What to Do Before Canceling Your Chase Sapphire Reserve Card

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Getting new rewards credit cards is way more fun than closing them down, but you need to be prepared to handle both sides of the equation in this hobby. Some credit cards may be the perfect match when you get them, but eventually may not suit your needs enough to warrant paying the annual fee. Some cards you may have applied for because of the valuable sign-up bonuses, never really intending to keep them beyond a year. I don’t recommend hauling through rewards credit cards like a toddler turned loose on a bag of Goldfish, but you also don’t have to keep every single credit card you open forever and ever.

Deciding to cancel the Chase Sapphire Reserve

This one year and then out strategy has been the plan from the beginning for my dad’s Chase Sapphire Reserve. He got the card last year towards the end of the 100,000 point sign-up bonus offer. That was a tremendous bonus worth at least $1,500 towards travel, and on top of that, the card awarded him a $300 travel credit in 2017 and then again in 2018. They have since changed how the Sapphire Reserve travel credit works so that it is awarded once per cardmember year for those who applied on May 22, 2017, or after. Since he got the card before that date, he got $600 in travel credits in his first 12 months of having the card.

In the first year, he paid the big $450 annual fee just like everyone else, but that sort of fee is just not a good fit for him long term. If you knew my dad, and maybe you do somewhat through the Grandpa Points posts he shares here occasionally, you would know that it is almost unbelievable that he ever got a credit card with a $450 annual fee. To give context, he is the kind of guy who flies Spirit Airlines and doesn’t pay for any of the ancillary fees for bags, seat assignments, or onboard drinks. He will pack for a ski trip in a backpack to avoid the fee. He doesn’t have a cell phone, he has driven the same car since I was in the 8th grade (I’m now 37 years old), and for the longest time he wouldn’t spend the extra $1 per month to make his office phone touchtone instead of rotary…you know where you push a seven and wait for it to go da-da-da-da-da-da-da.

He’s not a cheapskate by any stretch, he just isn’t going to frivolously spend money in most areas of life, and lots of things that bother those who are always in a hurry don’t really bother him. However, a $95 annual fee for a credit card is a big deal in his world, and a $450 annual fee is almost incomprehensible. He understood and agreed with the math on getting the Sapphire Reserve the first year, and but no amount of Priority Pass visits, Global Entry reimbursements, or 3x points on his weekly $12 meal at Jason’s Deli are going to justify keeping this card beyond the first year.

Check out this post if you are still deciding whether or not to keep your Sapphire Reserve

Spend the $300 Annual Travel Credit

Before we close his Chase Sapphire Reserve card we have some housekeeping to do in order to not let anything go to waste. First, we checked the math on the travel credit to be sure he has used it up for the year. There wasn’t a ton of time from when his December statement closed and the $300 annual travel credit reset until we are going to close the card, but there was enough time for him to book a few things for an upcoming Vegas trip. We kept an eye on the credit, and it indeed all posted as statement credits offsetting some travel charges.

While we are on the topic of credits provided by the Sapphire Reserve, if you need to apply for or renew your Global Entry in the near future, of course, you could use the Sapphire Reserve to pay for that before you cancel and have the $100 application covered. This is assuming you haven’t already used that benefit on the card since it is only valid once every four years.

Use what you can, transfer the rest

In terms of the points attached to your Sapphire Reserve, you can use them up to book travel at 1.5 cents per point through the Chase Travel site, transfer them to another Ultimate Rewards credit card if you have one, transfer them to an Ultimate Rewards hotel or airline partner such as United or Hyatt, or even transfer them to another household member who also has an Ultimate Rewards card. Be aware if you transfer them to a hotel or airline partner that they will now fall under the expiration rules of that program. In other words, don’t just transfer them somewhere and forget about them for years on end.

Whatever you do, don’t just let these valuable points go to waste just because you want to close your card. Move them out of your Ultimate Rewards account before you close your card. Alternatively, perhaps you shouldn’t close your Sapphire Reserve at all and should instead…

Don’t cancel, just downgrade

One way to keep the points safe, in a sense, is to not cancel your Sapphire Reserve at all, but instead just ask Chase to downgrade it to a no annual fee card such as one of the Freedom cards. You could then keep your points and account history, though remember with the Freedom, the points are worth less towards travel (1 cent each instead of 1.5 cents) and you can’t transfer them to the hotel and airline partners without also having a premium Ultimate Rewards credit card.

