My Chase Sapphire Reserve annual fee posted in December and was time to evaluate whether I should cancel the card. Whether to cancel the Chase Sapphire Reserve ultimately came down to the question of if I was getting value in excess of the card’s $550 annual fee.
I typically will start looking at whether to cancel a card before my annual fee hits, but I knew that I could make this call in January. Chase lets you cancel a card and refund the annual fee if you call within 30 days of the annual fee posting.
Ultimately I decided to cancel my Chase Sapphire Reserve. Here’s how I thought through that decision.
How much value was I getting from the Chase Sapphire Reserve?
I posted yesterday about how I look at the value of my credit card benefits. Given that the annual fee of the Chase Sapphire Reserve card is $550, I needed to find at least that much value in the card if I was going to keep it.
Here is my calculation of the value I was receiving from the Chase Sapphire Reserve benefits. If you read my post yesterday, this table will look very familiar.
|Benefit Category||Amount||Multiplier/Reduction||My valuation|
|Credits – cash-like||$300 – Annual travel credit||80%||$240|
|Credits – restricted||$0||50%||$0|
|Lounge access||$0||0% – I have Priority Pass lounge access from several other cards||$0|
For me, the biggest benefit of holding a Chase Sapphire Reserve was the annual $300 travel credit. This credit is easily usable because it applies to a wide array of travel purchases and it is easy to use. You just have to charge travel expenses to your card. If you haven’t used up your travel credit for the year, those charges are reimbursed automatically.
Beyond that credit, I didn’t see that much value in the card. The other statement credits that the card offers weren’t valuable to me and my analysis of the rewards I earned on the card showed me that I could have earned equivalent rewards on one of my other cards.
Benefits I valued at $0 and why
Here is a list of the benefits that I considered, but ultimately decided to value at $0 when deciding whether to cancel my Chase Sapphire Reserve:
- 3x points on travel. I can get 3x points on travel on several other credit cards, so there isn’t any marginal value here.
- 3x points on dining. Like travel, I have several cards that give me similar rewards on dining.
- Free Lyft Pink. I never activated this benefit and I don’t use ridesharing services often enough to bother.
- DoorDash and Caviar benefits. I have never used DoorDash.
- Instacart benefits. I live three minutes away from a Target, two Aldis and a Cub Foods. Grocery delivery holds very limited value to me.
- Global Entry/TSA PreCheck/Nexus fee credit. I am happy to pay $100 every five years for my Global Entry membership, so getting that reimbursed has value for me. But I have that same benefit on so many cards that it doesn’t factor into my value calculation.
- Priority Pass Select membership. I have Priority Pass membership through several other credit cards. An additional Priority Pass membership doesn’t really get me anything. Sure, I’m giving up one of the few Priority Pass membership benefits that still offers restaurant credits at airport, but I haven’t used that in the past year.
- All of the travel insurances. Most of these coverages are also available on my go-to travel credit card, the Venture X. I’ll miss out on the baggage delay insurance I guess, but I’ve never used that coverage.
- Roadside assistance. The Chase Sapphire Reserve is one of the few cards that offers a roadside assistance benefit that pays for services, but I have better roadside assistance coverage through my car insurance company.
- Return protection, extended warranty protection, and purchase protection. These benefits are very useful, but I typically use an American Express card for extended warranty protection.
The benefit I will miss – Transferable points
By closing my Sapphire Reserve card, I will be giving up the ability to transfer Ultimate Rewards points to transfer partners. This is probably the biggest emotional hurdle I had to closing the card. Transfers to travel partners are the best way to increase the value of your Ultimate Rewards beyond their cash value. Losing the ability to transfer Ultimate Rewards would hurt… or would it?
In the last few years, when I have redeemed miles and points for travel, I have redeemed most of my miles through Avianca LifeMiles and Flying Blue. Of these two, only Flying Blue is a transfer partner with Chase and they happen to be transfer partners with, well, everybody. So, even if I close my Chase card, I can transfer points to Flying Blue from Citibank, American Express, and Capital One. Yes, I did a few hotel redemptions with Hyatt, but nothing that provided outsized value.
Even if I find that I really miss transferring Ultimate Rewards, I can always get another premium Ultimate Rewards card. In fact, I am also eligible to earn a new welcome bonus on the Chase Sapphire Preferred or Chase Sapphire Reserve cards in February and I’m currently under 5/24… so I really am not giving up anything.
Preparing for my cancelation call
Once I had decided to cancel my Chase Sapphire Reserve, I needed to do a little bit of work to prepare to cancel the card:
Double-check my travel credit. It would be a shame to cancel the card and leave $300 of travel expenses on the table, so I double-checked to see that I had redeemed my annual travel credits before making the call to cancel my Chase Sapphire Reserve. I had used my travel credit in September, so we were good.
Redeeming points. In many cases, you lose your ability to redeem points immediately when you cancel a card. Since I was ready to cancel my Chase Sapphire Reserve card, I wanted to make sure that my point balance was 0 before I called. I went on the Chase website and made one final transfer to Hyatt and then transferred my remaining points to my Chase Freedom card.
When you cancel some credit cards, you may immediately lose the ability to redeem your rewards. Be sure to redeem your rewards before calling to cancel a card.
Retention offer research. Sometimes credit card issuers offer retention bonuses to cardmembers looking to cancel in order to entice them into keeping my account open. I find it useful to have some idea of what to expect before calling to cancel a card. This FlyerTalk thread seemed to indicate that Chase isn’t giving out too many retention offers these days. Bummer.
My call to cancel the card
When I called to cancel my Chase Sapphire Reserve card, I asked to speak to a representative.
If you are calling to cancel a credit card, always speak with a representative and see if you can get a retention offer on your card. If you request a card cancelation through an automated system, your card cancelation request might be processed without a chance to speak to a representative.
I told the representative that I had taken a look at the value I was getting from the card. I said that I was planning on canceling the card and asked her to look to see if there were any retention bonuses available on my account. If I had received a retention offer that turned my value calculation positive, I would have taken it and kept the card open. I didn’t receive a retention offer on my card.
Once I found that there was no retention offer on my card, I asked if I could convert the card to a card with no annual fee. The representative gave me the option to convert my card to one of the following:
- Chase Sapphire Preferred ($95 annual fee)
- Chase Freedom Unlimited (no annual fee)
- Chase Sapphire (no annual fee)
I chose to convert my card to the Chase Sapphire, a no-annual fee card that isn’t available to new cardmembers. I want the opportunity to get the excellent welcome bonus on the Chase Freedom cards, so that’s a no-go for me. And I wanted a card with no annual fee.
That’s it. My Chase Sapphire Reserve is canceled.
So, I’m no longer a Chase Sapphire Reserve and in fact I currently hold no premium credit cards with Chase. Ultimately, my decision to cancel my Chase Sapphire Reserve came down to a value calculation. I was not getting enough value from the card to justify its annual fee.
That’s not to say that the card won’t have value for you or that it isn’t a good card. In fact, its first year welcome bonus currently puts it on our list of the best credit card welcome bonuses. But if you are paying an annual fee on a credit card, it is a good idea to reevaluate the card every year and make sure that you are getting value in excess of the annual fee.