More Rumored Changes to the Sapphire Reserve Card Coming Next Week

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The Chase Sapphire Reserve Card exploded onto the scene in fall 2016. It quickly became the ‘it’ card with fast earning of valuable points and strong benefits. In that time other issuers have responded with their own improvements and I’ve argued that the card has become somewhat passé. Yet in my view it likely hasn’t been profitable.

Chase is rumored to be making several changes to Sapphire Reserve. I first wrote about three changes that are making the rounds. There are two more additional changes that are being reported.

Sapphire Reserve Is Probably Not A Money Maker

Cardmembers had very strong credit and high annual incomes (as well as significant net worth) and so may not have been especially likely to revolve their balances. As a result Chase would have been relying largely on interchange (merchant swipe fees) to fund benefits. It was rumored that Chase’s models suggested it would take over 6 years to earn back the initial bonus on early customers. That’s never a great position to be in.

Chase filed multiple 8-Ks with the SEC taking charges for unexpectedly large reward costs on the card. And they switched narratives to suggest the product would become profitable via cross-selling (Sapphire Banking, investment accounts, mortgages).

Meanwhile they worked to cut costs on the card, aligning the annual travel credit with the annual fee (so cardmembers couldn’t use the travel credit twice their first year), limiting Priority Pass benefits to two guests (rather than unlimited), and no longer giving points for spend that’s rebated via the annual travel credit.

Rumored New Benefits And Higher Annual Fee

Now Doctor of Credit is reporting on rumors of (3) changes to the card that may be coming:

To be clear, information about the product’s changes aren’t coming to me from Chase and I have no independent confirmation of them – however DoorDash’s site is making benefits available to Chase Ultimate Rewards card cardholders and a higher annual fee has been rumored for some time.

Update: According to Dan’s Deals Chase will offer a $60 annual DoorDash credit starting January 12 (“You have until 12/31/20 to finish the $60 of spending credit and you’ll get another $60 of spending credit in 2021”) and the card will earn 10 points per dollar with Lyft through March 31, 2022 (which stacks with Hilton and Delta earning).

If True These Changes Would Improve The Card’s Economics For Chase

I assume that DoorDash is largely funding the new benefit (which is available to other Chase cards at lesser value) and likely the same with Lyft. The increased annual fee would be another move to shore up the economics of the card. Doctor of Credit suggests the higher annual fee will apply to new cardmembers starting January 12, and that the Lyft benefit will go into effect at that time.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This would most likely be a cancel for me. I’m already debating canceling the AMEX gold. My year end statement said I spent 6K on dining. However, the AMEX Gold gets me just 2 more points per dollar compared to the AMEX BBP which has no AF. I may pick up an AMEX Green since I already pay for Clear and it makes the card worthwhile.

  2. I got the card a few months ago, and will receive the 50k bonus points on the next statement cycle? Does anyone know how soon I can cancel without jeopardizing those points? Because there’s no way these weak ‘perks’ are worth a $550 annual fee.

  3. @Jack,

    For you specifically the Amex Green may be better than the GOLD since you pay for CLEAR, but for most the Gold card is better than Green, unless they spend a lot on travel, but not groceries.

  4. I was just about to upgrade my CSP. Now I’m so glad I didn’t. These changes add zero value to me while increasing the annual fee. This is a real head scratcher, particularly given Chase’s deal with Visa, which lowers their costs a lot. Maybe Chase is preparing a new advertising campaign: Less is More.

  5. I’m okay with these changes. Most of my spend is dining and travel and we’ve gotten incredible value out of the CSR through 1.5 cents per point on travel and transfers to Southwest and Hyatt. Even at $550 ($250 after $300 travel credit), this card is an amazing value for us.

  6. This does widen the gap between CSR and CSP. 3x is so yesterday, and frankly, United miles are now worthless. They used to be the draw of the program for me.

    Yes, yes. You can transfer to VA and then redeem for ANA. But how long will that last, and how many F seats are really available? Maybe 1 Wednesday about 11 months from now which is fine if you’re a travel blogger or self-employed.

    I know because I’m sitting on 290k VA miles that I proactively transferred but can’t really use…

  7. A $100 increase to the AF but no increased earnings to 5x seems ridiculous at this stage. There have has been more gains with the Amex Plat that *could* justify their increase. But Chase seems to have nothing significant to show for thIs possible hike.

    Sad.

  8. Won’t renew mine. Food delivery benefit is useless to me. The extra $100 cost is pretty much net loss. Guess I’m not their target customer. I only travel about once a month.

