Well, that came out of left field. Chase just announced an annual fee increase for the Chase Sapphire Reserve, to the tune of $100. Starting January 12, the annual fee on the card will be a whopping $550. To soften the blow, Chase is also introducing a $120 DoorDash credit.
So is it time to drop the Sapphire Reserve? Let’s take a look at this card’s features, recent improvements and how they stack up against the $550 annual fee:
DoorDash DashPass for Chase cardholders
This news comes a day after Chase announced a new DoorDash partnership that would grant complimentary DashPass membership to select Chase cardholders. DashPass is a subscription service that normally costs $9.99 per month and entitles members to free delivery over $12 at participating restaurants.
DoorDash delivery fees typically range from $0.99 – $5.99, depending on the restaurant and delivery area. If you’re currently paying for a DashPass subscription and don’t have another qualifying Chase card with a lower annual fee, then the $100 Sapphire Reserve fee hike might not sting as much.
Sapphire Reserve $120 DoorDash credit
The $100 annual fee increase on the Sapphire Reserve is less than the $120 DoorDash credit. But is it actually worth it? That depends on whether you normally spend $120 a year on DoorDash.
If you’d asked me six months ago, the answer would have been “absolutely.” I ordered from DoorDash at least twice a week at work. Nowadays? Not so much. So don’t think of this $120 DoorDash credit as “free” or offsetting the $100 annual fee hike in any way. Unless you actually spend $120 a year with DoorDash to begin with, you’re not really offsetting anything.
It’s important to note that the $120 Sapphire Reserve DoorDash credit is dispersed in $60 increments over two years: $60 through 2020 and another $60 through 2021. So if you’re new to points and are thinking of applying for this card and downgrading after the first year, keep in mind that you may miss out on the second half of that $120 DoorDash credit.
Sapphire Reserve’s Lyft benefits
Through March 2020, Sapphire Reserve cardholders earn 10 points per $1 spent on Lyft rides. Sapphire Preferred cardholders earn 5 points per $1. Depending on how frequently you’re using Lyft, these extra rewards can be significant or not worth considering.
When are the changes going into effect?
The $120 DoorDash credit and $100 annual fee increase is going into effect on January 12, 2020. So if you’re thinking of applying for a Sapphire Reserve, you might want to do it now to avoid a $100 fee hike – especially if you have no use for the DoorDash credit.
If your Sapphire Reserve renews on or after April 1, 2020, you’ll be hit with a higher annual fee. If your renewal is before April 1, you’ll still only pay $450 this year.
Should you renew your Sapphire Reserve card?
For many years, people have justified paying the $450 annual fee on the Sapphire Reserve because of the $300 travel credit and 50% bonus on Ultimate Rewards Travel redemptions. The argument was that you were really only paying $55 more vs. the Sapphire Preferred. With the 50% redemption bonus, the Sapphire Reserve was a no-brainer.
Those features remain the same, but the introduction of the $120 DoorDash credit complicates things. If you are in fact spending at least $100 a year with DoorDash, then the annual fee increase isn’t really changing anything for you.
You’ll probably continue to get value out of the card if you keep utilizing the 50% redemption bonus. Not to mention the 3x bonus on travel and dining.
But if dining isn’t a big spending category and you don’t use DoorDash much, then it might be time to downgrade to a Sapphire Preferred. Calculate your annual dining and travel spending, as well as your Ultimate Rewards Travel redemptions.
If the Sapphire Reserve isn’t earning or saving you enough points to justify the $100 fee increase, it might be time to downgrade. Maybe even switch over to the Amex Green Card, which has a $150 annual fee and also offers 3X points on dining.
What are your thoughts on the Sapphire Reserve changes? Do you plan on keeping your card now that the annual fee is increasing to $550?
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