Which Chase Premium Card is Better in Year 1
Some Of The Offers Listed May Have Changed
In the comments section of my latest Great Debate series article I got into an interesting discussion that sparked the idea for this post. Which premium Chase card is better in the first year? The Chase Sapphire Preferred or the Chase Sapphire Reserve? Pretty much everyone reading this is thinking the Chase Sapphire Reserve, duh. The CSR is the better card over the long term, but the question is if it is better in the first year of card membership?
I will be approaching the answer to that question using my personal experiences. This is my opinion and this is not a one size fits all answer but I think it will give everyone something to consider when making the decision.
Comparing the Cards
Shawn did a similar post shortly after the CSR was first released. The Chase Sapphire Reserve was the clear winner but things have changed over the last year and a half. Chase has added new rules to the Sapphire line of products. You are only allowed one Sapphire bonus every 24 months, whether it is the CSP or CSR. One cancels out your chance at the bonus for the other. You can no longer carry both cards at the same time either.
The new rules make the decision between the two cards more important. But, that wouldn’t change the results from over a year ago. The changes that leveled the playing field were the reduction in the Sapphire Reserve’s sign up bonus. Along with limiting the travel credit to once per cardmember year, instead of calendar year. Those changes makes the decision a little bit tougher.
Sign up Bonus
The sign up bonus for both cards is currently 50,000 Ultimate Rewards points after $4000 in spend within the first 3 months. The 50,000 UR bonus is a stark contrast when compared to the Chase Sapphire Reserve’s launch bonus of 100,000 UR points. There is no longer a difference in the sign up bonuses but you do get 5,000 points for adding an authorized user with the CSP. You do not get that with the reserve.
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Annual Fee
The Chase Sapphire Preferred’s annual fee is waived the first year where the Chase Sapphire Reserves has a $450 annual fee the first year. The CSR does come with a $300 travel credit, and even if you valued that credit at 100% face value the CSR has a $150 higher annual fee in the first year.
Earning
The Reserve card earns 1 more point per dollar in the travel and dining category. This is very important for anyone who has reimbursed expenses from work or large spend in those areas.
The Perks
The CSR crushes the CSP when it comes to perks, no doubt about that. But, what are the value of those perks overall? Let’s take a look at the main ones and I will try to assess it’s value. Remember this is based on my personal experience.
- 1.5 cents per point versus 1.25 when going through the portal – ($30)
- Transferring UR points to partners brings a better return but I will assume that I may use the portal for a non chain hotel or a discounted room etc. one time at $150 per night. I would need 12,000 UR points with the CSP versus 10,000 with the CSR. Those 2,000 extra points would be worth $30 to me.
- Priority Pass Lounge access – ($50)
- I personally don’t put a ton of stock into this since everybody and their brother offers a Priority Pass membership (not with as generous a guesting policy though). Also lounge access is not really necessary and PP is somewhat limited in the United States. This perk’s usefulness depends a lot on where you fly out of and where you are going. My airport does not have a PP lounge so it is worth less to me then it would be for some others. I would say that a lounge may save me $10 per airport trip in drinks and food. I do think people tend to get to the airport earlier and eat and drink more than they normally would just to justify having lounge access. Let’s say I use it 5 times per year at a value of $10 per visit.
- TSA/Global Entry Credit – ($0)
- This is offered by so many cards that I don’t put any real value in it. It is also a luxury and unless you are a road warrior I wouldn’t suggest paying out of your pocket for it in the first place. So if I wouldn’t pay for it without the perk then why should I value it.
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My Recommendation
Let’s crunch the numbers a little bit. Both cards have the same sign up bonus but the Chase Sapphire Preferred has a 5,000 point AU bonus so it comes out slightly ahead.
The Chase Sapphire Reserve has a $450 annual fee. The Chase Sapphire Preferred’s annual fee is waived the first year. The CSR does come with a $300 travel credit. I discount travel credits 10% from their face value (more detail on why here) putting the credit’s value at $270 for me. That would leave the CSR with a cost that is $180 higher in the first year.
The CSR’s perks close the gap a little bit more. I would personally receive $80 in value from the perks. That brings the difference in annual fee down to $100. Add in the 5,000 (worth 1.5 cents a piece) more points and that is a $175 difference in value.
