no upgrade bonus, or Amex 12 month hold rule after all.
What About Bilt?
You may be thinking that all of this is pointless because of Bilt. You may be wanting to move all of your spending over there instead. I can’t fault that line of thinking. They have Hyatt as a transfer partner, and it is still at a 1 to 1 rate, even on the no annual fee card.
Even if that is what you are considering, I imagine you are still going to earn 5x Ultimate Rewards from your Ink Cash and Freedom Flex cards though. You may even grab a few welcome offers here and there. If you don’t value Chase’s other transfer partners much then you will still need to consider Hyatt for those points.
Having said that, I plan on keeping my Bilt points for other, more valuable partners. My first goal would be to take advantage of a rent day transfer bonus. If I can time that up with an ALL Accor or Alaska Airlines bonus, then all the better. I value both of those above the 1.3 cents or so I assume Hyatt will be worth soon. That would have me using Ultimate Rewards for Hyatt, Aeroplan and United. I would use Bilt for Alaska and ALL Accor, with maybe some Japan Airlines mixed in there for specific trips.
Breaking Down The Math
What if you are a set it and forget it type of person though? That is where the math comes into play when answering, should you get a Chase Sapphire Reserve card. I’ll give you a range of options, since I don’t know what you value the Reserve’s card perks at.
You Need To Go Through The Sapphire Reserve’s Card Perks & Assign Values
Here is your homework section. You need to assign your own values to each of these perks:
- $300 Annual Travel Credit
- $300 Sapphire Exclusive Tables credit ($150 every 6 months)
- $500 The Edit Hotel Credit ($250 per use – two night minimum)
- Can top off with Ultimate Rewards points at up to around 2 cents per point
- $300 in Stubhub credits ($150 every 6 months)
- Sapphire lounge access
- Apple TV & Music subscriptions
- Up to $10 in monthly in-app Lyft statement credits
- $25 each month to spend on DoorDash
- $5 monthly promo to spend on restaurant orders
- $10 promos each month to save on groceries, retail orders, and more.
- At least 1 year of DashPass
- $10 per month on Peleton
Doing The Math
Once you have put a valuation on each of those perks you need to subtract that total from the $795 annual fee. I caution that you need to be really honest with yourself on the numbers though. If it isn’t for something that you already pay for then don’t mental gymnastics yourself into saying you “could” use it.
Once you have that number subtract another $95 from it for the Sapphire Preferred annual fee. If you are left with a negative number, then the Sapphire Reserve is for you. If it is positive, then we will carry that total to the next step.
For Example:
For my visual people out there I’ll give you a for example. Let’s say you value the Sapphire Reserve’s card perks at $500. Then your math would look like this:
- $795 annual fee – $500 credits value – $95 Sapphire Preferred annual fee = $200
If you really want to get frisky then you could add the $100 Sapphire Preferred hotel credit in there too. Put it at whatever valuation you have for that perk.
What Is The Hyatt Transfer Rate Worth?
Now that you have that cost number from the difference in card annual fees and card perks, we need to look at the value of the Hyatt transfer ratio. Let’s assume the value of Hyatt points will be 1.3 cents per point going forward. We would need to multiply that number by 25% (the lower Sapphire Preferred transfer rate), which is $0.00325.
The difference between the two numbers is your cost of keeping the Sapphire Preferred over the Sapphire Reserve. This is where the difference in annual fee cost (minus card perks) comes into play. We can use that to see how many World of Hyatt points you would need to transfer to make up for the difference. Let’s assume everyone gets at least $250 in value from the Sapphire Reserve card perks and work from there.
I will be dividing each annual fee difference amount by $0.00325 to get how many points would need to be transferred to make up for the difference / break even point:
- $450 difference / $0.00325 =Â 138,461 Ultimate Rewards to Hyatt
- $400 = 123,076
- $350 = 107,692
- $300 = 92,307
- $250 = 76,923
- $200 = 61,538
- $150 = 46,153
- $100 = 30,769
- $50 = 15,384
The numbers might tell a surprising story for you. I am sure a lot of people transfer more to Hyatt on a yearly average than most of these numbers.
The Mental Anguish PartÂ
When deciding if you should get a Sapphire Reserve card or not, you also need to consider the mental anguish side of things. Maybe paying more for something that used to come included is just too far of a bridge for you to cross. Maybe you have no more mental space for another coupon book either. This could just be the last straw that breaks the camels back in terms of extreme couponing. I totally understand all of that if that is where you are at.
I would encourage you to take a few days and then circle back. Heck, you don’t really need to circle back until September if you already have the Preferred card. Come at it with a clear mind then, run through the numbers again and then decide. Or, you could take the route I laid out above.
What About Door #3?
There is another option here too. Maybe not a fix everything option for big earners, but it could be something to mix in for sure. There is a little out of the box option that has flown under the radar a bit the last few years. Zack broke it down really well in the MTM Facebook Group too.
This option involves the Chase Aeroplan card and its pay yourself back feature. While it is no longer an uncapped option, like it was at launch, it can still come in pretty handy. With the Aeroplan card you can book any travel you want directly with the card and then wipe it off at 1.25 cents per point (up to 200,000 points per year). This includes competing airlines and any hotel brand you prefer etc. It gets better with some deal stacking though:
- 10% bonus on transfers from Ultimate Rewards (when 50,000 point or more transfers)
- Capped at 25,000 bonus points per year (250,000 points via 50K+ transfers)
- Pair it up with a transfer bonus from Chase Ultimate Rewards.
- If you look at our history of transfer bonuses data base then you can see there was a 20% one back in April.
Let’s say you stack all of that and transferred 150,000 Ultimate Rewards over to Aeroplan back in April:
- 150,000 Ultimate Rewards -> Aeroplan Miles
- +30,000 Aeroplan miles from the transfer bonus
- +15,000 Aeroplan miles from the 10% cardmember transfer bonus
- = 195,000 Aeroplan miles, or $2,437.50 in pay yourself back travel.
That is $2,437.50 for only 150,000 Ultimate Rewards points, or 1.625 cents per point.
Should You Get A Chase Sapphire Reserve Card: Final Thoughts
Hopefully I have given you three viable options to move forward with when it comes to Ultimate Rewards points after the Hyatt transfer ratio devaluation. The best option for you may be to upgrade to the Sapphire Reserve for the higher transfer rate. That is annoying, because you used to get it for $95, but we need to adjust with the times. Or, maybe you are okay just striking while the iron is hot every few years with a card upgrade? You could even throw out the baby with the bath water and go all in with the Aeroplan card plan. That allows you to book whatever you want, when you want after all. There is something to be said for simplicity in today’s world.
Let me know what you think about all of this down below, or over in the MTM Facebook Group.
