This week there were some rather bad news on the credit card horizon for U.S. based customers as Chase has announced a hike in fees for their Sapphire Reserve Visa Infinite Card to $550 per year.
With the new annual fee of US$550 the card is on the same level as the American Express Platinum but without the value added benefit of airport lounges and (let’s face it) the prestige that still comes with an Amex Platinum card.
Bloomberg has confirmed the fee increase through a JP Morgan Chase Bank spokesperson.
The popular Chase Sapphire Reserve credit card is about to get more expensive.
JPMorgan Chase & Co. is boosting the annual fee for customers to $550 from $450 as it adds new perks with partners such as DoorDash and Lyft Inc., according to bank spokeswoman Ashley Dodd. For new cardholders, the increased annual fee will go into effect on Jan. 12, while existing customers will pay the new fee once their cards renew starting April 1. …
JPMorgan said Tuesday that it’s adding the perk of a year of lower DoorDash fees, and on Wednesday said it’ll give Sapphire Reserve customers $120 in statement credits for the food-delivery service. The bank also will partner with Lyft to offer Sapphire Reserve members a free year of Lyft Pink, a new monthly membership program from the ride-sharing app, as well as 10 points per dollar spent with the company, Dodd said. …
Since JPMorgan introduced the luxury card, industry watchers have wondered how the bank could make money on it while still offering generous benefits like three points per dollar spent on dining and travel, which can be redeemed for more than one cent per point. Analysts at Sanford C. Bernstein & Co. estimated in 2016 that the bank wouldn’t break even on its investment in the card for more than five years.
The last point is an important one.The Chase Sapphire Reserve with it’s $450 annual fee comes with a $300 extremely flexible travel credit that is pretty much as good as cash. It also includes a Priority Pass that at least at the moment is still valid for Restaurant visits, a benefit that Amex has scaled back on their Priority Passes. Add to that the high earning rates in Ultimate Rewards points on Travel & Dining the card has so far been a no brainer, at least for myself.
The new benefits can be described in one word: Lackluster. A food delivery service and a Lyft Premium membership, together with a 10X earning rate for Lyft charges. Don’t use either? Too bad for you.
Before bashing Chase too much I want to put that in perspective to the American Express Platinum.
Amex Platinum also costs $550 per year, comes with a $200 airline specific credit that is rather difficult to use (no more gift card purchases, small [sub $100] ticket charges and/or incidental fees only) and 2x $50 at Saks 5th Avenue as well as $15 per month/$35 in December UBER credit. The big bonus: Centurion Airport Lounges. the big minus: Amex Platinum earning rates are horrible except for airline tickets (5X). They do have attractive “Amex Offers” on a regular basis though that can earn you a decent amount of points over the year if it’s relevant to the spend you usually do.
What is the exact rulework for new and existing Chase Sapphire Reserve Customers?
For new cardholders, the increased annual fee will go into effect on January 12, 2020. That means one has still two days including today to apply for the card under the $450 fee schedule. The bonus offer is just 50,000 Ultimate Rewards but better than nothing.
Existing customers including myself will pay the new fee once their cards renew starting April 1, 2020. My card renews in May so that’s pretty bad luck. I have already decided that I won’t be renewing my CSR card for a $100 more and no extra added value. I will request a downgrade to the Sapphire Preferred card which still earns 2X on Dining and Travel at $95 a year – I can live with that.
To make a decision which Premium Credit Card to carry is individual, not everyone has the same requirements. If you value Centurion lounges at the airport and like a bit of “bling factor” then the Amex Platinum represents the best value.
If one can live with an essentially $250 annual fee for a Visa Card that is accepted pretty much anywhere, carries a full fledged Priority Pass and has primary rental car insurance coverage then the Sapphire Reserve is still a good choice.
One could also switch towards the Premium Co-Branded cards that earn Hotel or Airline currency but there are too many of these products to get into right now.