The Best Credit Card for Travel Rewards | ModMoney

The Best Credit Card for Travel Rewards

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A few months ago, Chase had the universe of credit card nerds (yes, that exists) going crazy over the release of its newest card, the Chase Sapphire Reserve. You can think of this as an upgrade to the Chase Sapphire Preferred (a must-have card until this new release). Y'all, the Reserve has all of the credit card nerds energized for a reason. In my opinion, it is the best travel rewards card on the market.

A quick caveat: I don't recommend the Reserve to someone who is starting out. If you are in the early innings of building up your credit score, I recommend a card with no fee and good cash back opportunities like the Citi Double Cash and the Chase Freedom. These were my first two credit cards, and I still have them today! However, if you are an experienced and responsible credit card user who does not carry a balance and can benefit from redeeming points for travel, read on!

UPDATE (January 2017): The Chase Sapphire Reserve is now offering a 50,000 point sign-up bonus instead of the original 100,000 point promotion. However, it is still the best travel rewards card on the market!

Reserve vs. Preferred Benefits

Most of my friends have the Preferred in their wallets. In fact, at our girls' dinner last weekend, 6 of us pulled out our Preferred cards to split the bill. The waiter got a kick out of it. (Sidenote: Emmer & Rye restaurant in Austin is a MUST). If you also have the Preferred, I recommend upgrading. Let's break down the Reserve (the new one) vs. the Preferred (the old one).

The Reserve carries a $450 annual fee, while the Preferred carries a $95 annual fee. Eek. While the Reserve fee may seem tough to swallow, you make it back quickly through the following:

  • $300 annual travel credit. Chase automatically credits your statement any time you spend money on travel, up to $300 per year. This includes hotels, airfare, cruises, taxis, trains, rental cars, and even Uber and Airbnb! Most of us will use this pretty quickly. The way I see it, this brings the fee down to $150. Pro tip: This travel credit operates on a calendar year basis. So if you plan on getting the Reserve, do it before the end of the year. That way, you'll get $300 before December 31 and another $300 after January 1. If you're having trouble spending $300 on travel before the credit expires, buy airline gift cards! They make the best gifts too, right Mom?
  • 100,000 point sign-up bonus (after spending $4,000 in 3 months). These points are worth a minimum of $1,500 if you use them to book travel through the Chase Ultimate Rewards portal. However, they can be worth over $2,000 if you transfer them to partners like Southwest, United, British Airways, Hyatt, Marriott, Ritz Carlton, and more. Even at the bottom end of the value range, this bonus covers three years of annual fees! To compare, the Preferred card currently offers a 50,000 point bonus.
  • 50% more in travel redemption when booking through Chase Ultimate Rewards. The Chase Ultimate Rewards travel portal favors Reserve points over Preferred points. For example, I could redeem 100,000 Reserve points for a $1,500 flight. But 100,000 Preferred points only gets me a $1,250 flight. Another pro tip: If you have a Freedom or a Preferred, you can transfer those points to the Reserve and earn the higher redemption. If I could only have two cards in my wallet, I would choose the Chase Freedom and the Chase Sapphire Reserve. I would use the Freedom for its 5% cash back categories (these alternate quarterly between groceries, gas, department stores, wholesale clubs, restaurants, and more) and the Reserve for everything else. I would then transfer my Freedom points to the Reserve to take advantage of the higher redemption on that platform. I don't think it makes sense to have the Preferred and the Reserve because there are no complementary benefits; the Reserve is just a better version of the Preferred.
  • 3x points on travel and dining. The Preferred only offers 2x points. Let's put this in perspective. Let's say I spend $10,000 a year on travel and dining. I would earn 30,000 points with the Reserve and 20,000 points with the Preferred. In dollar terms, I would have $450 to spend on the Reserve and $250 on the Preferred (assuming I didn't have a Reserve and couldn't transfer points to leverage the higher redemption).
  • $100 Global Entry fee credit. I talked about the miracle that is Global Entry here. Y'all, this is a no-brainer, especially if you have the credit. It qualifies you for TSA Pre-Check and an expedited customs process if you're traveling internationally. I'm an anxious traveler, and I have to say, this has been the best cure. You can create an account and start the application process here.

The Reserve also offers some less quantifiable perks. These include access to a network of Priority Pass airport lounges, rental car insurance, trip cancellation and delay coverage, access to a concierge who can help you with hard-to-get reservations and tickets, and more. The Points Guy is my favorite credit card blogger, and he has a great post on everything to know about Chase Sapphire Reserve perks here.

Chase Sapphire Reserve
Chase Sapphire Preferred
Chase Freedom | The Best Credit Card for Beginners

Reserve vs. Other Premium Travel Cards

I've spent a lot of time comparing the Reserve to the Preferred, but it truly competes against other cards in the premium travel rewards card category. Most notably, these include the American Express Platinum Card (which I used to book our Mexico vacation) and the Citi Prestige card. These two have to step up their games to compete with the Reserve. In fact, the American Express Platinum card already took the first punch in boosting its return on airfare from 1x to 5x. This is very compelling, but the Reserve still offers 3x on ALL travel (not just airfare) and also on dining, where the Platinum only offers 1x. I also like that I can transfer points to Southwest and United with Chase (I cannot with Amex). The Points Guy has a more comprehensive comparison of the Chase Sapphire Reserve and the Amex Platinum here.

Chase Sapphire Reserve | The Best Credit Cards for Travelers
American Express Platinum Card | The Best Credit Cards for Travelers
Citi Prestige Card

The Bottom Line

The Chase Sapphire Reserve offers great value for someone who is a responsible credit card user, has a solid FICO score, and travels a fair amount. People are really excited about this card, and for good reason. When we were on vacation in Mexico, Chris set his alarm for 7am so he could apply for the Reserve as soon as it launched. While I wasn't pleased that he cut my sleep short, I appreciated the enthusiasm (I taught him well). Chris clearly was not alone. In fact, the card was so popular that Chase ran out of metal cards and had to start issuing plastic! The bottom line is that even with a steep annual fee, the Reserve is a valuable credit card to add to your wallet. I'd love to hear your thoughts! Do any of you have the Reserve? What else is in your wallet?

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