Few days ago I published a post on renewing my Chase Southwest credit card. It generated a lively discussion in the comments section. One topic that kept coming up was whether it makes sense to renew Chase Sapphire Reserve (CSR) or downgrade it to Chase Sapphire Preferred (CSP).
This isn’t a “one size fits all” kind of situation, so I recommend everyone do their own math to figure out the best option for their (not someone else’s) family. In fact, I ask you to at least consider not renewing any premium Chase card, though I realize it’s a tall order given the love affair with UR currency in the miles and points community. And hey, I admit, I love transferrable UR points too. Just not enough to pay an annual fee to keep them “alive.”
So, the assumption is that you applied for Chase Sapphire Reserve within the last few months and are currently debating on what to do with it at renewal time. Let’s assume it’s the only UR card that allows you to transfer points to airline and hotel partners. And you absolutely, positively want to keep that status quo. You don’t have a business, so applying for Chase Ink Preferred isn’t an option.
If you are under 5/24 (or get pre-approval in branch), and qualify for a sign-up bonus on Chase Sapphire Preferred, I recommend you try to get it in the next few months. Then, at CSR renewal time, you can decide on which one to keep open. If you settle on CSP, then simply cancel CSR (or convert it to Chase Freedom or Freedom Unlimited, as one of the readers pointed out). If you decide that CSR is a good long-term option, cancel your existing CSR first, then upgrade your CSP to CSR. Makes sense?
This will allow you to retain transferability of UR points and to double dip on $300 calendar year travel credit. If you do decide to convert CSP to CSR, make sure to do it before last statement for 2017 generates.
That way you can take advantage of this year’s $300 credit. Actually, by this logic, it could make sense to convert CSP to CSR regardless, if the option is available. Of course, there is some risk that Chase will not allow you to get a second $300 credit for 2017. See my response to one of the commenters for further explanation.
You can read about CSP in my Hot Deals page. It does pay us commission. I don’t currently recommend CSR because the bonus is slashed in half. I’m fairly certain Chase will raise it at some point, so I think you should wait it out. No, it has nothing to do with the fact that CSR doesn’t currently pay us commission. I have been championing this card for few months after it left affiliate network when the offer was still 100K points. Alas, things have changed.
CSP and CSR are very similar. Both come with travel protection, primary car rental coverage etc (see detailed comparison here). The biggest difference, of course, is the annual fee. CSP costs $95 each year, while CSR will set you back $450. But, you can get an annual travel credit of $300 on the latter, so the real difference for many is only $55.
So, which option should you choose?
Here are a couple of things you should consider:
1) Determine if you’ll need Priority Pass lounge access. This is a very nice perk, but only if you end up utilizing it. Lounges can be hard to get to sometimes, and trekking to a different terminal just to use them isn’t very convenient and defeats the purpose of relaxing during layover.
I value one-time Priority Pass lounge access at $35 max (for my family of four), but ONLY if we are hungry and if getting to lounge isn’t a nuisance. My husband will not agree to spend 30 minutes wondering around airport just to get some snacks and a coke. Plus, remember, your layover may end up being shorter than expected due to flight delay. So, the value of this benefit is kind of iffy for most families who fly once or twice per year. But it is a nice perk to have, no question about it.
2) Determine the scale at which you can reasonably accumulate UR points each year. Keep in mind, you can get 1.25 cents on travel via CSP. If you redeem a lot of points, extra 0.25% percentage bump may be worth it. Otherwise, converting CSR to CSP might be the way to go.
3) This goes along with my previous point. Do you currently have a large stash of UR points? If so, renewing CSR may be best, especially if you expect to burn points within the next few years.
4) Can you utilize the $300 annual allowance easily? Make sure that you won’t be just spending money on travel because you have the credit at your disposal. The idea is to pay for things where you would use cash otherwise (not miles or points).
