Does the benefits reimburse $ 550 annual fee?

The Chase Sapphire Reserve® card was so popular when it was launched in 2016, that Chase has a shortage of the metal needed to make the card.

Since then, the Sapphire Reserve has built up a loyal following of card members who have learned to take advantage of the card’s premium travel benefits – including a coveted $ 300 travel credit and free access to the airport lounge.

Last year, the Sapphire Reserve card underwent several updates, especially when Chase increased its annual fee to $ 550. Nevertheless, the card has gained a lot of benefits with new partners such as Lyft, DoorDash and Peloton helping to balance the higher annual fee.

If you are expecting to start traveling again this year, you may want to consider adding this card to your wallet. Below, CNBC Select outlines the benefits, perks and fees of the Chase Sapphire Reserve so you can decide if the card is worth it.

If you are a lover or regular traveler, this rewards program is tailored to you. You earn 3X points on travel and meals worldwide and 1X points on all other purchases. Also earn 10X points on Lyft purchases through March 2022.

The welcome bonus is also one of the best points: earn 50,000 bonus points after spending $ 4000 on purchases in the first three months of account opening.

The Sapphire Reserve has two unique benefits that can maximize the value of your points by 50%:

1. Chase Ultimate Rewards® Portal: Use your points to book hotels, airline tickets, cruises and more directly via the travel portal.
2. Pay yourself back: Use this tool to redeem points for a credit card for purchases at grocery stores, for meals (including restaurants, pick-up and drop-off services), at home improvement stores (such as Home Depot and Lowes), and for contributions to a dozen eligible charities. Valid until 30 April 2021.

If you use one of these redemption options, the welcome bonus of 50,000 points is worth up to $ 750.

CNBC Select has calculated how many rewards the average American can earn if they optimize the way they use their Chase Sapphire Reserve card. We worked with location intelligence firm Esri, which provided us with an example of an annual spending budget of $ 22,126.

The budget includes six main categories: groceries ($ 5,174), gas ($ 2,218), dining out ($ 3,675), travel ($ 2,244), utilities ($ 4,862), and general purchases ($ 3,953).

Here’s how many points you can earn with your Chase Sapphire Reserve card in each category:

• Groceries: 5 174
• Gas: 2 218
• Dining: 11,024
• Travel: 6 733
• Utilities: 4,862
• General purchases: 5 929
• Total: 35 940

If you use these points for travel via Chase Ultimate Rewards® or with Pay Yourself Back, you will receive a 50% bonus, which increases the value from about $ 359 to about $ 539 per year. (This does not take into account the annual fee or welcome bonus.)

Taking into account the $ 550 annual fee and the 50,000 point welcome bonus, earnings for the first year drop to about $ 309 for regular redemptions, assuming 1 point is worth a penny. If you decide to redeem points with Chase Ultimate Rewards or you repay and receive 50% more value, the value increases to about $ 739. (This is because the bonus is now worth $ 750, not $ 550.)

The Chase Sapphire Reserve card offers more than two dozen cardholder benefits, adding value to the points outlined above.

Many of the best benefits have a clear value of $ 60 to $ 300 each. Once these benefits are optimized, you can reimburse the annual fee of more than $ 550.

Here are the key benefits:

• $ 300 annual travel credit to reimburse flights, hotel accommodation and more
• $ 100 credit for Global Entry / TSA PreCheck Fee every four years
• Complimentary DashPass (worth about $ 119) for a minimum of one year (enroll on 31 December 2021)
• Up to $ 120 credit for Peloton digital memberships and access to all access (subscribe on 31 December 2021)
• $ 60 DoorDash Credit in 2021
• Free year of Lift Pink membership (worth about $ 239 per month), which includes a 15% discount on car rides, relaxed cancellations and preferred airport pickups
• Priority Pass Choose lounge access (worth $ 429), which gives you access to more than 1000 VIP lounges in more than 500 cities worldwide

In addition to the benefits, you can take advantage of useful travel and purchase coverage, such as:

• Protection for eligible purchases lost or damaged
• Protect back on qualifying items that the store will not take back
• Extensive warranty protection on eligible purchases
• Roadside assistance while traveling in the US and Canada
• Exemption from collision with car rental
• Baggage delay insurance
• Refund of lost luggage
• Travel cancellation / cancellation insurance
• Refund of travel delay
• Travel accident insurance
• Travel and first aid services
• Special benefits at The Luxury Hotel & Resort Collection, such as free room upgrades, early check-in and late check-out
• Emergency evacuation and transport
• Emergency medical and dental

Learn more about the specific terms for each benefit.

This card has a fairly steep annual fee of $ 550. Therefore, it is not for everyone. You must pay the annual fee on your first account, then each subsequent account anniversary. You can abolish the annual fee during the year by earning rewards and taking advantage of the benefits above.

There is no entry price period of 0% for this card, therefore it should not be used to finance new purchases or complete balance transfers. The APR typically varies from 16.99% to 23.99% on purchases and balance transfers.

This card has no foreign transaction fees, so you can travel and spend outside the US without paying the average 3% fee.

If you travel regularly, the Chase Sapphire Reserve Card can be a useful addition to your wallet. To offset the $ 550 annual fee, you need to take full advantage of the card, from the $ 300 annual travel credit to the benefits of Lyft, DoorDash and Peloton. That said, this card has a powerful range of benefits ranging from travel insurance and government credits on eligible spending to 50% extra value for certain repayments.

But if you do not want to exceed $ 550, consider the cheaper Chase Sapphire Preferred® card. This card has an annual fee of $ 95 and still offers a 25% boost on eligible redemptions. Plus, you can take advantage of many of the same travel and purchase protections, as well as similar credit deals.