I Love My Credit Card and So Can You

In 2016, Chase announced its new credit card, Chase Sapphire Reserve. At the time, it offered a 100,000 bonus points (worth $1,500 in travel or $1,000 in cash back) after spending $4,000 in first 3 months.

Get the Chase Sapphire Reserve now and earn 50,000 bonus points!

Here were the benefits:

  1. $300 Annual Travel Credit
  2. Auto Rental Collision Damage Waiver
  3. Complimentary Airport Lounge Access
  4. Baggage Delay Insurance
  5. Global Entry or TSA Pre✔® Fee Credit ($100 every 4 years)

    Photo by Chase Bank
  6. Trip Delay Reimbursement
  7. Special Car Rental Privileges
  8. Roadside Assistance
  9. 50% More Value in Travel Rewards (points were worth 1.5x when use for traveling)
  10. Lost Luggage Reimbursement
  11. VIP Access to Events & Experiences
  12. Travel and Emergency Assistance
  13. 1:1 Point Transfer
  14. Travel Accident Insurance
  15. The Luxury Hotel & Resort CollectionSM
  16. Emergency Evacuation & Transportation
  17. No Foreign Transaction Fees
  18. Emergency Medical and Dental Benefit
  19. Elite Hotel Benefits at Relais & Châteaux
  20. 3X Points on Travel and Dining Worldwide
  21. Trip Cancellation / Trip Interruption Insurance up to $10K

Wow, what a list!

The caveat:

$450 annual fee.

Despite the annual fee and no marketing by Chase, the credit card applications came flooding in to the point that it cut the bank’s profit by $300 million and they slashed the bonus to 50,000 points (or $750 in travel or $500 in cash back) in January of 2017 even though it was only released 5 months prior. My husband and I applied for the credit card before the bonus was slashed, but we applied at different times so we didn’t have fork up $8,000 in 3 months, plus the upfront annual fee Chase hits with you with immediately.

After meeting the year minimum requirement, we decided to cancel one of the cards. We were able to keep the rewards as long as the person canceling still had a Chase credit card account, in which my husband did. So, we transferred all his points to my Chase Reserve and now have a few thousand dollars in points.

Why we are still willing to pay the $450 annual fee?

So, if we could have canceled, keep the rewards, and use other cards that didn’t have annual fee, then why bother to keep this card?

The value of this card comes from the bolded items above that satisfies a lot of our needs since we do travel a lot. We take at least 1 international trip a year, go on multiple domestic trips throughout the year, AND our expenses exceed the technical $150 annual fee. One of the perks of this card is a $300 travel reimbursement, which technically brings the annual fee down to $150. As long as you travel at least $300 worth (i.e. Uber, hotels, toll, Lyft, Airbnb, flight, train, and etc…), then your annual purchase rewards need to exceed $150.

The Points Guy’s analysis on the Chase Reverse vs. Chase Preferred is outlined very clearly down to the penny of how much you have to spend annually. His analysis shows that if you spend at least $3,333.33 a year (or $277.78/month) on dining and travel, you’re set to break even on the $150.

How do we do that?

We strategize how we use credit cards and make the most of our points.

What in our wallet?

We both have other credit cards that don’t carry an annual fee, but we have them for different reasons. I only have 3 credit cards where 1 is the Chase Reserve. There is one that I never use or carry around. It sits in the safety deposit for credit score reasons (length of history). Then the second card is another Chase card with no annual fees and I keep this for personal purchases. My husband has roughly the same except he no longer has the Chase Reserve. Anytime he buys things, it’s on a Chase card with no annual fees.

Basically, we use our Chase Reserve for absolutely everything else. If they take card, we pull the Chase Reserve; otherwise, it’s cash. The only times we don’t use this card is when my husband and I aren’t in the same place and he has to use his own card, but we will transfer all his points to our Chase Reserve rewards. Other than that, we essentially have 1 credit card that we make every single purchase possible and it’s on the Chase Reserve.

What did I earn in 2017?

Dining and travel is 3x the points and everything else is 1 for 1. So for every $1 we spend on Uber, going out to dinner, or traveling, we get 3 points. Then, I always redeem our points on traveling, which turns into 4.5 points. Remember, this is just my card. My husband also had the card as well, which means we actually earned more than $589 in travel redemption shown below.

Of course, ALWAYS pay your credit card in full and avoid having to pay any interest

Otherwise, what’s the point of having a credit card?

Bottom Line: Dedicate all your expense to 1 credit card with the best rewards that fit your lifestyle/needs no matter the annual fee, because all the mandatory and discretionary spending benefits will add up to outweigh the cost of the annual fee. If you travel a lot, pick the card that fits your travel needs the most. If you shop a lot, pick the card that provides the most cash back. The important thing is that you and/or significant other use 1 card to make all purchases on and use other ones sparingly to make the most of your rewards. Lastly, ALWAYS PAY YOUR CARD IN FULL AND NEVER PAY INTEREST.

Get the Chase Reserve and earn 50,000 bonus points here.

 

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