Still, this downgrade strategy would keep your points safe until one day when you again get a premium Ultimate Rewards card such as the Sapphire Preferred or Ink Business Preferred. Downgrading is also a good way to potentially get a card like the no annual fee Chase Freedom that perhaps you wanted for the rotating 5x categories, but that you wouldn’t necessarily normally spend a whole new card application to obtain.

Don’t wait too long

If you do want to cancel your Chase Sapphire Reserve to avoid paying the $450 fee for yet another year, don’t wait too long to do it once the renewal fee posts to your account. Chase has a policy where they will refund the fee off of the account if you cancel within 30 days of the fee posting, but don’t accidentally wait longer than that.

As far as my dad goes, we plan to close down the card in a couple weeks after his next trip is over. I’ll give him the option to downgrade to a no annual fee Chase card, but he doesn’t have a complicated credit card strategy, so it won’t make a huge difference one way or another if he downgrades or cancels. We have a plan to use up some of his Ultimate Reward points to book flights for planned 2018 trips at 1.5 cents per point and then move the remaining points into his United and Hyatt accounts. We know he will put those points to good use for planned trips over the next couple of years. His Ultimate Rewards balance isn’t so huge that we need to move points to my mom’s Sapphire Preferred since we have plans to use all of his points in one way or another.

When all is said and done, he will have gotten more than $2,000 in travel benefits from a credit card that he paid a $450 annual fee to obtain. I’d call that a big win, even if it is still a bit shocking that he ever had a $450 annual fee credit card to begin with!

What’s your plan going forward with your Sapphire Reserve? Are you keeping it like me or closing it out like my dad?

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Comments

  1. I’m definitely keeping mine. It’s not really a $450 annual fee card. You did mention the annual $300 travel reimbursement credit but you didn’t really mention that it really makes it a $150/year annual card. You far exceed $150 in value. Even your cheapskate father probably buys electronics, travels once in a while, rents a car, buys electronics, etc. that would make this card worth it.

    I don’t blame your dad for cancelling but it really only comes out to $150/year. I don’t know anyone that doesn’t at least have $300/year in travel charges. No matter how cheap they are.

    • Matt, this is not true for the second year of the card for those that applied for the card prior to the change in benefits for the $300 credit. For those that received the $300 travel credit twice within a 12-month period only having to pay the annual fee of $450 once, then the second year ‘cost’ of the card is the full $450 because you could have cancelled and still received the $300 credit anyway.

    • Downgrading makes better sense not just for the more generous annual fee refund policy. It’s also credit score neutral (canceling could hurt your score). In addition, with all the approval rules like 5/24 and the new 1-Sapphire product rule, it’s good to keep your Chase cards active. This gives you the flexibility to product change to a card you might not be able to get otherwise.

    • Yes, my understanding is that product changes do have a longer period of time (60 days) for the fee to be converted. I just don’t have as many data points on that.

  2. I’m on the fence. I had a Sapphire Preferred before I got the Sapphire Reserve. I ended up downgrading the Preferred to the Freedom Unlimited (already had the freedom). Is it possible to downgrade the Reserve to the Preferred?

    I have no issues spending the travel credit – it goes to my time share dues, so really it’s a $55 difference between the two cards. Just not sure if the benefits of the Reserve are worth the $55 difference over the Preferred.

  3. I’m keeping my Sapphire Reserve. I travel enough to get the full annual $300 credit, which reduces the annual fee to $150. I transfer enough points to get well over $150 in value.

  4. We cancelled ours, but we moved our points and used the travel credit before doing so. In case this is of interest to anyone, I made an activity booking on Expedia to use up our travel credit as we don’t have any trips planned until spring break. It coded as travel, so the travel credit posted simultaneously. Then I realized I’d booked the wrong activity so I cancelled it (it was a free cancellation activity booking). Expedia refunded my money but the travel credit was not reversed. For some crazy reason I pointed this out to Chase, and they confirmed they couldn’t reverse the travel credit and it would just remain as a credit on my current statement that I could use for future purchases.

