The Sapphire Reserve card turned 1 last week and people who applied for it last August will soon be facing a $450 annual fee.
It was reported last month that Chase is getting nervous about how much money they are losing on the Sapphire Reserve card and that they were looking for ways to cut costs.
Of course, if Chase cuts valuable benefits from the card, then people will just bail on it and the losses will become a self-fulfilling prophecy. There is a long payback period as Chase offered 100,000 points (worth at least $1,500 in travel) plus $300 in annual travel credits, so they need customers to keep their card for a long time in order to turn a profit. Some 10% to 40% of premium credit cards are cancelled annually, and if the Sapphire Reserve winds up on the higher end of that range, it will cost Chase a fortune.
AMEX quickly devalued their 50% points rebate on the Business Platinum card and will likely face many canceled cards when that benefit ends.
The last Sapphire cut only affected new cardholders as it switched the annual travel credit from a calendar year to a cardmember year. Existing cardholders were grandfathered into the calendar year credit, which was more costly for Chase as you could easily get $600 in travel credits during your first cardmembership year.
Chase has just announced a new policy, likely targeting those who were thinking of applying for a Sapphire Preferred card and closing their Sapphire Reserve card. Effective immediately, Chase is considering all Sapphire cards to be part of the same family. That includes the regular Sapphire, the Sapphire Preferred, and the Sapphire Reserve.
That means you can no longer receive the bonus on any Sapphire card if you have received a bonus on any Sapphire card within the past 24 months.
It also means you can’t get approved for any Sapphire card if you currently have one open.
Previously each Sapphire card flavor was considered its own product.
Chase may even enforce this by not allowing you to be approved for any Sapphire card if you’ve received a bonus on any Sapphire card in the past 24 months, but that’s not clear at this point.
The good news is that you can still make a product change between Freedom, Freedom Unlimited, Sapphire, Sapphire Preferred, and Sapphire Reserve cards. However you don’t earn any signup points for upgrades or downgrades.
So for example, if you have a Sapphire Preferred and it has been more than 24 months since you earned the bonus on it, you can downgrade that to a Freedom or Freedom Unlimited and then apply for and receive a bonus on a new Sapphire card. You’ll want to wait a couple days until the logo on your Chase.com account changes from Sapphire to a Freedom logo.
You can view credit card offers by hovering over the “Credit Cards” tab. You can then click on “Credit Cards From All Banks“ to find card offers via the logo of the bank you’re looking for.
The big question that has to be answered is will people keep their Sapphire Reserve card open?
The benefits are pretty strong. The annual $300 travel credit means that the effective annual fee is just $150 for most people as the travel categories are extremely broad.
In return you get:
- Free Global Entry/Pre-Check membership.
- 3 points per dollar on all dining and travel.
- Priority Pass lounge membership with unlimited free guests.
- Sapphire Reserve cardholders can redeem Chase points earned from any card at a value of 1.5 cents each towards airfare, car rentals, hotels, and activities.
- Roadside assistance
- Travel insurance, trip delay insurance, and much more
- Many more benefits as outlined in this post.
I’d say that’s a very good value for a $150 annual fee and plan on keeping my card open, but feel free to share your thoughts on the new rule and about whether you’ll keep your card open in the comments.