I used to recommend the Chase Sapphire Reserve to everyone, but now it really only makes sense for 4 types of users - everyone else should get the Sapphire Preferred

Crystal Cox/Business Insider

There's now a higher threshold for choosing the Reserve over the Preferred.

• One of the most popular rewards cards, the Chase Sapphire Reserve, is getting new benefits like DoorDash credits and 10x points with Lyft. The annual fee is also increasing by $100, to $550.
• You still have time to apply for the Sapphire Reserve and secure the lower $450 annual fee for your first year - make sure you apply by January 12.
• I used to recommend the Chase Sapphire Reserve to everyone, but in light of these changes I think it's really best for a few different types of users.
• If you travel a lot, the card can still be worth it. The new benefits could also make up for the increased annual fee if you use food delivery services like DoorDash and frequently use rideshare apps like Lyft.
• For everyone else, the Chase Sapphire Preferred Card is a better pick, and it still offers great perks.
• Click here to learn more about the Chase Sapphire Reserve »

In the world of rewards credit cards, you can pretty much assume that new perks will come with an increased annual fee. That's certainly the case with the latest update to the ultra-popular Chase Sapphire Reserve: Starting on January 12, 2020, the card will add 10x points on Lyft rides and up to $60 in statement credits for DoorDash delivery this year and in 2021 - and the yearly cost will increase from $450 to $550.

That puts the Chase Sapphire Reserve on par with the Platinum Card® from American Express, which increased its fee to from $450 to $550 in 2017. While I'm happy to pay a high annual fee when a credit card makes it easy to recoup that value in rewards and benefits, I'm starting to worry that this increasing fee trend is reaching perilous heights.

In the past, when friends and family have asked me if the Chase Sapphire Reserve is worth the high annual fee, I've always said yes. The $300 travel credit effectively brought the annual fee down to $150, and the bonus points for travel and dining - plus benefits like Priority Pass airport lounge access - could easily cancel out the rest.

I'll still keep my Chase Sapphire Reserve card because I love earning Chase Ultimate Rewards points for travel and I can get value out of the card's new statement credits, but in light of the higher annual fee, I think the card only makes sense for very specific types of users. For everyone else, the Chase Sapphire Preferred, with a lower annual fee of $95, is a better option.

If the following situations apply to you, the Sapphire Reserve could be well worth the higher annual fee. If not, take a closer look at the Sapphire Preferred - it still earns valuable Chase points and offers many of the same travel protections.

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.

The Chase Sapphire Reserve makes sense if:

You travel - a lot

The Chase Sapphire Reserve has been Business Insider's top travel rewards card pick, but the upcoming changes make it harder to recommend to occasional travelers.

Yes, it offers an amazing 3 points per dollar on travel (and dining) and comes with a $300 annual travel credit that automatically applies for everything from Uber rides to plane tickets. The annual statement credit effectively reduced the $450 annual fee to $150 if you took full advantage, but with the $550 annual fee you'll be looking at an effective fee of $250 after you subtract the $300 credit.

Not everyone spends enough on travel to make up the difference. If you do travel a lot, though, the Chase Sapphire Reserve offers some of the best travel protections around, including trip delay insurance, baggage delay insurance, and trip cancellation insurance.

You use rideshare services

Not everyone uses rideshare services like Lyft - and if you're among those who never need to call a ride, some of Sapphire Reserve's new benefits won't mean much to you.

Starting on January 12, Sapphire Reserve cardmembers can get a complimentary year of Lyft Pink membership, which entitles you to 15% off rides, priority airport pickups, and more. You'll also get 10x points on Lyft rides, which is a fantastic return on spending when you consider that Chase points can be worth about 2 cents each.

Lyft Pink membership costs $19.99 per month, so you're looking at about $240 in value for the free year. But if you won't be taking advantage of any of Lift Pink's benefits, the real value is much closer to $0.

You live in a big city

Another aspect of Lyft Pink membership is that you get up to three 30-minute bike or scooter rides per month, but these are only available in select metropolitan areas.

Bike perks are available in:

• New York City (via CitiBike)
• San Francisco (via Bay Wheels)
• Washington, D.C. (via Capital Bikeshare)

Scooter perks are available in:

• Austin, TX
• Denver, CO
• Los Angeles, CA
• Miami, FL
• Minneapolis, MN
• Oakland, CA
• San Diego, CA
• San Jose, CA
• Washington, D.C.

If you don't live in any of these areas or if you have no interest in bike or scooter rides, the value of this new Sapphire Reserve perk could be quite low.

You frequently order food delivery

Another new Sapphire Reserve benefit will be up to $60 in statement credits for DoorDash purchases in 2020, and up to $60 in credits in 2021. These won't be doled out in monthly allotments like it works with the American Express® Gold Card, so you could even use a year's worth of credits up in one order if you're ordering food for a group.

DoorDash is a food-delivery service like GrubHub and Seamless, and it's available in dozens of cities across the US and Canada. But, again, if this benefit is of no use to you, you're not getting any value in exchange for the higher annual fee.

For everyone else, the Chase Sapphire Preferred is a great pick

Sure, the Chase Sapphire Preferred can't compete with all the Sapphire Reserve's bells and whistles, but if you can't identify with any of the situations above, you probably don't need them.

The Sapphire Preferred has a much lower annual fee ($95), and it still earns bonus points (2x, in this case) on travel and dining. Plus, it even offers a higher sign-up bonus than the Sapphire Reserve: 60,000 Ultimate Rewards points after you spend $4,000 in the first three months, compared to 50,000 points with the same minimum spending requirement on the Reserve.

You'll even earn extra bonus points on Lyft rides with the Sapphire Preferred: 5x points, compared to 10x with the Reserve.

Click here to learn more about the Chase Sapphire Preferred »

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