The Points Guy
When Chase released its popular Sapphire Reserve credit card in 2016, it generated a lot of buzz. With a high sign-up bonus plus an annual $300 travel credit, 3x points on dining and travel, access to Priority Pass airport lounges, and many of the same benefits - in some cases enhanced - as its older sibling, the Chase Sapphire Preferred, the card offered more than enough value to make up for its hefty $450 annual fee.
That fee, however, is still a lot of money to have to pay up front. Plus, while the Reserve is excellent, the older Sapphire Preferred is still a useful card with rich rewards and valuable benefits. In fact, there are a few reasons you may want to consider signing up for that older card, the Sapphire Preferred, instead.
Read on to see reasons that you may want to go for the Sapphire Preferred instead of the Reserve.
Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
1. The Sapphire Preferred has a (much) lower annual fee
I often argue that the Reserve's $450 annual fee is actually just $150. That's because each card-member year with the Reserve, you'll get up to $300 of statement credits on travel purchases. In other words, the first $300 of travel purchases you make, whether one big purchase or a lot of smaller ones, will be canceled out by the credits. It's basically a rebate of $300 of the annual fee.
Still, $150 is still a decent bit of money. And though you'll get value back in the form of travel statement credits, you'll still need to pay $450 for the fee on your first statement, and not everyone has that amount of cash to float or is willing to put up that much.
The Sapphire Preferred, on the other hand, has an annual fee of $95, a relatively standard fee for a rewards card.
Looking at the fees over the first 24 months makes the differences even clearer - you'll pay $900 for the Sapphire Reserve (with up to $600 in statement credits) compared with just $190 for the Sapphire Preferred.
2. The Sapphire Preferred has a higher sign-up bonus
Though the Sapphire Preferred has a much lower annual fee, it actually offers a higher sign-up bonus than the Sapphire Reserve - 60,000 points after spending $4,000 in the first three months. When you have the Sapphire Preferred, that's worth $600 as cash, $750 as travel booked through Chase, and potentially even more when you transfer those points to a hotel or frequent-flyer partner.
For comparison, the Sapphire Reserve offers 50,000 points when you meet the same spending threshold.
3. The Sapphire Preferred has fewer perks than the Reserve but offers many of the same crucial benefits
The Sapphire Preferred doesn't come with the more premium Reserve's airport-lounge access, concierge service, or a credit to cover the cost of enrolling in Global Entry/TSA PreCheck, but other than that the two cards have almost the same benefits - that's impressive, considering the Preferred's much lower fee.
Both cards offer trip-delay insurance. If you're traveling by common carrier - airplane, train, ferry, bus, and similar public forms of transportation - and your trip is delayed, you can be covered for up to $500 of expenses, including a change of clothes, hotel room, toiletries, and meals. Both cards' trip-delay insurance kicks in when the delay forces an overnight stay, or, if you aren't stuck overnight, the Preferred's coverage kicks in after 12 hours, and the Reserve's after six hours.
Similarly, both cards offer primary rental-car damage/loss coverage, trip cancellation/delay insurance, lost-luggage insurance, and various purchase protections. There are minor differences in some of those benefits between the cards, but for most instances, they're effectively identical.
4. You'll still earn bonus points on dining and travel with the Preferred
There's no question that the Sapphire Reserve's 3x points on dining and travel makes it easy to earn points quickly. But you'll still earn bonus points on the same categories with the Sapphire Preferred, even though they won't add quite up as fast. For every dollar you spend on dining and travel, you'll earn 2 points, and 1 point per dollar on everything else.
These categories are particularly useful because of how broadly they're defined. Dining includes restaurants, bars, cafes, bakeries, ice-cream shops, fast-food stands, brewery tap rooms, and delivery services like Seamless and Grubhub.
Travel, similarly, includes just about everything, big or small. You'll earn 2x points on taxis, Uber/Lyft rides, subways, commuter trains, parking, tolls, rental cars, airfare, hotels, cruises, and tours.
5. The Chase Sapphire Preferred has access to the same great transfer partners as the Reserve - and offers similar flexible ways to redeem points
As with the Sapphire Reserve, Ultimate Rewards points earned with the Sapphire Preferred can be exchanged for cash back, with each point worth $0.01, or points can be used to purchase travel through Chase. When you do that, you'll get a 25% bonus, effectively making your points worth $0.0125 each (the Sapphire Reserve offers a 50% bonus, making points used to purchase travel through Chase worth $0.015 instead).
Much more value could be gleaned from points, however, by transferring them to one of Chase's nine partnering airline frequent-flyer programs or three hotel loyalty programs. The two cards have access to the same transfer partners.
While this is more complicated, you can generally get more value by booking frequent-flyer award tickets than you can by using your points as cash or through Chase. You can even book flights in business or first class for fewer points than it would cost if you used them as cash or through Chase's website to buy the flights. For example, my wife and I used the points from our Sapphire Preferred cards to fly to Japan in first class for our honeymoon.
6. The card doesn't charge a fee for authorized users
If you're planning to add a partner, a child, a friend, or anyone else as an authorized user on your account, you may be better off with the Sapphire Preferred. That's because you can add as many users as you want to your account free. The Sapphire Reserve, on the other hand, charges $75 for each user you add. Those users will get access to Priority Pass airport lounges, at least.
7. It's easier to get approved for the Sapphire Preferred
While there's no official publicly available formula for how banks approve credit cards, common knowledge is that the Sapphire Reserve - which is a Visa Infinite card, requiring a minimum credit limit of $10,000 - has higher standards for approval than the Sapphire Preferred - a less-exclusive Visa Signature card. You'll still need a solid credit score for the Preferred, but you have better odds of getting approved if you have a shorter credit history.
The bottom line
Regardless of which card you choose, both offer class-leading value.
Though the Sapphire Reserve is an excellent card - and I personally went with the Reserve over the Preferred - the annual fee is a lot to stomach. Depending on your cash flow, how you budget, or how you view these benefits and rewards, the Sapphire Preferred may be a better option for you.
Remember that you can always upgrade to the Reserve from the Sapphire Preferred after your first year if you want to start with the Preferred and see how many of its benefits you actually use. That way, you get the higher 60,000-point sign-up bonus, and get to ease your way in before deciding to pay a higher annual fee.
Finally, don't forget to also check out the reasons you may want to consider the Reserve over the Preferred, instead, as well as our in-depth comparison of the Chase Sapphire Preferred and Chase Sapphire Reserve's benefits.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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