When you’re browsing for a new credit card there a lot of things that need to be taken into consideration. A credit card not only continues to help you build your credit rating, it offers you buying power that comes at a cost. Most of us are looking for the best possible deal to obtain credit for the smallest possible cost out of pocket. There are a variety of credit cards that offer great promotional deals which can not only make it worth the cost of the credit, but they also provide you with rewards that far exceed the amount you end up paying in fees and APRs. Chase offers two amazing credit cards we think are well worth their cost. The Chase Sapphire Reserve vs Preferred cards are two that we think are exceptional for certain lifestyles. Here is our comparison that might help you find one to be more beneficial over the other.
Which is the best?
This depends upon your definition of best and what you want to get from the credit card. Our comparison of the Chase Sapphire Reserve and Chase Sapphire Preferred cards takes into consideration several factors which may or may not apply to your lifestyle. First, we’re going to look at how they stack up in terms of their introductory offers. We also detail and compare the APR, fees and all associated costs of having each card. We also look at their rewards programs. To answer the question of which card is the best, it is a simple matter of which card fits in with your credit card needs, the kind of rewards that would have meaning for you and are applicable and the card that offers the most advantages for you, with the fewest drawbacks. For example, a card that gives you travel benefits and you never travel, is not even a good choice for you. The Reserve card is meant for people who do a lot of traveling, dining out and staying i n hotels, while the Preferred has other benefits not related to travel.
The initial bonus programs
Most credit cards give you a bonus just for signing up if you meet certain requirements, and the Reserve and Preferred are no exceptions, but their programs are different. The Chase Sapphire Reserve initial bonus program gives you the opportunity to earn 50,000 bonus points if you spend a minimum of $4000 with the card within the first three months after the day that the account is opened. While this is a great chance to earn money saving points, the Chase Sapphire Preferred card offers you the same deal, only the bonus points you can earn for spending $4,000 within the first three months is 60,000. You may redeem either of these for $750 if you use them for eligible travel spending, or you an take the cash back option. If you do this, then the Reserve points are only worth $500 while the Sapphire Preferred Bounty cash back value is $600.
If you go by the value of the cash back option on points redemption for the introductory offer, the Preferred card is the winner. If you’d rather have the $750 to apply towards travel, it’s a tie.
Comparison of the Fees
Both cards charge an annual fee. The Chase Sapphire Preferred is $95 per year while the Chase Sapphire Reserve fee is $450 per year. The Reserve is considered to be a luxury credit card and while the fee may seem very high at first glance, as it turns out, the Reserve card is actually an amazing deal for frequent travelers because the rewards make up for the annual fee expense. The kicker here is you have to spend enough on travel with the card to truly make it worth your while.
The Chase Sapphire Preferred Card charges fees that are more than 4 times more than the Preferred card. If you are looking for a card that is geared towards serious savings for the things frequent travelers use, such as travel, hotels and restaurants, then the Chase Sapphire Reserve card with its higher annual fee is the best card. If you don’t travel much then the Chase Sapphire Preferred card is your best choice because you must be a frequent traveler to truly reap the benefits of the Reserve card.
Purchase protection and travel insurance
Another factor that we consider are the perks that come with the card, such as travel insurance and purchase protection. Many cardholders don’t think about these benefits unless they need them and when that time comes, you want a card that will help you out in a pinch. We discovered that the Sapphire Reserve card offers coverage with fewer restrictions when it comes to free roadside assistance, car rental insurance, travel accident insurance, trip cancellation insurance and purchase protection. For example, the Preferred card pays up to $500,000 for common carrier loss of life benefit and the Reserve card pays $1 million. When it comes to purchase protection, the Preferred pays up to $500 per claim and up to $50,000 per account while the Reserve card pays up to $10,000 per claim and up to $50,000 per year ongoing as long as your account is in good standing. This is a significant difference and it can matter if trouble strikes.
When considering the level of purchase protection and travel service alone, the Chase Sapphire Reserve is the best choice. The Preferred version of the card, does however, offer reduced benefits which are still good, it’s just that the Reserve’s benefits are excellent.
