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Chase adds limited-time benefits to Sapphire cards with new Pay Yourself Back feature

Chase updated the rewards for its Sapphire cards for a limited time. Here are details on Pay Yourself Back and the Sapphire Reserve card's travel credit and annual fee changes.

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Most Amerians have canceled travel plans due to the ongoing coronavirus pandemic, and many are wondering when it will be safe to travel again.

So it's no surprise that travelers with airline and hotel rewards cards are second-guessing paying for a high annual fee credit card right now. Instead of summer getaways, many find they're spending more on groceries and home office equipment. 

In response, card issuers are adapting their premium and travel cards to include limited-time bonus rewards on groceries, takeout and streaming subscriptions. Chase has already offered welcome bonus extensions to eligible cardholders and introduced bonus rewards on groceries purchases for the majority of Chase credit cards.

Today, the bank took things a step further and unveiled a completely new feature, Pay Yourself Back, that adds new Ultimate Rewards® redemption options for the popular Chase Sapphire Preferred® and Chase Sapphire Reserve® cards. Sapphire Reserve cardholders can also benefit from more flexibility with the card's annual fee and annual travel credit.

Below, CNBC Select shares the details on the new Chase benefits and how you can take advantage of them when they go into effect within the next few days.

The Pay Yourself Back feature maximizes the value of your Ultimate Rewards points

Chase is launching a new Pay Yourself Back tool on May 31, which will give 25% to 50% more value to Ultimate Rewards points that are redeemed for statement credits on purchases at grocery stores, dining (including restaurants, takeout and eligible delivery services) and home improvement stores (such as Home Depot and Lowes).

Typically, if you redeemed Chase points for statement credits you'd only get a one-to-one value, which means 1 point is worth 1 cent. But now with Pay Yourself Back, Sapphire Preferred and Reserve cardholders can redeem their points as statement credits for eligible grocery, dining and home improvement purchases at an increased value of 1.25 cents each (for Preferred) or 1.50 cents each (for Reserve).

For example, if you want to offset a $150 grocery store purchase with a statement credit, you'd typically need 15,000 points, but with Pay Yourself Back, you only need 12,000 points (Preferred) or 10,000 points (Reserve).

In the past, this increased value only applied when you redeemed your points for travel expenses booked through Chase Ultimate Rewards®.

A Chase spokesperson confirmed that Pay Yourself Back may expand access to other eligible Chase cards and new spending categories, but there is no date set for this yet.

In order to use this feature, choose an eligible purchase you've made in the past 90 days, apply points for all or part of the purchase and receive a statement credit. The accelerated redemption rates are valid from May 31 through September 30, 2020. Pay Yourself Back works similar to Capital One's Purchase Eraser, which allows you to redeem miles for past travel purchases, and for a limited-time eligible food delivery, takeout, streaming services and phone services.

More flexibility with Sapphire Reserve's annual $300 travel credit

The Chase Sapphire Reserve offers an annual $300 travel credit that can be used to offset hotel stays, airline fees and other travel-related expenses. But with many Americans staying at home, Chase is aware that cardholders aren't taking advantage of this credit.

Therefore, Chase is expanding what purchases qualify for the travel credit to include gas station and grocery-store spending. These transactions will automatically count toward earning your travel credit from June 1 through December 31, 2020.

Changes to the Sapphire Reserve's annual fee

The Sapphire Reserve card has a pretty steep $550 annual fee that increased from $450 earlier this year

Chase recognizes that existing cardholders may not have the extra money to spend on a higher annual fee and has instituted changes for cardholders with renewal dates throughout 2020. Here's the breakdown of who's eligible to receive a lower annual fee:

  • Existing cardholders with renewal dates between April 1 through July 31, 2020: Receive a one-time, automatic $100 credit toward the new $550 annual fee.
  • Existing cardholders with renewal dates between August 1 through December 31, 2020: Annual fee will stay at $450.

Cardholders don't need to do anything to receive the $100 credit or lower annual fee.

Bottom line

Chase is launching some helpful new features (and modifying existing ones) that can help add value to its Sapphire travel cards. While these perks aren't as extensive as the changes Amex recently made to 11 of its premium cards, they provide new benefits on groceries and gas that can help cardholders maximize rewards.

Don't miss: Chase Sapphire cards now earn bonus rewards on Instacart, gas and streaming services for a limited time

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.