Description: The following passage is mainly going to talk about two cards named Sapphire Preferred and Chase Sapphire Reserve, it will analyse the differences between them and tell us which cards can make enough sense for people to use.
Today we’re going to talk about which card makes more sense to say Sapphire Preferred or the Chase Sapphire Reserve.
The main reason we’re doing this is that there’s a change in how the reserves travel credit works in the past, it is based on the calendar year, so if you got the court, you would get a 2017 credit, once January 1st or 2018 rolled around, you would have access to the whole 300 dollars of the 2018 credit.
This means that you got travel credits instead of one meaning that Chase was paying you to have the card, let’s see how the cards compare, if you want to follow a log book about blog post and we also have an excel in there where you can access it.
If you want to change the numbers in Excel for yourself to see how it compares, all you have to do is to go to file and either download Eze or make a copy of no instructions on the top left, all you need to do is to change the cells that are yellow, you enter whatever number is relevant for you, whether it’s a yes or no answer, you don’t change any of the other cells, because the rest of the cells are formulas.
We’ll look at year one, first, which is on the left? All you need to do is to enter how much money you intend to spend on travel dining and everything else in the first year, we’re going to assume that you spend 3000 almost on travel 3000 dollars on dining and four thousand dollars on everything else.
We also assume that you can hit the minimum spend a four thousand dollars in the first three months for both cards, the major difference is for dining and travel, for the che Sapphire reserve, you’re in three expect and the preferred you only earn to expect what the reserve we end the year of seventy two thousand points, with the preferred, we end a year of 66 thousand points.
The next step is figuring out how you value ultimate reward points, so if you want to catch them out, if you want to use a travel portal, it’s worth 1.5 to 1.25 cents per point, if you want to transfer partners which are a bit more complicated, but usually worth the effort, it’s about two cents per point, all you have to do is to put an X in one of the three cells in this example.
We’re going to use the middle one, so this Moon’s effort of reserve your points will work about eleven hundred points in terms of travel and for the taste-off I preferred about 850 looking at the Salome, you get about two hundred fifty dollars more in value by picking the reserve over the preferred.
The next thing we need to look at is annual fee and also travel credit, this $150 annual fee will prefer there is a $95 annual fee, but it’s waived in the first year, the reserve also has a $300 travel credit that you get every gear, the good thing about it is that it’s easy to use, so anything that codes as travel on your credit card will get reimbursed. Some examples would be hotels airfare ubers lists and even some tolls.
The next thing we need to consider is a Global Entry credit, so if you have it from another card, you don’t value it, so you leave it as a note, but if you care about it, you don’t have it, then I would put a yes here.
The next thing we need to consider is its Priority Pass, so with the Reserve, you get free access to a bunch of lounges, the value here is subjective, because it depends on how you value these lounges and also how often you go to the airport.
The food and the drinks in these lounges are different depending on which airport you’re at, I typically value it at about $10 per visit, so typically the visit is about $50, I don’t think it’s worth that, most of the time, you have some food, you have three alcohol and you have three coffee.
The tuition is probably going to be paid five dollars for coffee and maybe another five dollars for a few snacks at the airport unless you brought anything, so comparing it to the price, you can get outside of the lounge itself, I think it’s worth about $10.
If you’re planning to get drunk before getting on the plane, this is work twenty or thirty dollars to you depending on how many cocktails you have, most of these places to have open bars, so you can have fun with it.
A lot of other premium credit cards also have this park, so you need to consider how you value it, so if you get the city prestige of the MS platinum card, you’re going to get this, we’re going to assume the global entry credit is worth zero and the priority pass is also worth zero, the assumption is that you have other credit cards that already have this perk, so you can value it.
The last level at the bottom is to count for any other benefits, that might have missed or anything else you value, the good example would be truthful, so the Reserve has a six-hour trip delay, while the preferred has a twelve-hour trip delay, depending on the airport, you fly out of as well as halting.
That might be a very beneficial park or it might not be worth anything, if you’re based in Chicago, you typically fly during busy times like Thanksgiving or Christmas, you’re going to get delayed by more than six hours.
In this situation, you might value it a lot, once you hit the six-hour mark, you get to spend up to five hundred dollars on food, taking all these assumptions to net value, for the reserve is nine hundred and thirty dollars.
The preferred is 825, so the difference is one hundred and five dollars, in this case, who would take the reserve over to preferred, but the numbers off, we change depending on how you value different things.
If you wanted to use the points of the statement credit instead of towards travel, it would make more sense to take to prefer, because you come out about 90 dollars, ahead six hundred and sixty dollars versus five hundred seventy, the same thing is true.
If you transfer partners, so the preferred persist well of 94 the reserved about a thirty dollar difference, if you value global entry and priority pass at one hundred dollars each and the reserve comes out ahead by one hundred and seventy dollars planning with the spending figures also obviously changes the value, so you need to see what makes sense for you.
As long as you can hit the minimum spend a four thousand dollars in the first three months, I think both cards are good choices, if you go through the calculations and a reserve gives you more value than I would strongly recommend it.
The only situation where I would not recommend at a sapphire reserve is that if you don’t have the liquidity, if you can’t pay a four hundred and fifty dollar annual, so in the first month, I would strongly recommend the preferred, because it’s waived.
If you are looking to apply for the shade Sapphire Preferred, we have a referral link down below, it’ll help us out if you use it.
The next thing we need to look at is your onwards, so it’s the same as year one without the sign-up bonus and without the global entry predator, let’s assume the spend is the same, so $3,000 and $4,000, at the end of year, one for the reserve, you get twenty two thousand points and it was the preferred you get sixteen thousand points.
Let’s assume that we’re going to use the points towards travel portal, so one point five and one point two five cents per point that means that our points are worth three hundred thirty dollars and two hundred dollars.
Once you factor in the annual fees, you can use travel credit, because there’s no reason to have to reserve, if you can’t, you’re coming out with 180 for the reserve and one hundred and five dollars with the preferred, you come ahead by seventy five dollars by picking the reserve, what the break-even point was that we calculated it down below, so we’re solving for x which is the spend.
We need to do on trouble and dining, once we factor in everything in your software X, the value of it is two thousand seven hundred and fifty dollars about $2,800, this means that if you spend more on that on dining and travel than you’re better off taking the reserve, if you spend less, you should take the preferred going back to the prior example.
If you cash them out, you get about the same value, if you use them for transfer partners, you still get more value from the reserve overall, I think the reserve makes more sense for most people, but it depends on you, so the point of this is to calculate your spend to see which one gives you more value.
I would make the argument that you could get those cards, because after year one four one four cards, you can always downgrade some of the freedom or freedom unlimited in order to keep your credit history alive and keep your credit score high, the only situation where I would recommend to preferred over the reserve is that if the calculations tell you that or if you have liquidity issues, it might make sense to get the preferred even long term.