Now that I have the final difference in cost we can calculate what I would need to spend to make up the difference. If we give UR points a valuation of 1.5 cents a piece I would need to spend $11,666 dollars in the dining and travel category to make up the difference.
I personally don’t spend that much on dining and travel. Because of that I would be better off getting the Chase Sapphire Preferred if I was only keeping the card one year.
Where You May Differ
Someone who travels a lot for work, or pleasure, and would get more value out of CSR’s perks may come to a different conclusion.
Or if you had a great Priority Pass lounge at your home airport that could also change your figures. Something like Capers Cafe at PDX where they give you $28 in credit at the restaurant as your lounge access.
Someone who has reimbursed travel from work will always come out ahead with the CSR.
But, I would say the majority of Americans would get a better return from the Sapphire Preferred. Most people do not travel enough to offset the difference in the annual fees the first year.
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Conclusion
While many of you will most likely disagree with me that the Chase Sapphire Preferred is the better card to get the first year for people that only have leisure travel. I hope that I at least gave you a road map on making the decision for yourself.
Like I said in the beginning this is not a one size fits all answer. I do believe the perks are overvalued somewhat with the CSR. With the changes made over the last year I don’t think the massive value is there anymore. The fact that the Preferred card waives the annual fee the first year really levels the playing field in my opinion and pushes it over the top.
When you look at year two and beyond the CSR would be the more valuable card. Mainly because the difference between the annual fees shrinks.
Let me know what you think in the comments section. Do you think most people would get more value from the CSR with the changes that have gone into effect?
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[…] The Chase Hyatt Visa could be a good alternative if you are unable to get the Chase Sapphire Reserve or Chase Sapphire Preferred. […]
Under “Sign up Bonus” I would give the edge to CSP. You can get another 5,000 points for signing up a (free) authorized user. On CSR you don’t get bonus point for signing up an authorized user, and that AU would cost $75 per year.
Great point – can’t believe I forgot about that!
I have had both cards – the CSP bailed me out of a rental car fender bender in Italy a couple of years ago with the car insurance feature. However, I am sold on the CSR – I have used the 1.5x UR travel portal to stay at great places recently like the Thompson Seattle and Hotel Georgia in Vancouver. Three UR points per dollar spent on travel and dining coupled with the 1.5x UR travel portal makes this a fantastic card for me!
‘It is also a luxury ‘
you are calling TSA pre check/global entry which costs a princely 100 bucks for five years a luxury? even if I fly twice a year, that cost is more than justified. it has literally saved me hours and i am hardly a road warrior.
If it wasn’t included free with a ton of different cards I don’t think the average joe would pay the $100 and do the interview etc. for it. There have been plenty of times, in my experience, that the TSA line is just as long if not longer than the standard line. I think a lot of the value depends on what your home airport is like though. If it is an extremely busy one like ATL then you would probably value it more.
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To Pam and Audry:
I think that CSP also has primary auto insurance. This is from CSP’s benefits website:
Your Auto Rental Collision Damage Waiver has been enhanced from secondary coverage to primary. So if the unexpected occurs, you can now rely on an enhanced level of coverage. Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is primary and provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most rental cars in the U.S. and abroad.
Sure does…I owned the CSP before they upgraded it from secondary to primary coverage, thanks!
I know this posting primarily deals with 1st year usage of both cards, but since I think either card is worth holding onto, and using, in subsequent years, I would like to take a longer-term approach and also focus on Year 2, onward:
To cover the $95 CSP fee requires $3,800 of spend in its 2x bonus category (.0125 redemption value x 2 bonus points = .025; $95/.025 = $3,800).
To cover the $150 CSR residual fee (after deducting the $300 travel credit) requires $3,333 of spend in its 3x bonus category (.015 redemption value x 3 bonus points = .045; $150/.045 = $3,333).
The CSR requires $467 less in spend than the CSP to break even in subsequent years! That is a standalone result.
As much as I appreciate both cards, I would nevertheless like to propose a 5th hotly debated travel hacking topic: a consumer should start their credit card portfolio with a CSR/CSP card. I find almost every travel blogger recommends these 2 cards as go-to’s because of Chase’s 5/24 policy. I have touched on this briefly in Mark’s 4-part series, but I would personally feel remiss in recommending either card to a friend when there are plenty others that might be a better fit for their travel objectives & budget.