  9. DoorDash benefit has already been added to my card which is useless to me.

    Here what it says,

    No delivery fees for a minimum of one year on qualifying food purchases with a DashPass subscription from DoorDash – over a $100 value. You and your authorized user(s) will receive at least 12 months (and a maximum of 24 months) of complimentary DashPass when the subscription is activated with a Reserve card by December 31, 2021. Subscription period for all users on a Reserve account will begin and end based on when the first user activates the subscription on the DoorDash mobile application.

    No delivery fees for at least a year to a max of 24 months? So Chase could take the worthless benefit away after a year or keep it going for 2 years. Everyones’ DoorDash will expire at different times which is odd. Then what? Will they replace it with another benefit or extend it? Will we still be paying $550 if they don’t add another benefit? I also will rarely use the Lyft. Bummer cos I really like this card and was getting my moneys worth at $450. I don’t know now at $550.

  10. @Ryan – it takes longer to transition existing cardmembers to a higher fee. There’s usually a future date where this occurs, perhaps three months in the future, and then cardmember renewal dates after that date will be at the higher fee.

  11. Quick and dirty calculations are do the added benefits equal up $8.34/month. I think if we are being honest the answer is almost certainly no. I’ll be interested to see if we get the DoorDash credit and if we can use it all at once or a monthly basis (ala Amex with UBER).

  12. Sad to hear that Chase has to resort to this. My husband and I both have our own Sapphire Reserve cards; so will probably cancel one and just use the other for both of us. Too bad, but I had heard this card has been a loss for Chase for awhile now. $550 fee is a bit ridiculous (even with $250 travel credit reduction); new benefits are meh to me. $50 increase with no stupid new benefits would probably have worked better.

  13. Anyone who actually thinks this card has an effective $450 fee (or even $500-$550 in the future) is crazy. The $300 travel credit is a no brainer so that, alone brings it down to $150-$250 (assuming worst case on annual fee increase. Then you look at other benefits to see if they are of value to you. Personally I get more than $250 additional value from my card. Just like I get over $550 value out of my Amex Platinum card.

    Sure I pay $1500-$2000 in credit card fees a year but I look at everyone and determine if I’m getting more value out of the card through earning or benefits associated with the card than I spend and, in every case, I am. I have no problem cancelling cards I don’t get value from (bye bye AA Barclay’s Red Card since I get better value paying for AA tickets with Amex Platinum and, since I’m lifetime elite, I get all the other flight benefits). It is a personal decision but everyone should do the same thing – again I have no problem paying $550 for Amex Platinum and $550 for CSR (if that is the new fee) since they are WORTH it (at least to me). Also to echo another poster – hopefully this makes people drop Priority Pass so the lounges are a little less crowded!

  14. My Hilton Aspire card has become more valuable to me than the CSR at $550. I can drop CSR and still have priority pass, diamond status, and some credits. I suppose that chase was asking what the dollar breaking point is and apparently it is $100. Losing the so called 50% increase in usage value of the UR points isn’t relevant with the required use of Expedia. The sad thing is that chase won’t be able to get the card value back in line and never get those customers back.

  15. I upgraded to the CSR from CSP in September, 2018. Does anyone know if it’s possible to downgrade back to CSP?

  16. @AC – I agree people really need to re-frame the annual fee as $150 going up to $250. The travel credit of $300 is automatically applied to such a wide range of purchases you don’t even have to think about it to get it back (unlike airline incidental reimbursements, etc. on other cards).

    My problem is I can easily eat $500 of food at Priority Pass restaurants in SFO, LAX, BOS, etc. but my company would reimburse me for those meals anyway so all I get out of it is a little less guilt and more brownie points for not eating more expensive meals…I don’t really place much of any value on the actual lounges themselves as they are not always in my terminal and often too crowded to be worth it.

    At this point the real comparison for me will be: is the $95 CSP @ 1.25 pt redemption value vs. $250 CSR 1.50 pt redemtion value a good deal? I have to earn 62,500 pts per year to break even now on the CSR vs. the CSP. Previously it was only 22,000. I’ll have to go through my records to see if I earn an average 5,200 pts per month but off hand I don’t think it’s that high.

  17. The Reserve card would not be worth keeping for me at the higher price, unless they did away with the $75 authorized user fee which isn’t likely. CSR seems to be the only card with this fee.

    Oh well, I squeezed a heck of a lot of value out of this card so far.

  18. change means downgrade to CSP with additional user for $0 along with cancellation of wife’s chase card costing $95. Basically save $255 on down grade and $95 on other card ($350 a year). Plus move huge spend away from Chase. Be interesting if Chase gets a win or loss out of this action.

  19. I’ve seen a lot of talk about downgrading I’d be interested in what the actual numbers show…how many people follow through

    All I know is I’m going to empty out my UR points this year before my annual fee renewal in December and make a decision then.

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