This was the email that I sent to my Sapphire Reserve/Freedom Unlimited clients……
Sorry long email!!
You are getting this email because you and/or your spouse have the combo of a Chase Sapphire RESERVE and a Chase Freedom UNLIMITED card.
Before I start with the details, I am letting everyone know that I am going with the assumption that we will be traveling again! (Hopefully sooner than later).
As I emailed the other day, your Freedom Unlimited got a big makeover and I would suggest you should now use your cards as follows:
Dining-Freedom Unlimited at 3x per $1 OR Sapphire Reserve at 3x per $1 (unless you are someone who uses an Amex Gold for dining-then keep using that).
Drugstores-Freedom Unlimited at 3x per $1
All of the “other stuff” you were using your Freedom Unlimited for before-keep using it at 1.5x points per $1.
TRAVEL NOT THRU THE CHASE SITE-Sapphire Reserve at 3x per $1.
It gets tricky with travel that you will book thru the Chase site…
If you are purchasing travel through the Chase site, you can use the Freedom Unlimited at the new rate of 5x per $1. BUT NOTE, you are giving up better travel insurance that you get with your Sapphire Reserve (at 3x points per $1), so decide if that extra 2 points is worth it.
For example, the Freedom Unlimited could be ok to use to book a hotel through the Chase site. However, for flights where there could be delays, cancelations, etc, or rental cars where there could be issues too, maybe stick with the Reserve.
But should you keep your Sapphire Reserve?
As promised in my prior email, I am going to analyze whether I think it is still worth it to keep your expensive Sapphire Reserve.
One reason I would consider keeping it is for the travel insurance mentioned above. The insurance is much better when you use your Reserve to book travel than when you use your Freedom Unlimited.
The second reason is because as we all know (hopefully), having the Sapphire Reserve gives us the ability to convert our cash back that we earn with the Freedom Unlimited into Chase points.
As cash back points, they can only be redeemed at 1 cents per point (for anything).
But as Chase Ultimate Rewards points, they can be redeemed thru Chase Travel at 1.5 cents per point AND they can also be transferred to Chase airline and hotel partners at 1:1.
It is the second reason that drives my advice to keep a Sapphire. However, having a $95 Sapphire Preferred would also allow you to convert your cash back to Chase points. (Sapphire Preferred earns 2x points on travel and dining and you redeem at 1.25 cents per point and yes you can also transfer to partners at 1:1).
So going with the assumption that you need some sort of Sapphire, I am going to try to put some numbers to this to try to justify keeping the Sapphire Reserve.
1. Your annual fee is $550 (although if your renewal fee has been billed since April or is due to be billed by the end of the year, you should be getting $100 credit).
2. Each cardmember year you get $300 travel credit (don’t forget, you can use this $300 at supermarkets and grocery stores thru the end of the year).
3. So let’s make your fee $250.
4. Remember, with the Sapphire RESERVE-we redeem at 1.5 cents per point and with the Sapphire PREFERRED we redeem at 1.25 cents per point. So how much would we need to redeem to make up that $250 difference?
5. Answer-if we redeem at least 100,000 points a year thru the Chase travel site we break even. Redeeming 100,000 points at 1.5 cents is $1500 in value and Redeeming them at 1.25 cents is $1250 in value.
So if you normally redeem at least 100k thru Chase for travel, then I would keep the Reserve.
Also note that I didn’t take into consideration the $100 statement credit noted above nor the $60 Door Dash credit that you will receive in 2021. Taking those items into account too would also knock down the amount you would need to redeem to break even at least for 2021.
BUT-if you are someone who does not take advantage of the 1.5 cents redemption rate and usually transfers their points to partners (Hyatt, Bonvoy, United, etc) then I would recommend that you downgrade your card to the Sapphire Preferred.
Also a heads up…they increased the bonus today for the Sapphire PREFERRED to the highest offer ever-80,000 points after a $4k spend in 3 months. This may have some of you thinking why not apply for the Preferred and subsequently cancel my Reserve. Know that Chase only allows you to have one Sapphire version card at a time. So since you already have the Reserve, you won’t be eligible to apply for a Sapphire Preferred card. Also, I would never advise canceling your Reserve and then applying for the Preferred especially since you have to wait 48 months after earning the sign-up bonus on one Chase Sapphire card before you can earn it again on another. So you better be sure you are beyond that limit if you would even think about doing this. Downgrade is the best way for you to get the Preferred, but unfortunately forgoing the lucrative bonus.
But on that note! If you are a couple and your partner does not have a Sapphire, consider them applying for the Preferred. The 80,000 point bonus is worth $1200 in travel when dropped into the Sapphire Reserve bucket-all for just $95. (Remember-spouses can combine points). After the first year, the Preferred holder can consider downgrading to a no-fee card. (Shh I didn’t say that :-). ).
Also, one more thing. If you are someone whose partner has an additional Reserve card at $75, I think that you should cancel the additional card. After all, they can use their Freedom Unlimited on dining at the same 3x per $1 rate.
I know it is a lot and I am happy to speak to anyone in more detail about how this changes or doesn’t change the spending and card inventory in your current plans.
Just reach out to me!
Stay well
Cindy