Last week we officially learned about major changes coming to the popular Chase Sapphire card lineup. These changes have now officially kicked in (and are reflected on the credit card applications), so I wanted to recap what’s changing.
Chase Sapphire improvements as of August 16, 2021
Both the Chase Sapphire Preferred® Card (review) and Chase Sapphire Reserve® Card (review) have now undergone major refreshes. These adjustments are now “live” for both new and existing cardmembers. The changes are entirely positive, and the annual fees on these cards won’t be increasing. That sure is nice to see, given that new benefits often come with an increased annual fee.
This follows recent changes having been made to the Amex Platinum, which is a competitor to the Chase Sapphire Reserve. Let’s go over the details.
Chase Sapphire Preferred changes
The Chase Sapphire Preferred Card now has the following new benefits:
- A $50 hotel credit every cardmember year, usable through the Chase Travel portal (these stays typically don’t earn points or receive elite credits with a hotel group); new cardmembers will receive this right away, while existing cardmembers will receive this after their next account anniversary
- 5x Ultimate Rewards points on travel booked through the Chase Travel portal
- 3x Ultimate Rewards points on dining, streaming services, and online grocery store purchases (excluding Target, Walmart, and wholesale clubs)
- The card continues to offer 2x Ultimate Rewards points on all other travel purchases, and 1x Ultimate Rewards points on everyday spending (as it previously did)
- A 10% anniversary points bonus, whereby you get a 10% bonus on Ultimate Rewards points earned when you renew your card and pay the annual fee; the 10% bonus is determined by “base” earning per dollar spent, and doesn’t apply to the welcome bonus, which means that you’re basically getting a 10% bonus on your total spending amount, rather than on your points earned
The annual fee on the Chase Sapphire Preferred continues to be $95.
Chase Sapphire Reserve changes
The Chase Sapphire Reserve Card now has the following new benefits:
- 10x Ultimate Rewards points on Chase Dining, as well as hotels and car rentals booked through the Chase Travel portal
- 5x Ultimate Rewards points on flights booked through the Chase Travel portal
- The card continues to earn 3x Ultimate Rewards points on all other dining and travel purchases, and 1x Ultimate Rewards points on everyday spending
The annual fee on the Chase Sapphire Reserve continues to be $550.
My take on these Chase Sapphire changes
If you ask me, these Chase changes make a lot of sense, and for many make the Sapphire Preferred significantly more compelling than the Sapphire Reserve (which I think is what Chase wants).
As I view the Chase Sapphire Reserve changes:
- I don’t think these are a huge deal, at least based on my travel and dining patterns, since you need to book directly through Chase to earn more points
- There’s typically an opportunity cost to doing so, and I imagine Chase is largely just passing on some of its commission on travel bookings in the form of points
- That being said, I recognize that some people may find this to be more useful than I do
The Chase Sapphire Preferred changes are much more significant:
- Some may appreciate the $50 hotel credit, though personally it’s not something I’d value that much; you have to book through Chase, which typically means you won’t receive elite perks or points if staying with a major hotel group, so this is just a way for Chase to get people to book through the portal (Chase also gets a commission on these bookings, so it’s probably a pretty low cost new perk)
- The much bigger change is that you earn 3x points on dining, streaming services, and online groceries; it makes sense that the Sapphire Preferred earns 3x points on dining, since the Chase Freedom FlexSM (review) and Chase Freedom Unlimited® were refreshed last year to offer 3x points on dining as well
- The icing on the cake is the 10% anniversary bonus, which means you’re essentially earning over 3x points per dollar spent on dining, etc.
Some may wonder “well why would Chase make the Sapphire Preferred more rewarding in some ways than the Sapphire Reserve?” Everything we’ve seen suggests that the Sapphire Preferred is more profitable for Chase than the Sapphire Reserve:
- The Sapphire Preferred typically has a better welcome bonus; this suggests Chase wants people to apply for the Preferred over the Reserve
- Even though the Sapphire Reserve has a higher annual fee (which you’d think would be good for Chase), the $300 annual travel credit and Priority Pass membership really cuts into the margins
- Perhaps the biggest reason Chase wants people to get the Sapphire Preferred over the Sapphire Reserve is because points can be redeemed for 1.25 cents each towards travel with the former, and for 1.5 cents each towards travel with the latter, so the Sapphire Preferred has lower cost points
As someone who exclusively uses Ultimate Rewards points to transfer them to hotel and airline partners (where the ratio is 1:1 for both cards), these changes will likely make me switch to the Sapphire Preferred.
Major changes have been introduced to both the Chase Sapphire Preferred Card and Chase Sapphire Reserve Card. The Sapphire Preferred has become significantly more lucrative, offering more bonus categories, a 10% anniversary points bonus, a $50 annual hotel credit, and more.
What do you make of these Chase Sapphire changes?