Expired: Detailed Analysis of Chase Sapphire Reserve Benefit and Annual Fee Changes

About These Changes

Actually, when the Chase application-link bug appeared earlier, some people had already discovered the $550 Sapphire Reserve application link. Then in January 2020, more information finally started coming out. Now that more details about the annual fee increase and added benefits have been confirmed, let’s lay them out, discuss what to do now, and analyze whether this card is still worth holding long term after the refresh. Here is a summary of the changes:

• [Confirmed] Starting January 12, 2020, the annual fee will increase to $550. For existing cardholders, the annual fee will begin changing to $550 starting in April 2020 (official annual fee change link)
• At the moment, you cannot upgrade from a lower-tier card or product change into it. You will need to wait until the new version is officially announced on January 12 before upgrades are allowed. Chase’s official explanation is that this is due to a “system upgrade.”
• [Confirmed] Starting January 12, 2020, cardholders will receive Lyft Pink membership, worth $19.99/month, plus 10x points on Lyft purchases
• [Confirmed] You will get $60 in DoorDash Credit each year (confirmed as a one-time $60 credit per year, currently only stated through 2021). In addition, CSR/CSP cardholders will also receive 2 years of DoorDash delivery fee waiver benefits, worth $9.99/month

It looks like Chase reached partnerships with DoorDash and Lyft and added these related perks. But these benefits are contract-based, and such deals usually last only 1-2 years. So it’s possible the benefits will change again after 2 years. Overall, after these changes, Sapphire Reserve gets Lyft to compete with the Uber benefit on the AMEX Platinum, and DoorDash to compete with the dining credit on the AMEX Gold. You could say that merchant partnerships may become the mainstream model for premium cards going forward.

Should You Apply Now?

Right now, the official application link still shows the $450 annual fee, and it will probably be taken down on January 12.

My recommendation is: if you plan to apply for this card, strongly consider applying right away. After January 12, you will automatically get the new benefits while only paying the old $450 annual fee. If you value it over one year, that means $450 in exchange for $300 (first-year travel credit) + $300 (second-year $300 credit before immediately getting rid of the card) + $60 (2020 DoorDash) + $60 (2021 DoorDash). That is absolutely a great deal. After using the second-year credit, you can just close the card or downgrade to something like Freedom.

Keep in mind that you must not currently hold this card, must not have received a Sapphire-family sign-up bonus (including CSP) within the past 4 years, and must not have opened more than 5 cards in the past 2 years (counting all cards). Also note that this card has a minimum credit line of $10,000. If your income is relatively low, your credit score is not strong enough, or your credit history is less than one year, it’s probably better not to force it.

That said, I also have a feeling this change could very well come with an increased sign-up bonus. My guess is maybe an extra 10,000 points just as a token bump. Pure speculation, of course. Basically, you’d be risking the extra $100 annual fee in exchange for the possibility of a better sign-up bonus.

What Should Existing Cardholders Do?

If you already have the card and your annual fee is charged before April 12, I’d suggest keeping it for one more year. Originally, you were taking on about $150 in effective cost, but now with the added $60 + $60 in DoorDash credit, plus the delivery membership benefit, it’s actually pretty decent. The Lyft membership benefit is useful if you have real use for it; otherwise it’s just wasted. If after another year you feel these credits and benefits are not meaningful and the card is not worth holding long term, then closing or downgrading it is fine.

If your annual fee is charged after April 12, then you’ll be paying the extra $100 annual fee, so you should weigh whether the added $120 in credits plus the Lyft benefit is worth that extra $100 to you.

Most importantly, no matter what month your annual fee posts, be sure to use up the $300 airline credit around the time your next annual fee is charged, then close or downgrade the card within a month.

Is It Still Worth Keeping Long Term After the Refresh?

First of all, the original CSR was definitely worth holding long term. For a $450 annual fee, you got a floor value of 1.5 c/p on points, Priority Pass membership, transfer partners, 3x on travel, and an extremely easy-to-use $300 travel credit (you could even trigger it in some cases via WeChat Pay). Calling the effective annual fee $150 was not unreasonable.

After the annual fee increases to $550, the extra $250 is basically buying you the 1.5 c/p floor value, Priority Pass membership, transfer partners, 3x on travel, and $60 in credits. Personally, I don’t think that is especially compelling, because there are other ways to get these benefits. For example:

• 1.5 c/p and transfer partner functionality: Once you have accumulated enough points, you can upgrade a Freedom card to CSR to get these features. Product changes are usually instantly approved with a quick phone call. Of course, you do need to make sure the card being upgraded has a $10,000 credit limit.
• Priority Pass: Most premium cards already have it, such as Aspire, Altitude Reserve, Platinum, and so on. One such card is enough.
• 3x on travel and dining: airfare with Platinum earns 5x; dining with AMEX Gold earns 4x; Prestige earns 5x on airfare and dining, and 3x on hotels

So compared with the old CSR, it is not quite as suitable for long-term holding. But compared with other premium cards on the market, like Prestige and Platinum, it is still more or less in the same ballpark.

Summary

Adding a bunch of miscellaneous benefits to premium cards and then raising the annual fee will likely become a fairly common approach in the future. A lot of these perks can make people feel like they are getting a great deal when applying, but in reality they may not use them much. Also, some merchant-specific credits often lead people to spend more with those merchants without even realizing it, and may even lock them into that spending pattern over time. For most credit card enthusiasts, this kind of change is definitely negative, because what we care about is the effective annual fee, not all these extra bells and whistles.

Personally, I’m pretty disappointed with these CSR changes. Benefits like Lyft and DoorDash are not a particularly good match for CSR’s premium positioning. If the benefits had instead been enhanced elite status with Hyatt or Marriott, I think that would have been much better than the current setup.