Here's how to tell which Chase Sapphire credit card may be right for you

The Chase Sapphire Preferred and the Sapphire Reserve are among the most popular credit cards out there — but there are a few key differences between them. While the Reserve offers better rewards and more perks compared to the Preferred, it also charges a much higher annual fee. That leaves many potential users wondering which Sapphire card may be right for them, or whether an alternative makes more sense.

“Selecting Sapphire Preferred or Reserve ultimately comes down to the needs and interests of the individual customer, which is why we offer choices,” a representative from Chase tells CNBC Make It.

Here’s a breakdown of both options, and how to decide which one is better suited to your lifestyle, or whether you’re better off with a different card altogether.

The Chase Sapphire Reserve

The Chase Sapphire Reserve has an intimidating $450 annual fee, but that fee is offset by its offer of $300 in travel credits every year. Plus, the rewards add up. Users earn 3 points for every dollar spent on travel and dining and 1 point on all other purchases. The card also offers a 50,000 bonus points as long as users spend $4,000 in the first three months of opening the account.

What makes the Reserve special is its redemption options. Every point you redeem on travel is worth 1.5 cents. That means its 50,000-point bonus can have a value of $750. Chase also offers 13 transfer partners, so you can trade your points in for United MileagePlus miles, for example, and find a seat in business class.

The card’s premium perks include Priority Pass Select lounge access in more than 1,000 airports throughout the world and benefits provided by the Luxury Hotel & Resort Collection. The card also offers extensive travel coverage in the event of trip cancellation or lost luggage.

The Sapphire Reserve at a glance:

  • Rewards: 3 points on travel and dining, 1 point on all other purchases
  • Annual fee: $450
  • Bonus: 50,000 points if you spend $4,000 within the first three months
  • Variable APR: 17.74 to 24.74 percent based on your credit score
  • Estimated five-year return for average travelers: $1,100 to $2,030
  • Estimated five-year return for frequent travelers: $1,670 to $2,880
  • How you redeem points: Transfer points to a partner rewards program, book travel directly through the Chase Ultimate Rewards travel portal, or redeem for cash or gift cards at a lower rate
  • Notable perks: $300 in annual travel credits; Up to $100 credit for Global Entry or TSA Precheck; Priority Pass Select; Luxury Hotel & Resort Collection; extensive travel coverage; no foreign transaction fee

The Chase Sapphire Preferred

The Sapphire Preferred is similar to the Reserve but there are a few notable differences. Its annual fee is only $95 after a free first year, and instead of 3 points on travel and dining, it only offers 2 points with a redemption value that isn’t quite as high. Points redeemed on travel are worth 1.25 cents, rather than 1.5 cents.

So even though this card also offers the opportunity to earn 50,000 points when you sign-up, that bonus is worth up to $625, not $750.

This card doesn’t offer complimentary airport lounge access or benefits from the Luxury Hotel & Resorts Collection. It does offer some travel protection, including trip cancellation insurance and a damage waiver on auto rentals, but its coverage is not quite as extensive as the Reserve’s.

Otherwise, the two cards are the same. They offer the same relatively high variable APR of 17.74 to 24.74 percent, the option to redeem points for cash at a value of 1 point per 1 cent, 13 transfer partners and no foreign transaction fee when you use the card outside the U.S.

The Sapphire Preferred at a glance:

  • Rewards: 2 points on travel and dining; 1 point on all other purchases
  • Annual fee: $0 first year, then $95
  • Bonus: 50,000 points if you spend $4,000 within the first three months
  • Variable APR: 17.74 to 24.74 percent based on your credit score
  • Estimated five-year return for average travelers: $1,230 to $1,710
  • Estimated five-year return for frequent travelers: $1,670 to $2,190
  • How you redeem points: Transfer points to a partner rewards program, book travel directly through the Chase Ultimate Rewards travel portal, or redeem for cash or gift cards at a lower rate
  • Notable perks: Travel coverage; no foreign transaction fee

Which one could be better for you?

The Chase Sapphire Reserve offers more than the Preferred, but the question is whether its perks are worth the $450 fee.

