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How to Make the Most of Chase Sapphire Reserve

Jan. 24, 2017
Credit Cards, Travel Credit Cards
How to Make the Most of Chase Sapphire Reserve
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

The Chase Sapphire Reserve® is a premium card with an unprecedented slate of cardholder goodies. They include a drool-worthy sign-up bonus, ample spending rewards, a suitcase full of premium travel perks, travel credits worth hundreds of dollars annually and many lesser-known gems.

The list of benefits and rewards is dizzying — and you pay a hefty annual fee of $450 to get them. That makes it crucial to extract as much value from the card as possible. Making the most of the Chase Sapphire Reserve® means taking full advantage of the perks it provides, as well as accumulating and spending rewards wisely. Here’s how to do that.

Earn the sign-up bonus

When you’re approved for any new credit card, you want to meet the requirements to collect its sign-up bonus. This is especially important with the Chase Sapphire Reserve® because the bonus unlocks much of the card’s overall value.

Chase describes the bonus like this: Earn 50K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards® .

So you’ll want to use the card heavily at first. For many people, that means using it for everyday spending and large purchases. Big spenders who can meet the threshold easily might use it more strategically by spending mostly in the bonus categories of dining and travel. Just make sure you hit the required spending level by the deadline.

Balance transfers don’t count toward the required spending — and the card is a poor choice for balance transfers anyway, with a fee of 5% of the amount transferred. The ongoing APR is 17.74% - 24.74% Variable APR.

Rack up rewards points

The rewards on the Chase Sapphire Reserve® encourage you to keep using the card long after you’ve pocketed the bonus.

The card gives you unusually good rewards in two popular categories: travel and restaurants, which earn 3 Ultimate Rewards points per $1 spent. It gives 1 point per $1 spent on other purchases. Points can be worth 1.5 cents apiece or more, depending on how you redeem them, so never miss an opportunity to earn bonus rewards.

  • Triple points for travel doesn’t apply just to airfare and hotels. Use the card for other expenses that qualify as travel, such as taxi rides, train fares, even parking lots and garages. Gas doesn’t count as travel, however.
  • Triple points for dining out means the Chase Sapphire Reserve® should always be the card you hand to the waiter. Fast food and fast casual qualify, too.

Chase’s website includes an FAQ that spells out what kinds of merchants count in which categories.

Use the travel credit

The Chase Sapphire Reserve® is a general travel credit card that doesn’t require loyalty to a specific airline or hotel chain. That makes using its $300 annual travel credit much easier.

The card’s daunting downside, the annual fee of $450, becomes much easier to stomach if you know you’ll use the travel credit. That lowers the effective cost of the card to $150 per year.

Travel reimbursement is granted annually based on your cardholder anniversary. (For accounts opened after May 20, 2017. For older accounts, annual meant a calendar year.) Unused credit doesn’t carry over from year to year. Chase applies the credit automatically to your travel purchases, essentially erasing the first $300 worth each year. The credit applies to the same kinds of purchases that qualify for triple points as travel.

» MORE: How credit card issuers define travel

Redeem points for travel through Chase

Chase offers multiple ways to use your rewards points — cash back or gift cards at a rate of a penny per point, for example. But most aren’t as valuable as using them to book travel through the Chase Ultimate Rewards travel portal. There, points are worth 1.5 cents each, or 50% more than their cash value.

That means the rewards rate you earn by using the Chase Sapphire Reserve® on dining and travel effectively jumps from 3% to 4.5% if you spend points by booking travel through Chase. And spending on everything else returns 1.5%, putting it on par with some of the better flat-rate rewards cards.

When booking travel through Chase, there are no flight blackout dates.

If you do just three things — earn the sign-up bonus, use those points to book travel through Chase and use your annual travel credit — you’ve essentially covered the annual fee for five years. That’s because the bonus is worth $750 and the effective annual fee after travel credits is $150.

» MORE: Chase Ultimate Rewards review

Transfer points for more value

One option for redeeming your points is more limited but could yield even better value than booking through Chase: transferring points to a partner airline or hotel loyalty program.

You can transfer Ultimate Rewards points to one of Chase’s partner airlines or hotel loyalty programs at a 1:1 rate.

