Chase Is Slashing the Sapphire Reserve Signup Bonus. Is the Card Still Worth it?

Chase just announced they're slashing the big sign-on bonus for their Chase Sapphire Reserve credit card. So, is it still worth signing up?

The Chase Sapphire Reserve credit card made a big splash when it was introduced in August 2016. The card launched with a number of enticing travel rewards, and Chase was initially so swamped with applications, it literally ran out of the physical cards.

One chief catalyst for the initial demand was the card’s mega-signup bonus. Chase offered new Sapphire Reserve cardholders 100,000 bonus points when they spent $4,000 in the first three months — a $1,500 value when those points are redeemed for travel through Chase Ultimate Rewards.

But that signup bonus is about to get less lucrative by half: Chase is slashing it to 50,000 points when you spend $4,000 in your first three months as a cardholder. Per the bank’s website, applicants have until January 11 to apply online for the card with the existing bonus. They have until March 12 if you apply at a branch, according to a report in The New York Times.

So with this drastic reduction in bonus points, is it still worth applying for the card post-January 11? Well, that depends …

Should I Apply for the Chase Sapphire Reserve?

First up, you should find out if you’d even qualify for the credit card. Most of the lucrative travel credit cards on the market require good or excellent credit to qualify. (You can see where your credit currently stands by viewing two of your credit scores for free, updated every 14 days, on Credit.com.)

Beyond that, you need to think about the cost of having this card. The annual fee for the Chase Sapphire Reserve card is $450, with another $75 added for every additional user, which is pretty substantial. So, you’ll have to consider if this is something your wallet can handle paying on a yearly basis.

And, just like any other card, you need to consider your habits. Are you someone who routinely carries a balance or do you typically pay your card off when the statement arrives? Either way, you’ll want to take note of the interest you’ll be paying if you don’t pay your balance in full. The annual percentage rate (APR) for the Chase Sapphire Reserve credit card is a variable 16.24% to 23.24%.

With these things in mind, there has to be some big rewards if Chase continues to expect new customers …

The Perks of the Sapphire Reserve 

… and, in many respects, there still are. As we mentioned, Chase is cutting the signup bonus in half (to 50,000 points instead of 100,000). While that sounds pretty drastic, those 50,000 points still have a $750 value when redeemed for travel through Chase Ultimate Rewards (using Chase Ultimate Rewards nets you an additional 50% value with the Sapphire Reserve).

The card earns three points for every dollar spent on travel and restaurants worldwide and one point per dollar spent on all other qualifying purchases.

Cardholders will still receive up to $300 in annual travel credits and a $100 reimbursement for a Global Entry or TSA Pre✓ application. The card also gets you access to more than 900 airport lounges as well as special privileges at participating luxury hotels and car rental agencies. The card comes with a number of travel protection policies and programs as well.

Is Chase Sapphire Reserve Still a Good Value?

The great travel features are probably most valuable to frequent jetsetters who will actually use the annual credits, airport lounges and other travel benefits. Those customers will see more long-term value in the card, and, for them, the signup bonus may just be icing on the cake.

If you’re an occasional traveller who won’t frequently use these features, this card might not get you much return on that $450 investment. In other words, if you’re still starry-eyed over the signup bonus after it’s cut in half, you may want to slow down and consider other cards.

Comparing the Sapphire Reserve to Other Travel Cards With Signup Bonuses

The Sapphire Reserve isn’t the only travel credit card that touts a signup bonus. And, if that $450 annual fee is now looking way too steep, given your travel habits, there are some more affordable alternatives. (Note: See card agreements for full details.)

Chase Sapphire Preferred 

The Chase Sapphire Preferred (read a full review here) is the bank’s more affordable travel rewards option. The 50,000-point signup bonus, which you can get after spending $4,000 on purchases in the first three months, holds a value of $625 when redeemed through Chase Ultimate Rewards (going through Chase Ultimate Rewards nets you an additional 25% value with the Sapphire Preferred).

This card offers two points per dollar spent on travel and restaurants, and one point per dollar spent elsewhere. Cardholders won’t get access to airport lounges or special benefits at luxury hotels, but they’ll pay much less for the privilege of ownership and still receive certain travel protections.

