Is the ($550) Chase Sapphire Reserve Annual Fee Worth it? [2020]

The Sapphire Reserve comes with many industry-leading benefits and travel perks but it also comes with a hefty $550 annual fee that puts a lot of people off. This article will take a close look at the value that the many Sapphire Reserve perks offer to answer the question: is the Chase Sapphire Reserve annual fee worth it?

Is the Chase Sapphire Reserve annual fee worth it?

The Chase Sapphire Reserve’s $550 annual fee can easily be worth it if you utilize the card’s benefits such as its bonus earning on dining and travel, travel benefits, lounge access, and travel and purchase protections.

I’ll talk about each of these below and illustrate how they can make it worth paying the $550 annual fee. By the end of this article, you’ll likely see why the Chase Sapphire Reserve is considered one of the top travel credit cards.

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Perks to consider when justifying the annual fee

Below are different perks of the Chase Sapphire Reserve that you want to consider when trying to justify the annual fee. In some cases, the value of these perks is objectively clear but in other cases the perk may have more subjective value.

50,000 points sign-up bonus

When considering the annual fee, I don’t usually factor in the sign-up bonus since the annual fee analysis is usually needed to determine if a card is worth holding on to for the long-term.

Although the Reserve once came with a 100K bonus (which probably won’t come back), the 50,000 point sign-up bonus is worth at least $750 in travel so after earning that bonus, you obviously come out on top in the first year.

But when you start asking about year two, three, etc., the sign-up bonus earned in the first year becomes less relevant and you’re more concerned with the long-term value of the benefits, which is what I focus on in this article.

$300 travel credit

The first factor I would consider is the $300 travel credit. This travel credit can be used on a wide variety of travel-related expenses like:

airlines, hotels, motels, timeshares, car rental agencies, cruise lines, travel agencies, discount travel sites, campgrounds and operators of passenger trains, buses, taxis, limousines, ferries, toll bridges and highways, and parking lots and garages

Many travel credits from other premium cards offer very restrictive terms for their travel credits. For example, the airline credit for some American Express cards is limited to incidental purchases. Those take much more strategy and planning to use and often times they are not even usable for many people.

It’s very easy to spend $300 a year on many of these broad travel categories even in everyday spend. I know some people who use the travel credit to cover parking expenses for work throughout the year.

For that reason, the effective annual fee of the Sapphire Reserve is brought down to $250 by this perk alone.

$60 DoorDash credit

The Chase Sapphire Reserve now offers a $60 annual statement credit for 2020 and 2021 ($60 for each calendar year) that can be used on DoorDash purchases (the food delivery service).

This means that the Chase Sapphire Reserve will now offer a total of $360 worth of credits ($300 travel credit plus the $60 DoorDash credit) to help offset the $550 annual fee to $190.

When factoring in the value of the DoorDash credit, you have to consider the additional expenses involved like food delivery service fees, tips, potential mark ups and prices. So the value of this perk depends a lot on whether or not you were already a user of food delivery services.

If you were, then you can probably value this at $60 but if you were not, you may have to discounted value of this by $10-$20.

Just keep in mind that the Sapphire Reserve also comes with complimentary DoorDash DashPass membership for up to two years and this membership can get you free deliveries and reduced service fees on orders of $12 or more at eligible restaurants.

3X on dining and travel

Earning 3X on dining and travel is great. Using a WalletFlo valuation of 1.73 cents, 3X comes out to 5.18% back.

So if you are trying to offset the $190 effective annual fee, all you have to do is spend $3,667 on travel and dining. That’s very easy to do for many people and that’s why the annual fee is worth it for so many who spend a decent amount on travel and dining each year.

I should also point out that it’s possible to get much more value than 1.73 cents per point. That’s because Ultimate Rewards can be redeemed on a number of solid travel partners, including for some of the top business class and first class cabins in the world like the new Singapore Suites.

In some cases, you could be looking at closer to $.05-$.10 per point which calls for a different analysis.

Lyft benefits

You can also earn 10X on Lyft with the Reserve and take advantage of a Lyft Pink membership for one year when a cardmember activates by 03/31/2022.

Lyft Pink is a special membership program that offers “an elevated Lyft experience” and would normally cost $19.99/month (plus tax where required). So you’re getting a $200 benefit for free.Read more about these benefits here.

Sapphire Reserve vs Sapphire Preferred?

One of the major considerations you need to make with respect to the 3X on dining and travel is your annual level of spending in these categories.

For example, if you value Ultimate Rewards at 1.73 cents per point, then you just need to spend $5,491 on dining and travel a year to make it worth paying the Reserve’s $190 effective annual fee over the Sapphire Preferred’s $95 annual fee.

This is calculated by dividing the difference in annual fees ($95) by the point values (.0173).

Priority Pass Select airport lounges

Priority Pass Select is a program that offers access to over 1,200 airport lounges all across the globe. With your membership, you’ll be able to bring along a maximum of two guests and you also get access to the credits that can be used at Priority Pass restaurants.

