Large Purchase / Chase Sapphire Question

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Topic Author
Dallas1521
Posts: 46
Joined: Sun Jan 06, 2008 2:47 pm

Large Purchase / Chase Sapphire Question

Post by Dallas1521 » Tue Jan 09, 2018 2:48 pm

Hello all,

I have a large purchase coming up (approx. $5,500) for a trip we are taking later this year. I am thinking of opening a Chase Sapphire Preferred or Reserve card due to the bonus points, though I’m not sure whether this is worth it. The other two cards I have are only 1% cash-back ($55 cash reward for this purchase).

Based on my analysis, with the Preferred card, I would reap at least $763 in benefits in year 1 and would then need to spend at least $3,800 on travel & dining in subsequent years in order to break-even on the $95 annual fee.

With the Reserve card, I would reap at least $848 in benefits in year 1 and would then need to spend at least $3,334 on travel & dining in subsequent years in order to break-even on the $150 annual fee (the fee is $450 minus a $300 travel statement credit which you get as long as you spend $300 on travel).

Some of the benefits under Reserve I don’t think I would make much/any use of, such as Priority Pass lounge access and the $100 credit for Global Entry & TSA Precheck every 4-years.

Since this is a large purchase for us, I am seeing if I can get any more out of it than the 1% cash back on my current card.

Thanks in advance for any input!

onourway
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Re: Large Purchase / Chase Sapphire Question

Post by onourway » Tue Jan 09, 2018 2:56 pm

I would take whatever card offers you the maximum bonus in year 1 and plan on closing or downgrading the card in year 2.

squirm
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Re: Large Purchase / Chase Sapphire Question

Post by squirm » Tue Jan 09, 2018 3:35 pm

You get one year free with csp, not the reserve.

squirm
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Re: Large Purchase / Chase Sapphire Question

Post by squirm » Tue Jan 09, 2018 3:37 pm

I like the csp, you don't have to worry about using the $300 travel credit to justify the card.

BogleMelon
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Re: Large Purchase / Chase Sapphire Question

Post by BogleMelon » Tue Jan 09, 2018 3:45 pm

squirm wrote:
Tue Jan 09, 2018 3:37 pm
I like the csp, you don't have to worry about using the $300 travel credit to justify the card.
But if you didn't spend at least $4750 travel, then how can you justify the $95 annual fees vs a 2% cashback no-annual-fees card?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

Jack FFR1846
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Re: Large Purchase / Chase Sapphire Question

Post by Jack FFR1846 » Tue Jan 09, 2018 3:48 pm

Citi double cash. 2% on everything, all the time. No fee. You don't have to think about it. You can ACH the 2% right into your bank account (what I do). That $5500 turns into $110 right in your bank account. Buy other stuff too? 2% with no category garbage.

I've got 2 dozen cards (I churn) and the double cash is my go to when I'm not pulling some kind of bonus shenanigans.
Bogle: Smart Beta is stupid

onourway
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Re: Large Purchase / Chase Sapphire Question

Post by onourway » Tue Jan 09, 2018 4:00 pm

Is the $863 in rewards on the Reserve after accounting for the cost of the fee or before?

I would also consider the Chase Ink. 80k bonus, $150 annual fee, same 3x points on travel. If your $5500 purchase is for travel, that's $1300 in travel cash in your pocket even after the $150 fee. (96,500 points at 1.5c each).

fabdog
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Re: Large Purchase / Chase Sapphire Question

Post by fabdog » Tue Jan 09, 2018 4:16 pm

if you do any overseas travel, don't overlook the no foreign transaction fee on the Chase Sapphire. The Citibank 2% cashback has 3% FTF

Our summer trips overseas more than pay for the annual fee, the travel points are bonus.

There are also other cards with rewards that have no foreign TF, nerdwallet can help you source them

Mike

Topic Author
Dallas1521
Posts: 46
Joined: Sun Jan 06, 2008 2:47 pm

Re: Large Purchase / Chase Sapphire Question

Post by Dallas1521 » Tue Jan 09, 2018 5:16 pm

Thanks for all the replies.

I’ve never had a card with an annual fee. Do they normally charge you the fee on the first day of the anniversary year? I’m just thinking of when I would have to close the account in order to avoid the fee.

Onourway: For the Reserve card, the $95 annual fee is waived in year 1 so the $763 does not reflect any fees.

onourway
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Re: Large Purchase / Chase Sapphire Question

Post by onourway » Tue Jan 09, 2018 5:19 pm

Dallas1521 wrote:
Tue Jan 09, 2018 5:16 pm
Thanks for all the replies.