Annual Fee: $95 (waived the first year)

APR: Variable 16.24% to 23.24%

Venture From Capital One

The Venture Rewards credit card from Capital One (see full review here) earns an unlimited two miles for every dollar spent on all qualifying purchases, with 100 miles equaling $1 in travel rewards. As a signup bonus, Capital One offers 40,000 miles, equal to $400 in travel, after new cardholders spend $3,000 on purchases within the first three months of having the card.

Annual Fee: $59 (waived the first year)

APR: Variable 13.49% to 23.49%

At publishing time, the Venture credit card from Capital One is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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Chase Sapphire Preferred vs. Chase Sapphire Reserve

Here's how to decide whether to get the Chase Sapphire Preferred or Chase Sapphire Reserve credit card.

[Disclosure: Cards from our partners are mentioned below.]

In past years, the Chase Sapphire Preferred card has been the go-to premium travel credit card. The card comes with a generous sign-up bonus and extra points on travel and restaurant purchases—all for a very reasonable annual fee of $95, which is waived the first year. Then Chase released the Chase Sapphire Reserve, one of the most talked-about credit cards of 2016 because of its pricey $450 annual fee and generous benefits. The Sapphire Reserve was so popular, Chase temporarily ran out of the metal versions of the card shortly after its August 2016 debut.

While the Chase Sapphire Preferred and Chase Sapphire Reserve credit cards offer a lot of the same benefits, including certain trip cancellation and interruption insurance and baggage delay insurance, there are some major differences between the two. In this article, we’ll walk you through each card to help you decide which might be the better choice for your needs.

The Annual Fee

What really sets these two cards apart is their annual fees. The Sapphire Preferred fee is $95, which is waived for the first year, and the Sapphire Reserve fee is $450, which is not waived at any time.

If these fees are still too high for your tastes, peruse the several cards without annual fees, such as the Discover it Miles and the Capital One VentureOne Rewards cards.  

Points

With the Sapphire Preferred card, you earn two points per dollar spent on travel and at restaurants. Any other purchases will earn one point per dollar spent. For cash and gift card redemptions, 100 points are worth $1, but for travel redemptions, 100 points are worth $1.25.

With the Reserve card, you get even more—you earn three points per dollar both on travel and at restaurants. All other purchases will earn one point for every dollar you spend. And like the Sapphire Preferred card, 100 reward points will get you $1 in cash and gift cards. However, you receive $1.50 for every 100 points of travel redemptions.

Sign-Up Bonuses

With the Chase Sapphire Preferred card, you’ll earn 50,000 Chase rewards points after spending $4,000 within the first three months. To put that in perspective, 50,000 points are equivalent to $625 in travel rewards for Chase Sapphire Preferred.

Currently, the Sapphire Reserve card has the same sign-up bonus. But with the greater value in travel redemptions, those 50,000 points convert to $750 in travel rewards. When the Sapphire Reserve card was introduced last year, cardholders were given 100,000 points if they spent $4,000 or more in the first three months. All those points are equal to $1,500 in travel rewards—a huge reason why the card got so much attention last year.

Redeeming Your Points

Whether you have the Chase Sapphire Preferred or the Chase Sapphire Reserve, you can transfer the points you earn to one of the bank’s many airline and hotel transfer partners. These partners include Hyatt, Southwest Airlines, United Airlines, and more.

You can also use your points directly for travel through the Ultimate Rewards platform.

Why Choose Chase Sapphire Preferred?

It’s all about that annual fee—especially since both cards carry the same variable 16.99% to 23.99% annual percentage rate (APR). Plus, if you don’t plan on using a lot of the benefits on the Sapphire Reserve or don’t do much traveling, it makes more sense to pay the Preferred’s more practical $95 annual fee.

Also, if you plan to add an authorized user to your Chase Sapphire Preferred account, you can earn a 5,000-point bonus. You just need to add the user and make a purchase within three months after you opened the account. To simply catch up to this bonus on the Chase Sapphire Reserve card, you would need to spend $5,000. The Sapphire Reserve card also has a $75 annual fee tacked on for each authorized user while the Sapphire Preferred card does not have a fee at all.