Normally, this membership (without guest privileges) would cost $399 and being able to bring in two guests could be worth $52 each visit at the right lounges. So you also have to factor in the value of airport lounge access when justifying the annual fee.

If you don’t really visit airports very often then this perk’s value is obviously less relevant but even if you were only going to visit an airport lounge a couple of times a year, there’s potential for $100+ worth of value here.

And when you think about how much value you’re receiving from the $300 travel credit and the 3X on dining and travel, then you start to realize that the lounge access is essentially a free benefit in some instances.

Primary rental car coverage

The Chase Sapphire Reserve provides primary rental car insurance (collision damage waiver) which is a huge perk because it means that you may not have to file a claim with your auto insurance company if you wreck a rental car.

That’s significant because it means that your monthly premium wont spike after your incident. Also, collision damage waiver will often run you $10-$15 per day when renting a vehicle so you can save on those costs.

So this perk can save you money with your insurance payments but also can save you at the rental car location. I once was quoted at over $100 for rental car insurance for only a few days so once again, the value potential is very high here.

Chase Travel Portal

When you have the Sapphire reserve, you can redeem your points through the Chase Travel Portal at a rate of 1.5 cents per point, which is one of the highest rates offered by a travel portal.

If you used your points toward travel, it’d be like earning 4.5% cash back on dining and travel which is phenomenal.

(Read more about the Chase Travel Portal here.)

Chase Shopping portal

The Sapphire Reserve gets you access to the Chase Shopping Portal which can allow you to earn bonus rewards on many different purchases. For example, you could receive an additional 3% to 5% back at many popular retailers. (The Chase Sapphire Preferred also gets the same access to the portal so that’s something to consider.)

You can read more about this valuable shopping portal here. 

Travel and purchase protections

The Chase Sapphire Reserve offers some of the strongest travel and purchase protections out of any credit card. These benefits have hidden value because you don’t realize how valuable they are until you actually need to use them.

But something like trip interruption or cancellation could easily save you thousands of dollars by allowing you to get reimbursed for non-refundable travel expenses such as airfare, hotels, or even tours. So be sure to be mindful about these perks and how they could provide you with value.

These include:

• Lost or damaged Luggage –-For checked or carry-on bags are damaged or lost by the carrier, you’re covered up to $3,000.00
• Trip Cancellation/Interruption — If your trip is canceled or cut short by covered situations, you can be reimbursed up to $10,000 per trip for your pre-paid, non-refundable travel expenses.
• Trip Delay Reimbursement — If delayed more than 6 hours you are covered for expenses, such as meals and lodging, up to $500 per ticket
• Baggage Delay Reimbursement — If delayed more than 6 hours, you are covered for essential expenses, such as toiletries and clothes for up to $100
• Purchase protections — Covers your new purchases for 120 days against damage or theft up to $10,000 per claim and $50,000 per account (read more)
• Extended Warranty Protection — Extends the time period of the original manufacturer’s written U.S. repair warranty by 1 additional year on eligible warranties of 3 years or less, up to a maximum of $10,000.00
• Return Protection — You can be reimbursed for eligible items that the store won’t take back within 90 days of purchase, up to $500 per item, $1,000 per year.
• Travel accident insurance — Travel Accident Insurance consists of two benefit types, Common Carrier Travel Accident Insurance and 24-Hour Travel Accident Insurance, which provide coverage for accidental death or dismemberment, or a combined loss of speech, sight or hearing, experienced on a covered trip.
• Roadside assistance — Free for up to $50 and up to 4 times per year

When you think about how much these perks can save you or how much value they can offer (not to mention convenience and sanity), it’s possible that these perks alone could make the Chase Sapphire Reserve annual fee worth it at times.

For example I recently had to wait over 24 hours for my baggage to arrive while visiting Auckland, New Zealand. However, I was able to head over to the mall six hours after I didn’t receive my luggage and purchase some new clothes to “hold me over” until my luggage arrived.

Having this type of protection takes a lot of the stress out of travel.

Authorized user fees ($75)

The Sapphire Reserve authorized user fee is $75.

So whether or not it’s worth it to pay $75 in addition to the $550 Chase Sapphire Reserve annual fee will depend on how much you value the authorized user perks of Priority Pass and earning the additional points. For a look at all of the authorized user benefits you can click here. 

Retention offers

Chase has been pretty stingy when it comes to offering retention offers for its own credit cards. However, there have have been some reports of others receiving credits (sometimes called “membership fee” credits). So I would not count on getting the annual fee waived or reduced via a retention offer but it could happen and you odds might be better if you are a Chase Private Client member.

Chase Sapphire Reserve annual fee FAQs

Final word

The Chase Sapphire Reserve annual fee is going to be worth it in many cases. When you total up the value from the $300 travel credit, $60 DoorDash credit, 3X on dining and travel, Priority Pass, and all of the protections built into the credit card, it should become clear whether or not it’s worth it to pay the annual fee. So if your credit score is high enough, I’d recommend to consider applying.