After a summer of rumours and social media hype, Chase’s new premium travel card, Chase Sapphire Reserve has made its debut. Some of the rumblings we heard at Breaking News Business sounded too good to be true, so we decided to put the card to the test.
Within the thriving online subculture of credit-card churning, obsessed with maximizing reward programs, expectations were high. The newly released Chase Sapphire Reserve card, more than meets those expectations. Despite its hefty $450 USD annual fee, so many people have signed up amid the online frenzy that the bank ran out of the actual cards within two days.
“Chase approved ‘tens of thousands of applications’ in the first two days”, said spokeswoman Lauren Francis; and the majority of cards are going to millennials. The bank didn’t have enough of the special cards, made from a proprietary mix of embedded metals, to meet the demand, so for the time being, we are sending out regular plastic versions.
As the name implies, the new card is an enhanced version of the popular Chase Sapphire Preferred® Card. Everything about this card is a step up. There is a higher sign-up bonus of 100,000 points, more valuable redemption options where cardholders earn 3x points on all travel and dining purchases and it also comes with an annual $300 USD travel credit.
To qualify, cardholders must spend at least $4,000 USD on purchases within the first 3 months of account opening. Surprisingly, the majority of consumers signing up are millennials who usually reject credit cards and are least likely to be a target for a high annual fee, ultra-platinum category credit card. Those cards are normally associated with luxury travellers that travel extensively and this market has been dominated until now by American Express with its Platinum Card.
Is the Chase Sapphire Reserve℠ worth it?
The $300 USD credit for travel expenses paid with the card effectively reduces the high annual fee by two-thirds. You earn 3 points per dollar on travel and dining, and you can redeem points for 1.5 cents apiece through Chase Ultimate Rewards®. That means you need to spend about $3,333 USD on travel and dining per year to wipe out the rest of that annual fee. That’s a figure that should be easy for frequent travellers to hit — especially if they eat a lot of restaurant meals while they’re travelling.
Most other credit cards that try to serve two functions end up being average. They fall into the ‘jack of all trades, master of none’ category. The Chase Sapphire Reserve℠ is an exception, in that it excels as both a luxury card and as a premium rewards credit card.