5) Do you usually transfer UR points to airline and hotel partners? How likely are you to change this pattern going forward? If you like fancy Hyatt resorts that cost a fortune during high season, then redeeming UR points at 1.5 cents apiece isn’t going to do much for your wallet. Remember, both CSP and CSR unlock transfers to partners at the exact same rate.
6) Do you spend a lot on travel and dining? Honestly, getting 3 points (via CSR) instead of 2 (via CSP) isn’t a game changer for most folks, but every little bit adds up.
Two hypothetical examples
The best way to illustrate my logic is to highlight two imaginary families. Here we go:
We have a gal named Jill. She is a single mom with two young children. The money is tight, so she only flies once per year to visit relatives. Plus, it’s hard with two kids. The airport where she usually has a layover does have a Priority Pass lounge, but she is not sure on whether she will be able to use it. Truth be told, Jill doesn’t like lounges because it’s very hard for her to control the kids on her own.
Jill will have only 15,000 UR points at her disposal at the time when CSR will come up for renewal. She really wants to keep it open because she loves Hyatt hotels. Jill only uses her UR points for redemptions on category 1 Hyatt properties, which cost 5,000 points per night. Those same hotels go for $150, so she gets 3 cents per UR point, sometimes more. For Jill no other hotel chain will ever come close to Hyatt. This is her treat for taking care of kids on her own.
When it comes to flights, Jill usually transfers UR points to Southwest. As a mom of small kids, she likes the fact that she can cancel tickets and get all of her points back. Jill usually signs up for several new credit cards per year (mostly travel rebates), so she can offset ticket taxes and other expenses.
Otherwise, she makes sure that her UR points cover everything travel related. She also doesn’t think she will accumulate more than 25,000 UR points per year, if that.
Jill should stick to Chase Sapphire Preferred. If she mostly transfers points to Southwest and Hyatt, there is no reason to have CSR. You can usually get 1.5 cents per Southwest point towards flights, so it’s a wash in this respect. She doesn’t like lounges, so this perk is worth very little to her. She can’t easily utilize $300 yearly travel credit, so she would probably have to buy airline gift cards and sell them at a loss. CSR is not a good fit for her situation.
We have a guy named Jack who has a wife and four kids. They regularly fly to visit his parents who live in a different state, and use his existing stash of Southwest points for that. The flight always involves a connection, and there happens to be a Priority Pass lounge in the same terminal. Feeding six people isn’t cheap, so complimentary access is a nice perk to have.
At the moment, Jack has 150,000 UR points with no immediate plans to use them. His family spends quite a bit each month and he makes sure to maximize 5% categories on Chase Freedom. He expects to accumulate at least 50,000 UR points in 2018. He is planning to burn his stash on a trip to Hawaii, but won’t be able to do it till the end of 2018.
Unfortunately, his family can only fly over Christmas holidays, and award availability is scarce during that time. Jack is pretty sure he will have to burn UR points on revenue flights, but of course, he may get lucky. Though getting 6 award seats on the same flight during holidays is a tall order indeed.
Jack’s family spends a lot of money on travel each year, so $300 credit is as good as cash to him.
Jack should renew his Chase Sapphire Reserve. Even if they only utilize lounge access twice each year, that’s easily $80 in food savings for a family of six. That right there makes up for $55 difference in fee between CSP and CSR.
Let’s say he ends up burning his UR points on revenue flights. His 200K points will unlock the value of $3,000 in airline tickets via CSR. If he downgrades to CSP, the value will be only $2,500. That’s $500 difference. Of course, if award tickets become available, it’s a wash, but when traveling during holidays, the odds are against you.
When it comes to annual fees, many times it’s all about estimating the odds of using this or that benefit. Nobody can predict the future, but people are creatures of habit. So, take your best guess and go from there. The winner of CSR vs. CSP battle will be different for everyone. And for many families, the answer is actually: neither one.
Reader, are you Jack or Jill?
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Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.