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I’ll preface this entire post with the fact that when I made the decision to downgrade I held a Citi Prestige ($350), Amex Personal MB Platinum ($550), and an Amex Business Platinum ($450). 4 premium cards and $1800 in annual fees. Yes, all of these cards come with travel credits and perks that make each and every one of them individually valuable, it doesn’t mean that refinement isn’t needed. And that’s what I did.
At the beginning of the month Chase charged me another annual fee on my Chase Sapphire Reserve card. Since its inception it’s been a go-to card for most people who have it, and I was amongst the choir singing its praise. The benefits are immense with 3x points in dining and travel, priority pass membership, 1.5 cent redemption, car rental insurance, $300 airline credit, and when it first came out it had an incredible 100k bonus. I, picked it up with a 50k bonus, but have put quite a bit of my personal spend on the card. If this is the only premium card that I held, I’d keep it, no doubt. But, as I mentioned above – it’s not. So why did I decide to product change to a Sapphire Preferred?
A big argument for keeping vs downgrading is that it’s, in effect, only a $55 difference in annual fee from the Sapphire Preferred.
Because it offers a $300 travel credit, the $450 annual fee is dropped down to $150 out of pocket. But, this assumes that I’d prefer to put those $300 on my Chase Reserve. In fact…I don’t opt to put most of my travel there because most of my travel is work related. Also, you don’t earn 3x points on the $300 travel credit, so that’s 900 points, or $13.5 ( at 1.5c) that should be added to the $55. Or $68.50.
That $68.50 has to be made up somewhere and the biggest difference would be 3x dining vs 2x.
Recouping the $68.50 depends on how you value Ultimate Rewards. If you use a blanket 2 cent valuation of Ultimate Rewards then I’d need to spend $3425 in a year for it to make sense.
- The Reserve gives 1.5 cent redemptions = $4567
This means, for me, that the fee difference has to come from the other benefits.
Citi Prestige – Priority Pass Membership and 4th night free
In the past month, I also got hit with another annual fee on my Citi Prestige ( $350 for being Citi Gold). I mainly keep it for the 4th night free benefit, but it also comes with Reserve commensurate trip cancellation protection, and a priority pass membership ( amongst a bevy of other benefits). Citi Prestige also comes with a $250 airline credit which drops the fee down to $100. Yes, there is similar opportunity cost I mentioned above, but it’s easily overcome with the 4th night benefit. In fact, the $350 is easily overcome most years without even worrying about the fee credit. Not that I leave it on the table, just saying…
Since I know I’ll probably be keeping my Prestige longer term, instead of using my Reserve priority pass, I’ve now activated my Citi Prestige Priority Pass in app and it’ll be my go-to from now on.
Personal hotels, etc can go on this card at 3x which is relatively equal to the 3x with Reserve ( although points are worth a little different).
So some of my Reserve benefits are covered.
Ink Business Preferred – 3x work travel
I mentioned this above, but the bulk of my travel is work related and this card offers 3x points on travel which negates the 3x travel on the Reserve.
Amex Platinum MB = 5x on airfare
This is a beast card in this category as long as purchases are via the airline’s actual site or amex travel. Otherwise, push it through Ink biz Preferred or Citi Prestige.
Amex is rumored to be releasing a beastly new Gold card
Included benefits are 4x dining, 4x supermarkets, 3x travel. I mean…that doesn’t even include the rumored dining credit. If this is the case…it’ll become my go-to dining card anyways which buries the Reserve in the only category that was supposed to make up the fee difference.
It’ll also be my go-to for supermarkets.
Where was I using my Reserve most?
As I analyzed my spending I began to realize that I was utilizing the card most on every day purchases and bills associated with non-category bonus spend. I also utilize the rental car coverage a lot.
These are both perfect for the Sapphire Preferred. I’ll use my Sapphire Preferred for primary rental coverage at Sixt where I got this benz upgrade due to comped Platinum status.
Overall: I downgraded my Reserve to a Preferred
I still think the Chase Sapphire Preferred is one of the single best overall cards on the market. I first picked up a Sapphire Preferred back in 2013 and downgraded it to a Freedom last year when I got a Reserve. It’s back in my wallet now. This doesn’t mean that the Reserve isn’t worthwhile, on the contrary, I think it’s still super valuable for most that hold it. But…
Everyone’s situation is different and requires unique analysis to assess which cards make the right sense in your wallet. I am certainly amongst a distinct category of cardholders willing to spend a lot of money on annual fees, but I also am able to utilize and extract value in excess of the fees from all of the cards. When I don’t feel like the value is there, I reassess and rearrange. Since I’ve requested a downgrade within 30days of the annual fee hitting, I’ll get a refund/statement credit of $355.