Why Choose Chase Sapphire Reserve?

Many choose the Sapphire Reserve card over the Sapphire Preferred card because there is more value per point, for both earning points and spending them. Despite the high annual fee, the math can work out to your advantage, especially if you can use the card’s following ancillary benefits:

  • $300 annual travel credit: For all valid purchases on travel, you can receive a statement credit of up to $300 per calendar year. Chase’s definition of travel covers quite a bit, so many expenses, including airfare and hotels, would be eligible.
  • $100 statement credit for Global Entry or TSA Pre-Check: You can also receive a statement credit of $100 to cover the cost of Global Entry or TSA Pre-Check, which help you bypass long lines at the airport.
  • Access to airport lounges: With the Chase Sapphire Reserve card, you will gain entry to over 1,000 airport lounges worldwide when you enroll in the complimentary Priority Pass™Select program—a big benefit if you spend a lot of time in airports.
  • More value per point: When you reserve travel through the Ultimate Rewards Program, your points are worth 50% more compared to 25% more with the Preferred card.
  • Special benefits: When you choose to stay at properties within the Luxury Hotel & Resort Collection, you’ll be eligible for benefits like early check-in and late checkout, complimentary room upgrades, and daily breakfast for two. You’ll also qualify for benefits from National Car Rental, Avis, and Silvercar.

Hopefully, you’ve found this information helpful in your search for the best travel rewards credit card. If you are interested in one of these cards, or any credit card for that matter, remember to check the credit requirements before you apply. Credit card applications could ding your credit, so make sure you have a good chance of qualifying with your current credit score before you apply.

See what your credit score is for free at Credit.com, or get your credit report card at no cost to you.

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How Many Credit Cards Is Too Many?

multiplecreditcards

With so many tempting credit card offers out there — we’re looking at you, Chase Sapphire Reserve — who wouldn’t want to take advantage of them and sign up? But some consumers may have reason to wonder if filling out all of those credit card applications may add up to something more concerning: a bad credit score. Is there ever such a thing as too many cards?

To find out, we turned to Rod Griffin, director of education for Experian, one of the three major credit reporting agencies. Here’s what he told us.

“It’s not the number of credit cards you have, it’s how you use the cards that you have,” he said via email. “You only need one or two credit cards to have good credit scores. Just what constitutes ‘too many’ depends on the person and their unique credit history.”

It’s important to know that credit scores today put a big emphasis on utilization, or how much credit you use weighed against how much is actually made available to you. This accounts for 30 to 35% of a consumer’s credit score, Griffin said, so “the number of credit cards you carry is less important than the balances you carry on the cards in your wallet.” (You can see where your own credit stands by viewing your free credit report summary, updated every 14 days, for free on Credit.com.)

The Risk of Hard Inquiries 

With these factors in mind, it’s probably not a good idea to apply for a lot of credit cards all at once since multiple inquiries can raise a red flag to lenders, Griffin said. “The underlying questions a lender may have are, ‘Why is the person suddenly applying for a lot of potential new debt? Are they going to charge more than they can afford and not be able to repay the debt?’ ”

Yet the risk associated with applying for multiple cards does vary by your credit standing. If your credit history is already in poor shape, “applying for just two or three cards in a short time might be ‘too many,’ ” Griffin warned. Conversely, a person with a good credit history may not feel much of a burn from submitting two or three credit card applications.

Remember to Swipe Wisely 

Whether you’re using an old credit card or a shiny new one, you’ll want to do your best to use it smartly. That means working to pay your balances off on time, and in full, every month, to help you maintain a low utilization rate, Griffin said. Likewise, avoid carrying a balance near the credit limit on even one card as this can “seriously impact credit scores,” he added. “If you have 10 credit cards, use them to make small purchases, and then pay the balances in full each month. You will have a low utilization rate, which will benefit scores.”

He added, “the right question isn’t really about how many cards is ‘too many.’ The right question is, ‘How do you use the cards you have available to you?'”

At publishing time, Chase credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: AndreyPopov

The post How Many Credit Cards Is Too Many? appeared first on Credit.com.