  5. I appreciate the discussion on the value of the benefits on the CSR. I believe there is a misconception that the $300 travel credit reduces the AF expense from $450 to $150 or the $100 Global Entry credit reduces it even further. If you do the math correctly however, you will see that the hard dollar credits do not reduce the AF. Only the value of the points converted to dollars & cents can do that or the value you place on the lounge access, rental car CDW, etc. A credit is the return of costs incurred. There are no credits for the $450 AF. NONE! There are only credits identified as travel credit and GE credit. You have to spend $300 to get $300 back. Same math for GE. Does that mean cancel the CSR, of course not. Just determine if you spend enough and accrue enough points, rent cars, and visit enough lounges. That’s the math for the $450 AF. Would be great to hear everyone’s take on this.

    • You do have to spend $300 to get $300 back, but it is dollar to dollar — I don’t see a “conversion” in my account. When I put a $100 airline ticket on the card, it instantly comes off as exactly a $100 credit. It all depends on how you look at it. If you definitely had plans to spend $300 on travel in a year (most people who would even have this card definitely do), then it is really a $150 AF card. But it’s not like you’re getting $300 “free” as credit. It’s just that the money can be allocated to another expense which you would have otherwise paid for.

      Also, MP, as a side point, when I downgraded my CSP to Chase Freedom Unlimited, it was about 6 months after I had paid the $95 AF. I was shocked to see a PRORATED credit for that AF in my new CFU account! Just a DP.

    • I sort of agree with you to the extent that if you spent $300 on travel ONLY because you have the CSR (i.e you wouldn’t have spent the money if you did not have the card) then I would not count it against the $450. But if you were going to spend $300 anyway, then I think it counts. Not sure the CSR is the right card for you if you don’t travel enough to use the $300 easily. Same applies to the uber credit for the Amex Plat, I may not use all of it every month, so it is not worth $200 to me.

      In my case it is possible that I will only have 2 months to use up the $300 next year before having to cancel my card , so I’m not sure I can count it against the $450 fee in my personal calculations.

  6. Does downgrading have any effect on travel bookings made with UR points using the CSR? I booked flights for a July trip using UR points through my CSR, but I’ve decided I want to downgrade mine in May before the AF hits again. I’m not concerned about the flight booking itself as I have the Jet Blue confirmation number and can pull up the reservation on Jet Blue’s website. But will I lose the travel protections such as flight delay/cancellation, luggage loss reimbursement, etc?
    My wife also has a CSR, which is why I am downgrading mine, but the flight was booked through my account. (I wish I’d thought to transfer my points to her and book through her account instead, but hindsight is always 20/20.)

    • Good question and I’m pretty sure you have to have the card active to use the cancelations and benefits, so my gut is that if you downgraded cards the current protections of that card would be what kicked in.

    • https://thepointsguy.com/2017/07/downgrading-card-mistake-story/

      TLDR: That said, some benefits (including trip delay protection on the Chase Sapphire cards) still apply even after changes are made to your account. I confirmed with Chase benefit administrators that you remain covered so long as the benefit was available at the time of purchase and you adhered to the other relevant guidelines. That’s true even if you’ve downgraded your account or closed it entirely (but not if the account is closed or suspended by Chase). Make sure you understand the terms of your benefits before you give up on filing a claim — you may be eligible even if you think you’re not!

      I would still double check with Chase personally! I am in the same situation.

  7. We are keeping ours. My husband flies for work a lot, and now that he has a Priority pass, he does not want to go without. When we go on vacation as a family of 4, and make lounge visits 2-3 times a year, I think we get our money’s worth in food/drinks and convenience. It is true, as someone mentioned, that you need to put all your spending on this card in order to get points that you can spend on travelling.

  8. If you down grade the CSR to the Freedom card, will you be able to reapply for the CSR again in the future and still earn the new bonus points (assuming, you’re still ok with the 5/24 restrictions?) Also, when can you reapply for new card? 2 years from when card cancelled, or 2 years from first opened?

  9. If your mother has a Sapphire Preferred account it’s trivially easy to transfer the points on line — exactly the same process as transferring to a partner. That would seem to give you the most flexibility in using them in the future.

  10. For most travelers, CSR is the best card out there. In addition to the 300 dollars credit for travel spend if one is to get GE every four years, it reduces the out of pocket cost of the card to 125 dollars. With that, one gets unlimited number of lounge access entries, triple points spent at restaurants and for travel, rental car insurance and most importantly a place to stash one’s points until needed, I don’t see why there is so much fuss about keeping the card or not unless the card holder does not intend to use any money at all for travel.

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