Hey, it's Ernest from Trip Astute. In this video, I'm going to address a question
that seems to come up a lot on the channel, which is: "which card should I get --
the Chase Sapphire Preferred or Sapphire Reserve card?" the Chase Sapphire cards
(light chiming music)
The Chase Sapphire cards
are some of the best travel rewards cards on the market. It's often the first
card that gets recommended due to Chase's strict approval rules like 5/24 and 2/30.
However, deciding between the two cards can be tough. I know the Sapphire Reserve has
a $450 annual fee that's hard to stomach for a lot of people, especially if you're
just getting started in the hobby. So today, I thought I'd walk through my
thought process on deciding between the Sapphire Preferred card and Reserve card.
You might feel different about it and that's completely ok. Everyone's going to
have a different spending and travel pattern, so there's no right or wrong
answer. But I thought it would be helpful to hear why I prefer one card over the
other. If anything, you might be able to baseline my use case against yours to
see if you would benefit from one card over the other. But first, if you're new
here, I want to welcome you to our channel. Trip Astute is a travel channel
that is focused on sharing ways to make travel easier, affordable, and more
enjoyable. Traveling can be stressful and expensive, so we're looking for ways to
help you maximize your experience through travel tips points and miles, and
innovative gear. If that's something that interests you, then consider subscribing
to our channel. So, getting back to credit cards, those of you that watch this
channel regularly know that I have the Sapphire Reserve and I really like it. I
got the Sapphire Preferred in 2012 and I honestly never imagined that it would
ever get replaced. Then when Chase announced the Sapphire
Reserve in 2016 with a 100,000 point bonus offer, it seemed like a
perfect card had arrived for me, for the following reasons. Number 1:
100,000 points opening bonus. This was the initial offer when the card first
came out. Since Chase reported several quarters of losses after the card was
released, they reduced the bonus to 50,000 points and have kept it there
since then. For those of you who got the card when it was first offered, it was an
incredible deal and good reminder of why might be sometimes
worth slowing down on your credit card applications in case an offer like this
comes around again. You don't want to miss the opportunity because you've been
aggressively applying for so many cards. Number 2: Additional bonus points for
dining and travel. Since these are categories of spend that I tend to use a
lot, I knew I would be able to take advantage of it. It's only one more bonus
point over the Sapphire Preferred, but it all adds up.
Number 3: Annual $300 travel credit. This credit is automatically applied to
your account every year as credit whenever a qualified expense is charged.
Number 4: Priority Pass lounge membership. The Reserve card comes with
lounge membership for the Priority Pass network. Currently, you're allowed to
bring guests with you into the lounge though they're restricting the number to
two guests starting in late August. You can also use Priority Pass to get
reimbursed for meals at some airport restaurants. Number 5: Primary car
rental insurance. This allows me to opt out of the expensive and confusing
insurance offered by the rental car companies. If you rent cars often, this
can be a great benefit to have. For more information on primary versus secondary
insurance, check out our video on the topic. Number 6: Global Entry
reimbursement. The card reimburses the Global Entry application and renewal fee,
and can be used once every five years. Number 7: Additional redemption value
from Chase. If you use the Chase Travel Portal, you can redeem your Ultimate
Reward points at 1.5 cents instead of the usual 1.25
cents. For more information on how to do it, we did a video on determining when to
use the Chase Travel Portal. Okay, so that's all nice and good, but you might
be wondering how I stomach the $450 annual fee. Well for me, it doesn't quite
feel like $450 and here's why. Right off the bat, you're getting a $300
credit every year that gets automatically applied whenever there's a
qualifying expense. In my case, I usually notice my parking and ride-sharing
charges get credited on my account. Even if you don't travel that much, you might
still be able to use that $300 in your daily life since Chase has a fairly
broad definition of what qualifies as travel. That brings the annual fee down
to $150, which is $50 more than Sapphire Preferred. Now
assuming that you spend $420 a month on dining and another $420 on
travel, that would total around $10,000 on travel and dining
expenses a year. The only reason I'm using those numbers is because that's
how much I actually spent last year when I look at my travel and dining totals.
Some of it was for work, so I don't think I'll spend nearly as much this current
year, but it gives me a ballpark estimate how much value I'm getting from the
bonus categories. According to my spending last year, I came out on top with the
Sapphire Reserve, and if you add in the extra benefits that I got, such as lounge
membership and the Global Entry credit, then the value proposition is even higher.
In fact, I renewed my Global Entry earlier this year so that was another
$100 that I was able to extract from the card. So I'm confident that I
will have gained more value than the cost this year. I know a lot of people
have been disappointed with the Priority Pass lounges. While some of them have
been nice, we have been to our share of not-so-great ones too. But when I think
of the amount of money that I would have spent eating and drinking at the airport,
I tend to feel a bit more appreciative of the perk. We used our Priority Pass
lounge pass seven times last year. So suppose we had spend $15 on food and
drinks in the airport each time, we saved over $100 with our Priority Pass
membership. Again, these numbers are estimates and your situation may be
completely different for me. The Reserve card is worth keeping since we tend to
take advantage of the benefits. Fiona, on the other hand, also has a Sapphire
Reserve, but she's looking to downgrade before her next annual fee is up. While
she takes advantage of a lot of the perks, we think that we can probably get
away with having one Reserve card between us since we often travel
together. Fiona is a lot better about packing her lunch as well and not paying
for it every day, so she typically spends a lot less on dining out than me. For
those of you just starting out but anxious about the Reserve's annual fee,
which isn't even waived the first year, I honestly think you shouldn't hesitate to
give the Sapphire Preferred a try. The Preferred's
annual fee of $95 doesn't get charged until your second year, so it won't cost
you anything the first year. If you find that you want more, than you can always
upgrade to the Sapphire Reserve later. And if you already have the
Sapphire Reserve but are worried about the amount of value that you're going to
get in the following years, know that you can always downgrade to the Sapphire
Preferred before your annual fee is charged. One last thing to keep in mind
is that the Sapphire Reserve is a more difficult card to get an approval for
than the Sapphire Preferred. The Sapphire Reserve requires a minimum credit limit
of $10,000 which can be difficult when you're first starting out.
According to Credit Donkey, the average credit score to get an approval is 750,
which is fairly high. For more information on approval requirements for
Chase's Sapphire cards, check out Ask Sebby's video on it. He does a great
breakdown of what you need and should consider if you're applying for the
Reserve card. Do you have a Sapphire Reserve or Preferred card? If so, let me
know why you chose one over the other. I think it helps others to hear why people
chose certain cards and the reasoning behind it. If you're interested in
getting a new credit card and want to help support the channel, visit our
Card Offers page on our website. It's an easy way to help us out and get that
awesome new credit card. If you enjoyed this video and found it useful, please
give us a thumbs up and consider sharing our video with others who might benefit
from our content. Until next time, travel safe and travel smart.