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If you asked my opinion a few months ago, I would have said that the Chase Sapphire Preferred was the best rewards credit card in the game. But Chase recently launched the Chase Sapphire Reserve, which offers more benefits but at a higher cost.

The question now: which Chase Sapphire should you get?

Points Value

With both Chase Sapphire products, you earn Chase Ultimate Rewards points. However, the value of the points is different depending on which card you have. With the Chase Sapphire Preferred, points are worth 1.25 cents each. With the Chase Sapphire Reserve, the value of the points increases to 1.5 cents each, a 20% increase. If you earn 20,000 Chase Ultimate Rewards points, they would be worth $250 if you have the Chase Sapphire Preferred and those same points would be worth $300 if you have the Chase Sapphire Reserve.

Signup Bonus

A major difference between the two cards is the signup bonus. The sign-up bonus on the Preferred is 50,000 points when you hit the minimum spending requirement while the sign-up bonus on the Reserve is DOUBLE that. You get 100,000 Ultimate Rewards points and all of those points are worth more.

The value of the sign-up bonus on the Preferred is $625 but is a significantly higher $1,500 on the Reserve. That’s $875 of additional value from the Reserve, but remember – this is also a minimum. By utilizing Chase’s transfer partners, you can get even better value out of all those points, which would tilt the scales even further in favor of the Reserve.


With the Preferred, you earn double points on all travel and dining purchases. With the Reserve, you earn triple points on those same purchases, a 50% increase. And again, those points are also more valuable with the Chase Sapphire Reserve.

Let’s say you spend $10,000 per year on travel and dining.

Preferred: $10,000 spending = 20,000 points = $250

Reserve: $10,000 spending = 30,000 points = $450

This means that the effective rate is 2.5% of value on all travel and dining purchases with the Preferred and 4.5% with the Reserve. Getting 4.5% of value on all travel and dining purchases is pretty significant, especially since Chase uses a broad definition for these categories.

Interest Rate

Interest rates are based off your individual credit score and history, not the specific credit card. They don’t matter anyway because you pay your statement balance off in full every month.

You pay your statement balance off in full every month, right?


The cost is the primary factor that favors the Preferred. The annual fee for the Preferred is $95 and is waived for the first year. The Reserve has an annual fee that is going to sound very high. The fee is $450 and it is not waived the first year. However, you get a travel credit of $300 which is applied automatically to any travel purchases. If you spend $500 on travel the first month and nothing else, you would get hit with the $450 annual fee but also get reimbursed $300 so your total statement balance would be $650 for that month. This makes the net cost of the Reserve a much more affordable $150 per year.

The cost difference ends up being $55 per year, but that starts in Year 2. Since the Reserve’s annual fee is not waived the first year, the cost difference in Year 1 is $150.

We’re going to look at the value of the card in Year 1 versus subsequent years.

The Math

Let’s compare the cards in Year 1 under two scenarios: 10k and 20k in spending. Let’s assume all of the spending is for travel and dining purchases, so we’re not even using the cards for other purchases in this example.

 Preferred - 10kReserve - 10kPreferred - 20kReserve - 20k
Sign-Up Bonus$625$1,500$625$1,500
Annual Cost$0$150$0$150
Net Value$875$1,800$1,125$2,250

We can see that in Year 1 the value from the Chase Sapphire Reserve is significantly greater. With 10k in travel and dining spending, the Reserve provides $925 of additional value. When we bump that up to 20k in spending, the additional value grows to $1,125. It is basically doubling the value of the Chase Sapphire Preferred, which is already a fantastic credit card in its own right.

Now let’s compare the two cards for subsequent years where we do not get to take advantage of the sign-up bonus.

 Preferred - 10kReserve - 10kPreferred - 20kReserve - 20k
Sign-Up Bonus$0$0$0$0
Annual Cost$95$150$95$150
Net Value$155$300$405$750

Here you can see that even with the higher cost the Reserve continues to offer much better value. We can plot the net value equations of the two cards based on spending (travel and dining purchases only) to more easily see the relationship.


