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Should you downgrade the Sapphire Reserve to Freedom Unlimited?

The Chase Sapphire Reserve and Freedom Unlimited are two very different credit cards, yet they have one thing in common: Both earn at least 1.5 Ultimate Rewards points per $1 spent. With the Reserve, this applies to its category bonuses while the Freedom Unlimited earns a flatmate of 1.5 points. There’s a lot of debate about whether the Sapphire Reserve is worth keeping long-term, with many holding onto it for the higher earning rate.

Some are wondering whether to downgrade the Sapphire Reserve to the Freedom Unlimited in Year 2. If you’re someone who doesn’t really care about travel benefits but rather the ability to earn lots of points and miles, here’s my take on how the Sapphire Reserve and Freedom Unlimited stack up against each other:

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Annual fee: Sapphire Reserve vs. Freedom Unlimited

The annual fee on the Sapphire Reserve is $450 in addition to $75 for each authorized user. Meanwhile, the Freedom Unlimited has no annual fee and adding an authorized user is free. When comparing the Sapphire Reserve vs. Sapphire Preferred, we determined that after deducting the $300 Sapphire Reserve travel credit, the annual fee would consequently be reduced to $150. This is a fair cost to compare against the Chase Freedom’s $0 annual fee.

Category bonuses: Sapphire Reserve vs. Freedom Unlimited

The Freedom Unlimited has no category bonuses, but rather earns just a flat 1.5% cash back on everything. This  can be converted to 1.5 Ultimate Rewards points per $1 spent if you have another Ultimate Rewards-earning credit card.

The Sapphire Reserve earns 3 points per $1 on travel and dining, plus 1 point per $1 on everything else. When redeemed through the Ultimate Rewards Travel Portal, these points are worth 50% more. Thus, you are essentially earning 4.5 points per $1 on travel and dining, and 1.5 points everywhere else.

The 1.5 points from the Freedom Unlimited card are worth just that, regardless of whether you’re transferring them to a travel partner or redeeming them through the Ultimate Rewards Travel Portal.

Actually, transferring them to the Sapphire Preferred or Ink Plus and then redeeming them at the Ultimate Rewards Travel Portal would get you an extra 20% in redemption value.

So how do you decide whether its better to keep the Sapphire Reserve or downgrade to the Freedom Unlimited? Simply compare the difference in annual fee and whether the category bonuses exceed the annual fee in value. You would have to spend at least $3,333 – 5,0000 on travel or dining to earn enough points to off-set the $150 annual fee on the Sapphire Reserve.

Should you downgrade from the Sapphire Reserve to Freedom Unlimited?

So should you downgrade from the Sapphire Reserve to Freedom Unlimited? It really depends on whether you’ll make use of the many travel benefits offered by the Sapphire Reserve. Some might find that the $100 Global Entry or TSA PreCheck application fee credit every four years makes it worthwhile to keep the Sapphire Reserve past the first year. Or perhaps the annual Priority Pass Select membership is important to you.

Both of these features could further cut down on the extra $150 you’d have pay for the Sapphire Reserve. Assuming you actually use them.

If you’re just looking to earn a flat 1.5 points per $1 spent without category bonuses, then it makes sense to downgrade to the Freedom Unlimited and save $150. With the Freedom Unlimited, your 1.5 points are worth that much regardless of whether you redeem them through the Ultimate Rewards Travel Portal or transfer them to a travel partner.

Just keep in mind that you do need another Ultimate Rewards-earning credit card to be able to convert the cash back to points.

Are you considering downgrading from the Sapphire Reserve to the Freedom Unlimited card? Which factors are you taking into consideration to make your decision?

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14 responses to “Should you downgrade the Sapphire Reserve to Freedom Unlimited?”

  1. Anonymous Avatar
    Anonymous

    Nah…Upgrade that mo fo! 😉

    1. Ariana Arghandewal Avatar

      There’s merit to that too…except you’ll miss out on the sign-up bonus.

  2. Daniel Avatar
    Daniel

    But because the Reserve gives a 50% boost on everything else, it’s totally worth it to keep. That makes the Chase Freedom category bonuses earn 7.5%.

    1. Ariana Arghandewal Avatar

      Or you can combine Freedom Unlimited with Ink and still get an extra 25% bonus on Ultimate Rewards redemptions. Though the annual fee difference isn’t that great, so sticking to Reserve/Freedom ULT might be the way to go.

  3. scott daniels Avatar
    scott daniels

    Consider the difference in the points values when booking travel on Chase Travel Center. ExAMPLE: book a hotel costing $200/nite for 3 nites; using CSR, at 1.5 ct/pt, you would require 40,000 pts ($600/.015); compare that to using FU, which at 1.25 ct/pt would require 48,000 pts for the stay. That 8,000 pt difference (48,000 – 40,000) at 1.25 ct/pt is worth $100, That’s ballpark the $150 net Annual Fee of XSR. Add in the 3X for travel and it’s starting to look like CSR is not so much more expensive than FU.

    1. Ariana Arghandewal Avatar

      Good analysis. That’s assuming you redeem that many points per year. I easily do, but people who don’t ms regularly might have a hard time earning that many points.

  4. Woody M Collins Avatar

    Does the CFU waive foreign transaction fees? How about unexpected travel delays, baggage delays, etc?

    1. Ariana Arghandewal Avatar

      That’s a good point to bring up because Freedom Unlimited does impose a 3% foreign transaction fee. It includes Purchase Protection, Price Protection, Auto Rental Collision Damage Waiver but I couldn’t find anything regarding travel and baggage delays.

  5. LK Avatar
    LK

    Primary rental car insurance on the Sapphire Preferred and Reserve. Insurance on Freedoms is Secondary, I think. That makes Sapphire worth keeping if you don’t have another card with Primary for car rentals.

  6. barschools Avatar
    barschools

    I think you have to hold a card one year before you can downgrade. Is it possible to downgrade the Reserve before the $450 annual fee hits?

  7. OneOfDaKine Avatar
    OneOfDaKine

    I’m so confused with the $300 travel credit. Don’t you still pay $450 AF? You still gotta save the $300 that you supposedly spent on travel and cough up the extra $150 to pay the $450 AF. Don’t get me wrong, the $300 travel credit is great but I’m still confused on why everyone thinks it’s $150 AF after the $300 travel credit.

    1. Ariana Arghandewal Avatar

      Because $300 of that $450 annual fee can be channeled towards travel expenses. Aside from that, you can also get a ton of value out of higher redemption rate at the Ultimate Rewards Travel Portal.

    2. scott daniels Avatar

      > why everyone thinks it’s $150 AF after the
      >> $300 travel credit?
      B/c if you’re going to spend the $300 anyway, it’s like found money. Last year, I rented a car for a week just days after I got the CSR card. Zip-zap, automatically got the $300 Travel credit with no extra work. I do travel enough so I can safely depend I’ll qualify for whatever travel credit any time I of the year. If it took any planning at all, it wouldn’t be such a deal for me.

      1. Ariana Arghandewal Avatar

        Because you’re really just paying $150 out of pocket, assuming you had planned on spending $300 on travel regardless.

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