For example, say you found a $500 United Airlines flight for 25,000 miles at united.com. You could convert 25,000 Ultimate Rewards points into 25,000 United miles and then pay for the ticket with them, giving you a redemption rate of 2 cents per point. That’s higher than the 1.5 cents per point you get for booking the same flight through the Chase travel agency, where the $500 fare would cost 33,333 points.

Transfer partners are:

Airlines:

Hotels:

Nerd tip

In general, cheaper flights and hotel stays favor redeeming points through the Chase travel portal. Pricier ones, such as first-class airline bookings, are usually a better deal if you transfer points. You’ll have to do the math to be sure. The price divided by the points needed will give you the per-point value.

Avoid other redemption options

You can also redeem points for cash starting at 2,000 points ($20) with a statement credit or electronic deposit into a checking or savings account. That’s not terrible, but not as lucrative as redeeming for travel. Gift cards are available but aren’t a deal unless they’re offered at a discount, making your points worth more than a penny each. Using points for Amazon shopping is an even worse deal; points there are worth 0.8 cent each.

Capitalize on other travel perks

The Chase Sapphire Reserve® includes other perks that add value:

  • Lounge access: Be sure to activate your included membership in Priority Pass Select, which gives you access to more than 1,000 airport lounges worldwide. To find a lounge at airports you frequent, see the list.
  • Global Entry or TSA PreCheck: The card will reimburse you the application fee for Global Entry or TSA PreCheck, programs that give you access to special — and often speedier — lines at airport security and customs. The fee is $100 for Global Entry and $85 for TSA PreCheck. You are reimbursed for one or the other. Both programs are good for five years, and you’re eligible for reimbursements once every four years — presumably so you can reapply before your membership in a program expires. You must charge the application fee to the Chase Sapphire Reserve®, and you’ll receive a statement credit automatically.
  • Rental car discounts: Discounts are available when booking with the card at National Car Rental, Avis and Silvercar.
  • Hotel perks: Chase promises special benefits if you book your hotel stays through the Luxury Hotel and Resort Collection program, LHRCollection.com. Benefits vary by hotel but could include a room upgrade, breakfast and early check-in and late checkout.
  • Other benefits: The card has no foreign transaction fees and includes travel and purchase protections, travel assistance and concierge service. Many of these perks stem from the card being on the Visa Infinite platform.

Team it with a different card

The bonus categories on the Chase Sapphire Reserve® are good for earning Ultimate Rewards points, but if you’re willing to use a complementary card in tandem, you can rack up points even faster.

Two good choices from Chase also earn Ultimate Rewards points, which you can transfer to the Chase Sapphire Reserve® and redeem for travel at the higher rate.

They are the Chase Freedom®, which gives 5% back in rotating bonus categories and 1% back on everything else, and the Chase Freedom Unlimited®, which pays a flat 1.5% back regardless of what you’re buying. Chase markets these as cash-back cards, but they earn rewards in points you can transfer to the Chase Sapphire Reserve®.

So, for example, if restaurants are a quarterly bonus category for the Chase Freedom®, it’s a better card to use for dining out than the Chase Sapphire Reserve®. That’s because you get 5 points per dollar spent instead of 3 points, at least up to the Chase Freedom® spending limit of $1,500 per quarter.

Then, to get the most of those points, you could transfer them to your Chase Sapphire Reserve® account and book travel through Chase, getting a reward boost equivalent to a 7.5% return.

Nerd note

The Chase Sapphire Reserve® is an enhanced version of the popular Chase Sapphire Preferred® Card, which has similar but less lucrative features and a lower annual fee of $0 for the first year, then $95. Still, we think most people will find the Chase Sapphire Reserve® earns its keep.

How to redeem rewards on the Chase Sapphire Reserve®

To redeem your points:

  1. Log on to your Chase account.
  2. Select “Ultimate Rewards” at the bottom left, and select the card you want to access. If you have several Chase cards, they’ll all be displayed together.
  3. Choose how you’d like to use your points.

The Chase Sapphire Reserve® has oodles to offer frequent travelers, but it’s worth getting only if you can extract enough value from rewards and perks to outweigh the annual fee. If you make the most of the card, you will do just that.

Gregory Karp is a staff writer at NerdWallet, a personal finance website. Email: gkarp@nerdwallet.com. Twitter: @spendingsmart.