Extra features of the Chase Sapphire Reserve
The Chase Sapphire Reserve credit card has all of the benefits of the Chase Sapphire Preferred, plus a few extras, which certain cardholders would benefit from greatly. One of them is an annual travel credit in the amount of $300. This is a big plus for frequent travelers and it compensates for $300 of the annual fee of $450 charged for the card, taking it down to more like $150, but that’s not all that it does. It also gives you some convenience features that are well worth the $150 per year, which is only $55 more than the Preferred. The Reserve card gives you 3x points earning on dining and travel, whereas the Preferred only gives you 2x the points earnings for this type of spending. The Reserve card also gives you elite benefits with some car rental agencies, shorter delay requirements for trip delay insurance to kick in and the Priority Pass network for gaining access to select airport lounges. In addition, when you redeem your points for travel purchases through Chase, you get a bonus of 50 percent instead of the 30 percent offered through the Preferred card.
Balance Transfer and APR on purchases
Another consideration to make is how much each card is going to cost you on any balance transfers and or the account balance that you carry from purchases. The Preferred card has a variable annual percentage rate of between 18.24 percent to 25.24 percent for balance transfers and purchases. The Reserve card is also a variable rate and it lands between 19.24 percent and 26.24 percent. When it comes to the overall APR, the Preferred card has the lower rates over the Reserve. These figures are dependent upon the credit worthiness of the individual and the Prime Rate.
When it comes to balance transfer and the annual percentage rating for the Chase Sapphire Reserve and Preferred cards, they’re running fairly close, but the Preferred card comes out at an average of one percentage point less than the Reserve card. We have to proclaim that the Preferred card is the winner by a nose on this rating factor.
Pros and Cons for each card
As with any credit card, there are advantages and disadvantages. The Reserve and Preferred each have their pluses and minuses and before you decide which is the best option for you, it’s important to think about how the benefits associated with these cards may or may not apply to your lifestyle.
- Benefits of the Preferred card – With the Chase Sapphire Preferred card you get the benefit of 2 points for every $2 spent with the card on restaurants and travel and 1 point for every $1 spent with the card on other eligible purchases with a sign up bonus of 60,000 bonus points when you spend $4,000 within the first 3 months of the date of the account opening. The annual fee is lower at $95, and the potential for receiving $750 in travel discounts when using bonus points or cash redemption of $600. Even if you’re not a frequent traveler, the rewards for travel and dining are good and the pints can be redeemed in multiple ways. There is no fee to add an authorized user to the account.
- Cons of the Preferred card – The disadvantages of the Preferred card over the Reserve card are that the reward rates are lower on purchases, there is no lounge access and the insurance coverages are less advantageous when compared to the Reserve card.
- Who would benefit the most from the Preferred over the Reserve? – The Chase Sapphire Preferred card is the better choice for anyone who does some traveling, stays at hotels and eats out at restaurants because although the rewards are not as high for the Preferred card, they are still good and the annual fee is $95 versus $450
Benefits of the Reserve card
The Chase Sapphire Reserve card offers the same end result for its initial sign up bonus program with $750 in travel reward discounts. The travel and purchase insurance offers much better coverage, and the points rewards are higher for travel and restaurant purchases with 3 points for every $1 spent with the card. There is also a $300 annual travel credit that helps to alleviate the annual fee of $450.
- Cons of the Reserve card – The largest drawback associated with the Reserve card is the $450 annual fee. If you participate in rewards program and are a frequent traveler, then this card can be well worth the charges, but if you don’t spend enough to qualify for the bonus credits, the Preferred version of the Chase Sapphire credit card is the one that would best suit your needs.
Determining which card is the best choice
After reviewing the specifics of what each of these two credit cards have to offer, along with the benefits and the drawbacks, it becomes easier to decide which one truly is the best. Both the Chase Sapphire Reserve and Preferred credit cards are amazing resources for earning bonus points if you do any amount of regular traveling, but they are designed to fulfill very different needs. The Reserve card truly is the best card for those who travel frequently and could use the extra benefits and perks that the card affords to those who spend a lot of money on travel and associated expenses.
The Chase Sapphire credit cards come in a choice of 2 rewards options. While the Reserve card requires a much higher annual fee, there are so many perks and benefits for the serious traveler that it’s a good choice. If you’re an occasional traveler, but you don’t really spend a lot on travel or eating out, then the Reserve card may not be best option for you. The Preferred card is more for the casual traveler and it outshines the reserve in the cash back option, and it still offers some great rewards for travel, dining and a standard 1:1 ratio on all other purchases. It’s nice to have choices and the Chase Sapphire credit cards have a lot to offer for frequent and casual travelers.