Annual Fee Math and Sapphire Reserve Alternatives
By now you’ve probably heard Chase hiked the annual fee on the CSR from $450 to $550, effective April 1st for existing cardholders. Since the card is fairly popular among you, I’ll discuss the accounting behind owning the card, and if you decide to cancel the card, I’ll highlight top alternatives.
I think of annual fees in terms of “effective annual fees”. This is the annual fee net of travel credits and reimbursements. The CSR provides $300 travel credit, $60 Doordash credit + Dashpass subscription, and Lyft Pink status. Depending on your usage of those credits, the new effective annual fee is:
- Travel Credit Only: $550 – $300 = $250
- Travel Credit + Doordash User: $550 – $300 – $60 = $190
- Travel Credit + Doordash User + Lyft User: $550 – $300 – $60 – 0.15x = ??, where x is the amount of $ you spend on Lyft per year. Lyft Pink gives users 15% off each ride, so if you use $100 of Lyft per year, your CSR saved you $15. Plug in your usage and see how much Lyft status means for you.
Personally, I’m keeping my CSR for at least another year as my annual fee is due in March, so I’ll be grandfathered in for another year at $450. With all the new benefits and the existing ability to redeem Ultimate Rewards points at 1.5cpp via the Portal, I’m still net positive on the fee.
If you decide to cancel your card, my best advice would be to:
- Call Chase and explain your desire to cancel the card. Cite better competitor offers and benefits like the Amex Plat. If you’re lucky, Chase will provide a retention offer, e.g. 20k points after $1k spend, which could help with the annual fee math above and allow you to keep the card for another year.
- If Chase doesn’t budge, downgrade to a no annual fee Chase card like the Chase Freedom or Chase Freedom Unlimited. This allows you to keep the account open, which is beneficial for your credit score as your average age of accounts will continue to increase. You can continue to accrue points in the Chase ecosystem and transfer back to Ultimate Rewards later.
When you do decide to downgrade, here are alternatives to the CSR based on the various benefits of the card.
If you liked earning 3x on food and travel and the $300 annual travel credit
- Amex Gold: 4x restaurants, 3x flights booked directly with airline, $100 travel credit
- Citi Prestige: 5x restaurants, 5x flights, 3x hotels, $250 travel credit
- Wells Fargo Propel: 3x restaurants, 3x travel
- Amex Green: 3x restaurants, 3x travel, $100 Away credit
If you liked the Lyft status or the Doordash Credit
- Amex Plat: $200 Uber credit, Uber VIP status
- Amex Gold: $120 in annual credit at Grubhub, Seamless, The Cheesecake Factory, Ruth’s Chris Steak House, Boxed, and participating Shake Shack locations
If you liked the Priority Pass Lounge Access
- Amex Plat: Centurion Lounge access, Priority Pass access
- Hilton Aspire Amex, Marriott Bonvoy Brilliant, Hilton Surpass, U.S. Bank Reserve, Citi Prestige Card: Priority Pass Select access
If you liked the ability to transfer to Airline/Hotel Partners or Using the Portal
- Chase Ink Preferred, Chase Sapphire Preferred: Redeem in the Portal at 1.25cpp, but retain ability to transfer to the same airline/hotel partners
If you liked flexing a Metal Card 💪
- Amex Plat, US Bank Reserve, Citi Prestige
Make sure you’re doing the annual fee math on any new card you open. While fees seem steep on the surface, it’s easy to generate net profits on multiple cards per year if your math is right.