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The Chase Sapphire Reserve is one of the most valuable travel rewards credit cards on the market. Its highlights consist of: 3X on dining and travel, 1.5 cents per point redemptions, Priority Pass access (with unlimited guests), solid travel and purchase protections, and a very easy to use $300 travel credit. But the $300 travel just underwent a big change that could shift the value proposition of this card for a lot of people.
First, a quick refresher on how the travel credit works and why it’s so valuable.
What counts as travel for the travel credit?
The Sapphire Reserve’s travel credit is so valuable in part because it’s worth so much: $300. But the real draw is that it’s so easy to use because it applies to so many different types of purchases that can code as travel.
Chase provides the following definition for what counts as travel:
Merchants in the travel category include airlines, hotels, motels, timeshares, car rental agencies, cruise lines, travel agencies, discount travel sites, campgrounds and operators of passenger trains, buses, taxis, limousines, ferries, toll bridges and highways, and parking lots and garages.
That’s much broader than the travel credits from other cards like the Premier Rewards Gold Card from American Express or the Citi Prestige® Card.
The change to the Sapphire Reserve travel credit
The Sapphire Reserve’s travel credit has always been based on calendar year. This means that it resets January 1 of every year. This was great because it helped consumers remember when they could use their credit but it was really great because it allowed cardmembers to receive two $300 credits before they even had to pay the $550 annual fee. In other words, it gave them the opportunity to profit $190 (on top of all of the other benefits) in the first year.
Now, per new terms, for those who apply for the card May 21, 2017 and after, the travel credit will be applied based on membership (or anniversary) year.
Specifically the new terms state:
A statement credit will automatically be applied to your account when your card is used for purchases in the travel category, up to an annual maximum accumulation of $300. Annual means the year beginning with your account open date through the first statement date after your account open date anniversary, and the 12 monthly billing cycles after that each year. (For applications submitted before May 21, 2017, annual means the year beginning with your account open date through the first December statement date of that same year, and the 12 billing cycles starting after your December statement date through the following December statement date each year.)
So you’ll be able to use your credit from the date of your account opening until the closing of the statement that includes your one year anniversary date. So if you opened up a card June 15, 2017 and then your June 2018 statement closed on June 30, 2018, your credit should reset after June 30, 2018. Since this isn’t as clear as the calendar year policy, I’d recommend new applicants to call up and verify the dates just to be sure.
It’s not yet clear if this change will eventually affect existing cardmembers.
Is this a new trend?
This change is in line with how the $325 travel credit for the newly released US Bank Altitude Reserve works. I honestly think that given how much more knowledgable the consumer base is getting about how to utilize travel credits, this will be the new policy found across all cards. It won’t surprise me to soon see American Express, Citi, etc., alter their policy to the same.
I don’t think this change is unfair but it is significant because it could signal a shift in the way banks are implementing these credits. It’s also the first negative change we’ve seen to the Sapphire Reserve (aside from the drop of the intro bonus which we knew was coming).
I personally think the Sapphire Reserve is far too loaded to be sustainable in the long run, and I have my doubts about how long the 3X on both dining and travel, unlimited guests on Priority Pass, and 1.5 cents per point redemptions through the Chase travel portal will hang around. I think at least one of the core benefits will be devalued sooner rather than later.
Ultimately, for those applicants who never intended on paying the annual fee for year two but looked forward to collecting that second annual travel credit, this change will no doubt sting. Hopping on the Sapphire Reserve is no longer the same bargain that many of those people hoped for. However, for those of use who intended on keeping the card for years to come, it’s really not a major change since the change doesn’t really affect the value for the card.
H/T: Travel After Work.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. His content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.