If you travel at least four or five times per year, the answer is probably yes. Using that $300 travel credit every year offsets the vast majority of the fee, and the $150 remaining is only $55 more than the $95 cost of the Preferred, a difference that the Reserve compensates for with its higher rewards rate and travel perks.

In fact, according to our analysis, the Reserve earns both average and frequent travelers a larger long-term return. When points are redeemed at their highest value, average travelers earn an estimated $2,030 over five years with the Reserve, while frequent-travelers earn an estimated $2,880. Meanwhile, average travelers with the Preferred earn an estimated $1,710, while frequent-travelers earn an estimated $2,190.

Those numbers come from a sample budget based on expenditure data from the Bureau of Labor Statistics. The average travelers spend approximately $22,000 per year, including $403 in airline fares, $475 on hotels and $64 rental cards. For the frequent traveler’s budget, these categories were revised upward based on the expert recommendation that you should spend at least $8,600 on travel and dining each year to make getting a travel card worth it. We increased the expenses proportionally to the average budget, estimating annual airfare costs of $2,300, hotel costs of $2,700 and vehicle rentals of $400.

    So at what point exactly does the Preferred become the better choice? We found that if you put anything less than approximately $8,500 on your card, total, assuming the spending categories of your budget are proportional to the average traveler, the Preferred will have a higher return. Again, that’s assuming you only redeem points on travel at the highest value, and it’s assuming you make use of the $300 travel credit every year.

    If, on the other hand, you don’t take advantage of that $300 travel credit or travel frequently, the Preferred will earn you a much larger return, even if you put $20,000 on the card in a year.

    In short, the Reserve seems to be the better choice even for average spenders, as long as that travel credit is being taken advantage of, especially if you want those extra perks, such as airport lounge access. If you don’t travel very often, the Preferred is a much safer choice, considering its low annual fee.

    Are there better choices?

    Both Chase Sapphires are excellent, well-rounded credit cards. The Reserve is actually CNBC Make It’s runner-up pick for the best travel card. But if you’re looking for something specific, such as maximizing your cash back or traveling luxuriously, according to our analysis, there are better options out there.

    If you’re looking for a travel card that will get you the most points, you should consider our No. 1 choice for travel cards, the Capital One Venture. The Venture has the best return after five years for both average and frequent travelers, beating out the Reserve and Preferred. It offers 10 miles per dollar spent on hotels if you book through and a high flat-rate of 2 miles per dollar on all other purchases, allowing you to rack up miles on all kinds of spending.

    If luxury is your priority, the American Express Platinum may be your best choice. Like the Reserve, the Platinum gets cardholders Priority Pass Select lounge access, but also Centurion lounge access and Delta Sky Club access when flying directly with Delta. As for hotel perks, the Platinum offers free nights and other benefits with its own Fine Hotels & Resorts program, and users qualify for “Gold Elite” status with Hilton and Starwood hotels.

    The Platinum requires a $550 annual fee, so it doesn’t quite get you as large a return as the Sapphire cards. But to balance out that fee, the card offers a 60,000 point sign-up bonus, hundreds of dollars in annual Uber and airline credits and a lucrative reward structure. Users get 5 points per dollar spent booking flights or hotels through American Express Travel.

    Finally, if you want to maximize your cash back, the Sapphire cards aren’t ideal. Using Chase points to get cash lessens points’ value, since they’re worth 25 percent to 50 percent more, depending on if you have the Preferred or the Reserve, respectively, when you redeem points for travel.

    For cash back, we recommend the Chase Freedom, our pick for the No. 1 cash back credit card overall. It requires no annual fee and offers a $150 sign-up bonus and 5 percent cash back on up to $1,500 in purchases on categories that rotate every quarter. If you consistently hit that limit, you save $300 per year, plus what you earn from an unlimited 1 percent on all other purchases.

    For more details about how we calculated the five-year returns for the Chase Sapphires, check out our complete list of the top travel cards.

    Don’t miss: We looked at the 35 most popular travel credit cards—here’s our pick for No. 1

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