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Probably the hottest and most-talked about credit card the last year has been the Chase Sapphire Reserve and it has taken the credit card scene by storm. Perhaps a perfect storm as other premium credit cards cut benefits shortly before Chase rolled out the Chase Sapphire Reserve. The Chase Sapphire Reserve is considered by many to be one of the top rewards cards ever and has piqued the interest of many Millennials. A generation that, in general, has shunned credit cards of any variety. The Chase Sapphire Reserve has been so popular that Chase even ran out of metal credit cards!
The Millennial buzz for the Chase Sapphire Reserve is very surprising because Millennials trail Gen Xers and Baby Boomers in credit card ownership. Approximately 25% of Millennials own at least one credit, while at least 65% of adults aged 30 own a credit card. While the oldest Millennials (those born in 1980 of after) are part of that latter statistic, Millennials as a whole have fewer credit cards than their parents did at the same age. So, credit card companies have been trying to find a way to crack into the Millennial marketplace.
The Chase Sapphire Reserve has been one of the financial products that went “viral” among Millennials with good credit scores. It’s suddenly become cool to pay with plastic of the credit variety instead of a debit card. This buzz is one reason that Chase received 100,000+ applications, their quota for the entire year, within the first two weeks of the Reserve’s introduction.
Awesome Reason #1: 100,000 point sign-up bonus (Expired – now 50k points)
The biggest reason most Millennials want the Chase Sapphire Reserve is for the sign-up bonus of 100,000 Chase Ultimate Rewards points. When redeemed for travel using the Chase Ultimate Rewards portal, they are worth 1.5 cents apiece. For the big picture folks, that’s $1,500 that can be used for plane tickets, rental cars, cruises, hotels, etc. Even if you subtract the $450 annual fee (not waived the 1st year) from the bonus, it’s still $1,050 in travel credits.
For many, it’s probably the same feeling of being able to buy spring break airline tickets with a student discount as a college student to get away to Europe or Florida for one last hurrah before having to get a “real job.” The $4,000 spending minimum within three months to receive the bonus might be a little steep for some Millennials & Gen Xers to swallow, it’s not every day that a credit card bonus can pay for one or two trips to anywhere in the world.
Awesome Reason #2: $130 Annual Fee
The advertised annual fee for the Chase Sapphire Reserve is $450. But, this is card more affordable than many people realize once they look beneath the surface. With an annual $300 travel credit and a Global Entry application credit ($100 every five years), the fee drops to $50. Of course, you need to “opt-in” and exert a little effort to utilize the credits, but the recurring $300 travel credit is the primary reason (for many) to go with the Sapphire Reserve. If you don’t want to mess with a high annual fee at all you can go with the stellar Chase Sapphire Preferred® Card.
The $300 annual travel credit is the most valuable and flexible credit among the premium travel rewards cards. It can be used to reimburse the purchase of airline tickets, hotel stays, or rental cars. Many other programs only reimburse airline-related expenses. For instance, the credit can allow you to travel for free or for very little if you do not want to burn any points on your first trip for the year. The credit can also be helpful if you are using a carrier that you do not have enough loyalty points with to score a free ticket or hotel stay!
Regarding the $100 Global Entry or TSA Precheck fee reimbursement, this is another perk that is optional. The “Big 3” premium travel cards (Amex Platinum, Citi Prestige, and Chase Sapphire Reserve), all offer this benefit and it is a great way to justify paying the $100 for Global Entry (Passport required) or $85 TSA Precheck fee (no passport but only valid for domestic flights) are the secret to being allowed to get into the short line when checking-in at the airport or passing through customs. Chase reimburses the fee as a one-time statement credit, instead of $20 each year, so cardholders will need to make a mental note to remember that the annual fee reduction was prepaid.
Awesome Reason #3: Travel Benefits on the Chase Sapphire Reserve
Millennials have the world at their fingertips and can travel to more places today for a fraction of the cost that their parents might have paid. Of course, the Cold War was still ongoing and the Berlin Wall still stood when their parents were the same age, so travel options were much more limited. In addition to the $300 annual travel credit & $100 Global Entry credit, the Chase Sapphire Reserve has lots of other benefits that you simply cannot get with travel credit cards with annual fees of $100 or less.
Priority Pass Select Airport Lounge Access
While waiting for a connection flight on the quest to go around the world, it’s possible to relax and unwind at one of the 900+ Priority Pass lounges located across the globe. This might not benefit every traveler, but, they are a nice respite when the opportunity arises.
Rental Car CDW Coverage
Booking a rental car just got cheaper as the Sapphire Reserve allows you to waive the expensive Collision Damage policy that can substantially raise the price quote. If the unfortunate does happen, Chase will reimburse up to $75,000 in damages related to theft or collision. Another sweet perk is complimentary roadside assistance that can help you with a flat tire or give your personal car or rental car a tow if your vehicle breaks down.
Complimentary Rental Car Upgrades
By booking a rental car with the Sapphire Reserve, it’s possible to get a complimentary upgrade through Avis, National, or SilverCar in addition to earning travel purchase rewards.
You can save some additional money with the Sapphire Reserve if you normally like the buy the add-on travel insurance coverage offered by airlines as you complete the ticket reservation process. You won’t get “Cancel for any reason” coverage, but, you can receive aid if your trip or baggage is delayed at least 6 hours and trip cancellation/interruption insurance (up to $10,000) if your travel itinerary is affected by sickness, weather, or other qualifiable causes.
Awesome Reason #4: Chase Ultimate Reward Points
One final reason Millennials have been excited about the Chase Sapphire Reserve is because it maximizes the value of Chase Ultimate Reward Points, often considered the best credit cards reward points available. In addition to being worth 1.5 cents when redeemed for travel rewards using the Chase travel portal, they can also be transferred on a 1:1 basis to many leading airline and hotel partners. As a result, you might be able to make the points worth more than 1.5 cents each by redeeming directly through the airline or hotel carrier instead of the Chase portal.
It’s also easy to earn Chase Ultimate Rewards points as you earn 3 points per $1 spend on travel and restaurant purchases, plus 1 point on all other purchases. As the primary intent of this car is to earn & burn travel rewards, this credit card rewards travel purchases the most among the many non-branded travel credit cards.
Conclusion on the Chase Sapphire Reserve
Millennials are ecstatic about the Chase Sapphire Reserve because it offers so much for $450 a year. It has outdone the other premium travel card in almost every comparative measure. The sign-up bonus might be the main reason that many have been salivating to use Sapphire Reserve, but, for Millennials that visit airport lounges or rent cars each time they fly, the additional cardholder benefits make it easy to offset the remaining $130 of the annual fee once you factor the travel & Global Entry credits.
Everybody is curious what Chase will do next or how others can steal the buzz from Chase and the Sapphire Reserve. It will be a tough task as the Chase Sapphire Reserve just became the “Gold Standard” among premium travel credit cards. You could also argue that it’s former flagship, the Chase Sapphire Preferred, is the best ~$100 annual fee travel rewards card. In essence, Chase built upon a firm foundation with the Chase Sapphire Reserve and the Millennial enthusiasm is valid.
EDIT: The Sapphire Reserve has a 50k sign-up bonus now, which makes the Chase Sapphire Preferred® Card the best personal card to earn Ultimate Rewards.
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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.