I’ve never had a card with an annual fee. Do they normally charge you the fee on the first day of the anniversary year? I’m just thinking of when I would have to close the account in order to avoid the fee.

Onourway: For the Reserve card, the $95 annual fee is waived in year 1 so the $763 does not reflect any fees.
How about for the Sapphire Preferred - is that before fees or after?

Most cards that do not waive the fee in the first year will charge you within the first month or so in my experience.

Tallis
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Re: Large Purchase / Chase Sapphire Question

Post by Tallis » Tue Jan 09, 2018 5:29 pm

BogleMelon wrote:
Tue Jan 09, 2018 3:45 pm
But if you didn't spend at least $4750 travel, then how can you justify the $95 annual fees vs a 2% cashback no-annual-fees card?
I justify it by 1) primary rental car insurance, 2) transferring points from our Chase Freedom cards that we use for 5x quarterly categories, and 3) the 0% foreign-exchange fee.

mikep
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Re: Large Purchase / Chase Sapphire Question

Post by mikep » Tue Jan 09, 2018 5:34 pm

CSR all the way. You earn another 5500 UR on your $5500 travel purchase with CSP which covers the difference in fees at least for the first year. Also at the beginning of your 2nd year you can earn another $300 travel credit within 30 days then downgrade the card if you want. So you pay $450 annual fee, get $600 back in travel credits and get 3x UR points on dining/travel all year. The credit applies to anything that codes as travel so it is easy to use.

killjoy2012
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Re: Large Purchase / Chase Sapphire Question

Post by killjoy2012 » Tue Jan 09, 2018 6:31 pm

I have both the CSP & CSR, with my 1st year anniversary quickly approaching. I do like the CSR, but will likely close it once the 2nd year annual fee hits. The $600 in travel credits, global entry comp, etc. all make it well worthwhile for year 1, but less so in year 2 and beyond IMO. I'll probably close the CSR and keep the CSP unless the math has changed since I last looked.

Another benefit of the CSR is that UR points are worth more when booking travel through he Chase portal. 1.25 vs. 1.5 cents pp.

michaeljc70
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Re: Large Purchase / Chase Sapphire Question

Post by michaeljc70 » Tue Jan 09, 2018 6:54 pm

mikep wrote:
Tue Jan 09, 2018 5:34 pm
CSR all the way. You earn another 5500 UR on your $5500 travel purchase with CSP which covers the difference in fees at least for the first year. Also at the beginning of your 2nd year you can earn another $300 travel credit within 30 days then downgrade the card if you want. So you pay $450 annual fee, get $600 back in travel credits and get 3x UR points on dining/travel all year. The credit applies to anything that codes as travel so it is easy to use.
This. Make sure you time it to get 2 x $300 travel credits. You may be cutting it close now and have to watch the timing (since travel credit is calendar year based). You want to get the $300 this year and next year without getting hit with the annual fee next year. You can get the travel credit pretty easy if you research it. Things like Uber, local trains or public transportation and travel related gift cards may work. There should be a good bonus on the CSR too (I see 50k points without looking much).

onourway
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Re: Large Purchase / Chase Sapphire Question

Post by onourway » Tue Jan 09, 2018 7:31 pm

Chase changed the $300 travel credit for the CSR from calendar year to card-member year for new applications as of May 2017. No more double-dipping.

I got mine just before then.

ThePrince
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Re: Large Purchase / Chase Sapphire Question

Post by ThePrince » Tue Jan 09, 2018 8:31 pm

Dallas1521 wrote:
Tue Jan 09, 2018 2:48 pm
Hello all,

I have a large purchase coming up (approx. $5,500) for a trip we are taking later this year. I am thinking of opening a Chase Sapphire Preferred or Reserve card due to the bonus points, though I’m not sure whether this is worth it. The other two cards I have are only 1% cash-back ($55 cash reward for this purchase).

Based on my analysis, with the Preferred card, I would reap at least $763 in benefits in year 1 and would then need to spend at least $3,800 on travel & dining in subsequent years in order to break-even on the $95 annual fee.

With the Reserve card, I would reap at least $848 in benefits in year 1 and would then need to spend at least $3,334 on travel & dining in subsequent years in order to break-even on the $150 annual fee (the fee is $450 minus a $300 travel statement credit which you get as long as you spend $300 on travel).