CSR/CSP provide no hotel status, for one thing. I think room upgrades are even MORE important if a person does not do much traveling, because it’s really appreciated when one is finally needed. Second, best case in spend on either card is still $277/month ($3,333 above) to break even from the fees. A person’s spend really needs to be evaluated before using either the CSR/CSP.
Anyways, those are just a couple of my thoughts in addressing the suitability of either card. I personally would like for us all to have a conversation on the topic, because there is clearly no shortage of product out there yet these 2 cards remain automatic recommendations within the travel community. Thank you all.
I may have to do an article on that. While I do think everyone should start with Chase for obvious reasons I usually suggest getting a 60k Southwest card to newbies and then following it up with another one to get the CP if they feel comfortable after the first one. That is assuming they can use SW airlines.
Scenario: a (hypothetical) 30-year-old makes an average salary of $40k/year. He owns a couple of old, paid-off department store cards, but is looking for a primary card that can help him towards both an economy-fare flight and a nice hotel for his annual vacation with his wife. He prefers “no fee,” but definitely not over $100/year (or 2% of his weekly salary). He has a “good” credit score. He plans on charging $750/month to the new card and not carry a balance. He holds a mortgage and a car note but no other debt.
I think this is a typical example. Do you think he can achieve all he wants with 1 card and, if so, what would you recommend?
Typo: s/b 12% of his weekly salary.
I don’t think he, or most people for that matter, can accomplish it with one card. You can reduce your travel costs with one card but I think most people need multiple sign up bonuses yearly to reach their goals. People with a small business with a lot of monthly spend may be the exception.
I do think Chase UR cards are the best cards for a hotel/airline combo earning card. Hyatt, SW, BA, and United are tough to top.
I think the best all around card for most people is the Amex EDP with it’s gas, grocery, and everyday spend return rates.
The best hotel card imo is the Surpass (aspire I think going forward) since it comes with a good earning rate plus the best credit card offered status.
That is my take at least.
Thanks, Mark, I like it!
Looks like this changed on 8/26/2018. CSP terms now show CDW car rental coverage as secondary in home country and primary outside home country. chasebenefits.com /sapphire
You can use the credit on CLEAR? I always just thought it was TSA Pre or Nexus
Sorry – typo. It is good for TSA and Global Entry. I have updated the post – thanks for the catch!
Doesn’t the CSP also offer primary car insurance?
Yes it does that would be something else to consider. I almost never rent a car so it would change my figures at all really. But everyone has to make their own calculations.
CSP car rental is primary for rental soutside your resident country (most people this will be the US). So in the above example, the CSP would have been primary. But while in the US (for most people) CSP is only secondary.
My husband & I just got home from Cabo. Hertz wanted $50/day for Collision insurance. Chase gave me a letter telling them I have primary thru my CSR (but not CSP cardholders). I saved $300 on that alone!
When leaving, we enjoyed unlimited free cocktails & apps at the airport lounge with our Priority Pass card (would have cost $54 with the CSP). And we avoided the crowded gate area.
A person does have to travel to reap all the CSR benies, but I find more value the longer I own it. I owned CSP first and it was limiting in direct comparison. Thanks for your thoughtful analyses, Mark.
Thanks for the great comment per usual Pam!
Not quite. CSP and most other Visa Signature car rental coverage is secondary when renting in resident country (United States, for most people), but is often primary when renting outside your home country. So you didn’t really save $300 in CDW because a CSP would have been primary for a car rental in Mexico, assuming you are not a Mexican resident.
First year, yes (with your assumptions), but as you say the fee spread in Years 2 on means $3,666 more in spend with the CSR to come out ahead of the CSP, after the $300 Travel Credit ($450-300 = $150-95 = $55/.015 = $3,666).
This is a random unique situation, but we do a lot of Disney travel. If you use a multi-card CUR strategy to earn lots of points, the 1.5 cents per point you can get on vacation packages (Disney hotels plus park tickets) with the CSR starts to add up over the 1.25 with the CSP.
That would be a good reason to choose the CSR over the CSP. Thanks for the comment Mark!