Dear Clever Credit,
I have the Chase Sapphire Reserve, but that higher annual fee is killing me. I’ve done the math, and it just isn’t worth it to me. I want to downgrade, but I don’t want to lose the value I get from my existing points. What are my options?
Signed,
Downgrade in the Dumps
Dear Downgrade,
I totally get it. The Chase Sapphire Reserve® upped its fee to $795 last year, and it came with a plethora of new annual credits and improved points earnings. But for many cardholders, those new benefits missed the mark.
The good news is you can downgrade your card to the Chase Sapphire Preferred® Card or the Chase Freedom Unlimited®. However, as you may already know, you will lose the ability to transfer your points to hotel and airline partners if you downgrade to the Freedom Unlimited.
So let’s discuss your points and how to make sure they don’t lose their value too much.
[Read: Travel Credit Cards]
Let’s say you downgrade to the Sapphire Preferred. You’ll now earn:
— Five points per dollar on travel purchased through Chase Travel?
— Three points per dollar on dining, select streaming services and online grocery purchases
— Two points per dollar on all other travel purchases
— One point per dollar on all other purchases
You have a couple of options here. One is gambling on the new Points Boost system with Chase. One of the changes that occurred with the new Reserve annual fee included doing away with the 25% bonus Preferred cardholders received when redeeming points through Chase Travel. Now, points are redeemed at a rate of 1 cent per point. Enter Points Boost.
For Sapphire Preferred cardholders, Points Boost points can be redeemed up to 1.5 cents per point on select hotels and flights. Points Boost flights and hotels are labeled in the Chase Travel portal, so you’ll be able to see what your points are worth before booking.
The main caveat here is that this boost isn’t available on all flights and airlines, so you might still end up redeeming points at a 1:1 value when booking other travel. Plus, I’m sure you’d rather have the majority of your points in one place before downgrading, instead of spending all of your points and then downgrading.
So your best option here is probably going to be to transfer your points to a high-value travel partner. This way, you’ll have the opportunity to earn more than the standard 1:1 ratio. Just remember that Chase partners range in value.
[Read: Rewards Credit Cards]
Chase has 13 transfer partners, and some of the top-earning transfer partners include Hyatt, JetBlue, Virgin Atlantic and United Airlines. While these partners have some of the highest redemption rates, you should choose one (or more) that you frequently book with.
When transferring points to travel partners, keep in mind that partner’s partners. (Stick with me here.) For example, if you transferred points to United Airlines MileagePlus, you could then redeem miles for award flights on other Star Alliance partners. Virgin Atlantic is a member of the SkyTeam alliance (which includes Delta Air Lines) and so on and so forth.
So this might require just a little bit of homework, but your best bet is to transfer those points to a travel partner. Don’t take the hit if you don’t have to!
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I’m Downgrading My Chase Sapphire Reserve. What Should I Do With My Points? originally appeared on usnews.com