After Year 1, the break-even point between the two cards is $2,750. As long as you are spending more than that annually on travel and dining, you get higher value from the Reserve. Note that the break-even point between the two cards is actually at a negative net value, meaning you are not covering the cost of either card if you are only spending $2,750 on the card annually. Since the Reserve has the higher slope, it covers its cost faster than the Preferred. The Reserve needs $3,333 of travel and dining spending while the Preferred needs to $3,800 to cover its cost.

These spending minimums should be fairly easy for the average person to surpass. That breaks down to only $64 per week on travel and dining to cover the cost of the Reserve. This graph shows that if it’s worth getting either of the Chase Sapphire cards, the Reserve is always the superior option.

Extra Benefits

There are a couple additional benefits of the Chase Sapphire Reserve. It comes with a $100 application fee credit for Global Entry or TSA PreCheck as well as a complimentary Priority Pass select membership, which gives you access to over 900 VIP airport lounges worldwide. One drawback from the Chase Sapphire Reserve is that it costs $75 to add an authorized user while it is free with the Preferred. In fact, not only is it free to add an authorized user on the Preferred but you can also earn a 5,000 point bonus.

Preferred vs Reserve

Chase Sapphire Reserve clearly takes the crown. This article focused only on redeeming the points through Ultimate Rewards but there is potential for even greater value through Chase’s transfer partners. Ultimate Rewards points are valued at 2.1 cents each, which means the additional value from the Chase Sapphire Reserve grows even wider.

But what if you already have the Preferred? What do you do in that scenario? You have some options:

  1. Downgrade your credit card. After getting approved for the Reserve, you can downgrade the Preferred to one of Chase’s no annual fee cards: Chase Freedom or Chase Freedom Unlimited. Both of these cards complement the Sapphire and provide additional value. This also allows you to keep the credit history you’ve built up on the card.
  2. Switch from Preferred to Reserve. This should be your second option as the sign-up bonus is a significant part of the Reserve’s value, which you don’t earn if you simply switch cards. You might consider this option if you’ve opened 5 or more new credit cards in the past 24 months as Chase is likely to deny your application for the Reserve.
  3. Cancel your Preferred card. If you already have both no annual fee Freedom cards and want to earn the sign-up bonus on the Reserve, canceling the Preferred is your best option. No point holding on to a card you’re not using that costs $95 each year. Just be sure to wait until after you are approved for the Reserve to cancel.

Should You Ever Get the Chase Sapphire Preferred?

The Chase Sapphire Reserve offers superior value hands down. Depending on your situation, there are a few scenarios where you may still consider getting the Chase Sapphire Preferred.

  1. Reducing Cost. Your finances may be too tight at the moment to stomach the $150 net cost for the Reserve, especially if it may take you a couple months to recoup the $300 travel credit. That would be a $450 outlay at the beginning.
  2. Adding Authorized Users. You would like to add your spouse and 2 kids to the account. This would cost $75 each for the Reserve and $0 for the Preferred. You should do a cost/benefit analysis to see whether saving $75 is actually worth the loss in value.
  3. Accumulating Ultimate Rewards. You already have the Chase Sapphire Reserve and are looking to score a lump sum of Ultimate Rewards points. You can get the Preferred, earn the sign-up bonus, and cancel the card before the first annual fee is due at the start of Year 2.

Bottom Line

The Chase Sapphire Reserve should be at the top of your list of credit cards. It offers a huge sign-up bonus, powerful earning potential, and premium benefits. It surpasses the value offered by the Preferred in Year 1 and all subsequent years. You can take advantage of this great offer by applying for the Chase Sapphire Reserve today. The sign-up bonus alone is your free ticket to any destination in the world.

Featured Image courtesy of Jorg Schubert.

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