The big news that TPG broke yesterday was that 100,000 point signup bonus on the Chase Sapphire Reserve card will be decreasing to 50,000 points on January 12th, though it will remain at 100,000 points for in branch applications till March 12th. Frankly, I’m surprised that the 100,000 bonus lasted this long especially with the card so in demand Chase ran out of the special metal alloy to make the card. Now that we have a known end date for this offer, if you are under Chase’s 5/24 rule and/or are pre-approved for this card, I think it is a sound financial decision to apply for this card before the 100,000 signup bonus goes away. And to show that, I am going to present the numbers from an extreme point of view.
*Quick side note: I generally don’t put up these types of posts telling people what to do (I’ll leave that to the affiliate bloggers telling you to get every credit card under the sun) but when I see a good deal worth discussing and presenting my own angle on it, I like to bring attention to it for my readers’ sake – something affiliate bloggers struggle with.*
To prove this is a sound financial decision, I am going to assume the extreme, worst case scenario – you don’t travel ever, have no need for the points for anything travel related, no use for the $300 travel credit or any of the other perks. The cash outflow is pretty straightforward – it’s the annual fee of $450.
Now for the cash inflow, this is where it gets interesting. Did you know you can redeem Chase UR points at a value of a penny per point for cash directly into your checking account? Guess what 100,000 points can get you? $1,000.00 cash deposited directly into your checking or savings account. Actually you would have 104,000 points after meeting the minimum spend (again worse case – assuming no bonus category spending!) so that’s actually $1,040.00.
Remember the $300 travel credit which you thought was worthless since you don’t travel? You could buy American Airlines gift cards and re-sell them to an exchange at 81.5% of face value easily. Or buy and re-sell Marriott gift cards at 80.5% if you prefer (though I don’t why you would). It is an easy, quick process to sell the cards to these exchanges so that’s another $244.50 in the bank. But it gets better because you can actually do this twice because the travel credit is annual, resetting with the close of your December statement. So if you opened the card now, used the $300 travel credit in say March and your last statement closes something in early December, you can use the $300 travel credit again before next year’s annual fee comes due! You can also call Chase and have them move up the statement date to ensure this happens. That’s another $244.50 in the bank. And actually you just earned another 1,800 points for spending $600 across the two travel credits, which is worth $18. The final numbers are…
- – $450 for the annual fee
- + $1,040.00 cash (signup bonus)
- + $244.50 (first travel credit)
- + $244.50 (second travel credit)
- + $18.00 (points earned for buying gift cards and using travel credits)
Net Inflow: $1,097.00
The above shows that for opening a single credit card a person could reap rewards at the very minimum of almost $1,100 in cold hard cash! Now if you travel even just a little bit or can redeem the points in a more valuable way (such as transferring to airline/hotel partners or redeeming at a value of 1.5 cents a point for travel directly through Chase), then your net inflow is even larger.
Obviously I had a little fun writing this post and showing the benefits from a very non-traditional point of view as I truly do think this card is one of the best on the market… even if you are not a traveler. I hope I don’t come across like an affiliate blogger in this post as you can clearly see I don’t have any affiliate links or any links to the card in general. In fact, I strongly debated on whether to even write this post as I didn’t want to send the “wrong message” but I decided to because it benefits my readers who may have been on the fence about the card (plus it was kinda fun to write).