The Chase Sapphire Reserve and Freedom Unlimited are two very different credit cards, yet they have one thing in common: Both earn at least 1.5 Ultimate Rewards points per $1 spent. There’s a lot of debate about whether the Sapphire Reserve is worth keeping long-term, with many holding onto it for the higher earning rate. With the similar earning rate, some are wondering whether to downgrade the Sapphire Reserve to the Freedom Unlimited in Year 2. If you’re someone who doesn’t really care about travel benefits but rather the ability to earn lots of points and miles, here’s my take on how the Sapphire Reserve and Freedom Unlimited stack up against each other:
Annual Fee: Sapphire Reserve vs. Freedom Unlimited
The annual fee on the Sapphire Reserve is $450 in addition to $75 for each authorized user. Meanwhile, the Freedom Unlimited has no annual fee and adding an authorized user is free. When comparing the Sapphire Reserve vs. Sapphire Preferred, we determined that after deducting the $300 annual travel credit, the annual fee would consequently be reduced to $150. This is a fair cost to compare against the Chase Freedom’s $0 annual fee.
Category Bonuses: Sapphire Reserve vs. Freedom Unlimited
The Freedom Unlimited has no category bonuses, but rather earns just a flat 1.5% cash back on everything. This can be converted to 1.5 Ultimate Rewards points per $1 spent if you have another Ultimate Rewards-earning credit card. The Sapphire Reserve earns 3 points per $1 on travel and dining, plus 1 point per $1 on everything else. When redeemed through the Ultimate Rewards Travel Portal, these points are worth 50% more. Thus, you are essentially earning 4.5 points per $1 on travel and dining, and 1.5 points everywhere else.
The 1.5 points from the Freedom Unlimited card are worth just that, regardless of whether you’re transferring them to a travel partner or redeeming them through the Ultimate Rewards Travel Portal. Actually, transferring them to the Sapphire Preferred or Ink Plus and then redeeming them at the Ultimate Rewards Travel Portal would get you an extra 20% in redemption value.
So how do you decide whether its better to keep the Sapphire Reserve or downgrade to the Freedom Unlimited? Simply compare the difference in annual fee and whether the category bonuses exceed the annual fee in value. You would have to spend at least $3,333 – 5,0000 on travel or dining to earn enough points to off-set the $150 annual fee on the Sapphire Reserve.
Should You Downgrade from the Sapphire Reserve to Freedom Unlimited?
So should you downgrade from the Sapphire Reserve to Freedom Unlimited? It really depends on whether you’ll make use of the many travel benefits offered by the Sapphire Reserve. Some of you might find that the $100 Global Entry or TSA PreCheck application fee credit every four years makes it worthwhile to keep the Sapphire Reserve past the first year. Or perhaps the annual Priority Pass Select membership is important to you. Both of these things could further cut down on the extra $150 you’d have pay for the Sapphire Reserve, assuming you actually use them.
But if you’re just looking to earn a flat 1.5 points per $1 spent without category bonuses, then it makes sense to downgrade from the Sapphire Reserve to the Freedom Unlimited card and save $150. After all, with the Freedom Unlimited your 1.5 points are worth that much regardless of whether you redeem them through the Ultimate Rewards Travel Portal or transfer them to a travel partner. Just keep in mind that you do need another Ultimate Rewards-earning credit card to be able to convert the cash back from this card to points.
Are you considering downgrading from the Sapphire Reserve to the Freedom Unlimited card? Which factors are you taking into consideration to make your decision?