Some of the benefits under Reserve I don’t think I would make much/any use of, such as Priority Pass lounge access and the $100 credit for Global Entry & TSA Precheck every 4-years.

Since this is a large purchase for us, I am seeing if I can get any more out of it than the 1% cash back on my current card.

Thanks in advance for any input!
You may want to consider the newly issued Uber card, which give 3% cash back on travel and is no annual fee.

BogleMelon
Posts: 2376
Joined: Mon Feb 01, 2016 11:49 am

Re: Large Purchase / Chase Sapphire Question

Post by BogleMelon » Tue Jan 09, 2018 9:10 pm

Tallis wrote:
Tue Jan 09, 2018 5:29 pm
BogleMelon wrote:
Tue Jan 09, 2018 3:45 pm
But if you didn't spend at least $4750 travel, then how can you justify the $95 annual fees vs a 2% cashback no-annual-fees card?
I justify it by 1) primary rental car insurance, 2) transferring points from our Chase Freedom cards that we use for 5x quarterly categories, and 3) the 0% foreign-exchange fee.
Exactly! that is the point! for #1 and #3 you have to be indeed travelling. If you are travelling, then the $300/yr spending shouldn't be your worry anyways. If you are not travelling in a specific year, then the $95 for the Reserve card wouldn't be justified for this specific year
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

mikep
Posts: 3722
Joined: Wed Apr 22, 2009 9:27 pm

Re: Large Purchase / Chase Sapphire Question

Post by mikep » Wed Jan 10, 2018 8:42 am

onourway wrote:
Tue Jan 09, 2018 7:31 pm
Chase changed the $300 travel credit for the CSR from calendar year to card-member year for new applications as of May 2017. No more double-dipping.

I got mine just before then.
You can still double dip as it renews on your card anniversary date instead of calendar year. http://pointsyak.com/benefits/can-still ... el-credit/

Topic Author
Dallas1521
Posts: 46
Joined: Sun Jan 06, 2008 2:47 pm

Re: Large Purchase / Chase Sapphire Question

Post by Dallas1521 » Wed Jan 10, 2018 9:02 am

Onourway: The Sapphire Preferred rewards amount in year 1 ($848) was after the $150 annual fee. My math was 50,000 bonus points X $0.015 = $750 minus the net annual fee of $150 = $600, plus $248 rewards on my $5,500 travel purchase ($5,500 X 3 X $0.015).

I will also look into the new Uber card w/ the 3% cash back on travel.

Thank you everyone for your replies!

Da5id
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Re: Large Purchase / Chase Sapphire Question

Post by Da5id » Wed Jan 10, 2018 9:16 am

Dallas1521 wrote:
Wed Jan 10, 2018 9:02 am
Onourway: The Sapphire Preferred rewards amount in year 1 ($848) was after the $150 annual fee. My math was 50,000 bonus points X $0.015 = $750 minus the net annual fee of $150 = $600, plus $248 rewards on my $5,500 travel purchase ($5,500 X 3 X $0.015).
Where do you get the 0.015 multiplier from? Are you saying Preferred and meaning Reserve? Using CSP you only get $0.0125 if using the Ultimate Rewards portal ($0.015 is for CSR). For travel partners (United/Hyatt/etc) you may get more or less.

I have CSR (had CSP too, downgraded that). I like it. I think the side benefits (car rental primary insurance, trip cancellation insurance, etc) are worth something. Ability to move my Chase Freedom points to travel partners, also nice. Lounges are hit and miss, but occasionally we get a free meal and a quiet place to sit, also has value. Global Entry is also nice, as it gets you TSA precheck status on domestic flights.

Topic Author
Dallas1521
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Joined: Sun Jan 06, 2008 2:47 pm

Re: Large Purchase / Chase Sapphire Question

Post by Dallas1521 » Wed Jan 10, 2018 9:43 am

Yes, I'm sorry - I keep mixing up Reserve and Preferred in my head - you would think that something called "Preferred" is better than its alternative.

Have you had to use the trip cancellation insurance w/ the Chase Sapphire card?

Da5id
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Re: Large Purchase / Chase Sapphire Question

Post by Da5id » Wed Jan 10, 2018 9:55 am

Dallas1521 wrote:
Wed Jan 10, 2018 9:43 am
Yes, I'm sorry - I keep mixing up Reserve and Preferred in my head - you would think that something called "Preferred" is better than its alternative.

Have you had to use the trip cancellation insurance w/ the Chase Sapphire card?
Nope. I've only had it for 2 years (got it while the 100K bonus was there, whee), so hasn't come up.

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