Ms. Tali has gotten some snoozing this morning and woke up wondering if she ought to cut out more expenses in her life. One of the things I am not sure about is whether it is still worth it to keep my very fancy Chase Sapphire Reserve card considering the hefty annual fee of whopping $450! So Ms. Tali, being so savvy at the simple yet powerful google sheets, has whipped up this magical formula for you to also find out if it is still worth it!
After the initial shock and euphoria of having 100,000 points (in this case 50,000 points for people applying now). I believe initially I calculated that these 100,000 points were worth about 3-4 years of annual fees but after that I wasn't sure if the benefits of points from spending alone was worth it to keep the card.
Of course the Sapphire Reserve card is more than just the two factors (points + foreign transaction fee) I calculated on the google sheet. Some of these notable benefits are actually hard to calculate how much value it is worth, and predict whether or not you will be using it for the next year. So I did not include it in my pure and shiny mathematical calculation.
The card reimburses for Global Entry / TSA Precheck which I didn't have for the past 12 months, so this was not taken into consideration. If you want, you can always add $20 (prorated from $100 of 5 years Global Entry) to your saved amount.
Sapphire Reserve also gave you access to Priority Pass which is a lounge access when you are at the airport. I have personally used it when doing international travels and have shitty layovers in Atlanta. This usually cost me $50. Arguably though, Ms. Frugal-hound Tali would not have gone to lounges and spent this $50 had I not have the Priority Pass, so technically this "saving" should not be considered into the calculation.
Sapphire Reserve also has trip insurance, baggage delay insurance, travel incidental and emergency medical coverage. However, I did not consider these as I have never used them in all the years I have this card. Therefore it is sweeped under the "nice to have" category but should not influence my decision.
The simple rationale behind this calculation is that the annual fee for Sapphire Reserve is $450, but right off the bat, there is a $300 travel credit which is automatically applied when you put a charge on the card that constitutes as "travel" for Chase (cha-ching!). So, for the sake of the calculation, my savings needs to be bigger than $150 for it to worth my while.
Like most people, when I applied for the Sapphire Reserve, I had the Sapphire Preferred card which I downgraded it to Freedom Unlimited (no annual fee!). This card gives me 1.5 points on every purchase. Therefore, anything I accidentally put on my Sapphire Reserve card that doesn't give me +3 points is not really a "plus" in my calculation.
Foreign Transaction Fee:
Of course sometimes this is unavoidable when you travel internationally and want to put the charge to this card to avoid foreign transaction fees, which brings me to part two of the calculation: anything I spent outside the country on this card saved 3% of transaction fee.
Here's for the tech / financial savvy and impatient people:
No more reading, and plug your numbers into this Google sheet I made this morning (instead of doing actual work). You can click "make a copy" from the "file" tab and enter your own value.
Here's the step by step for the rest of the world or people who likes to read.
1. Go to your chase sapphire reserve statements (online or on paper) and look for the section where it tells you how many points you've been collecting each month.
2. Enter the "+3 points" numbers (there are two, one for travel and one for dining) and "+1 points" to the Google sheet.
3. Look for any foreign transactions you have had in that month. Add this amount to column E of the sheet.
Usually for me, when I use the Reserve card, I'd choose local currency. I have found that Chase's exchange rate usually comes out ahead than using US dollars at the merchant when you swipe your card.
4. See the result!
I was surprised at the amount of money saved after the annual fee is $300+! Getting charged foreign transaction fees would bother me so much that I would have kept this card even if it was just breaking even with the annual fee. Although, knowing that I have spent this much money just in the past 12 months was also another dose of medicine for me to lower my expenses! I will be re-evaluating my spending again to see what are the essential purchases some other time.
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