Here's why I plan to cancel my Chase Sapphire Reserve

There are some offers mentioned below that is no longer available.

The Chase Sapphire Reserve® made headlines last week when Chase announced a $100 annual fee increase, from $450 to $550. The news had current and prospective applicants second-guessing whether the popular card was still worthwhile.

Potential cardholders had four days to apply for the card before the fee rose to $550 on January 12, 2020. Meanwhile existing cardholders are able to renew at $450 for another year if their renewal date is before April 1, 2020. Any renewals after that date incur the new $550 fee.

Chase added new DoorDash and Lyft benefits to help compensate for the fee hike, but many consumers were unsure if the new perks offset the fee. And if you don't frequently use either service, it may not be enough to offset the cost of the annual fee. That's the issue I'm personally running into.

Below, I explain why I plan to cancel my Chase Sapphire Reserve before I'm billed the increased annual fee next year.

I had been contemplating opening the Chase Sapphire Reserve for at least a year before I submitted an application two weeks ago, before I learned the annual fee would increase.

Initially, I justified paying the $450 annual fee because I liked the card's generous welcome bonus, and I was planning to take full advantage of the annual $300 travel credit and $100 credit toward a Global Entry or TSA application fee. Combined those perks were more than worth $450. But after the annual fee increased, I wanted to crunch the numbers to find the card's long-term value, based on how I plan on using it.

Here's a breakdown of the approximate value of each benefit that could easily receive a dollar amount.

I qualified for a welcome bonus of 50,000 bonus points after I opened my card. The current welcome bonus is also 50,000 points when you spend $4,000 on purchases in the first three months. This is worth up to $750 toward travel when you redeem through Chase Ultimate Rewards® since points are worth 50% more when used that way.

Keep in mind that welcome bonuses are a one-time offer. So you can't count on this to offset the annual fee after the first year.

The Sapphire Reserve provides a generous annual travel credit that can be used to offset the cost of travel ranging from airfare and hotels to tolls and rental cars.

Cardholders receive an application fee credit for Global Entry ($100) or TSA PreCheck ($85) every four years. It's generally recommended that you apply for Global Entry rather than TSA PreCheck. For just $15 more, Global Entry grants you access to both.

This perk provides access over 1,000 airport lounges worldwide after a one-time enrollment.

The DoorDash benefits are worth up to a combined $320:

• DoorDash credits: $120 statement credit ($60 in 2020 and $60 in 2021).
• DashPass membership for a minimum of one year and up to two years: Up to $200, depending on when you activate (no later than Dec. 31, 2021).

If you use delivery services like DoorDash, a complimentary DashPass membership may be a nice perk, providing free delivery and lower service fees from hundreds of restaurants on orders of $12 or more. And if you currently use a competitor, like Seamless, GrubHub or Postmates, this may be enough to convince you to switch services.

But that's not the case for me. I don't use food delivery services so this benefit isn't one I'm particularly excited about. Granted, I won't turn down 'free' money, so I already signed up and used about $20 of the DoorDash credit on an ice cream order. I'll likely spend up to the $60 credit to take full advantage of this perk and only use restaurants that are eligible for DashPass to minimize fees.

It's also important to note that these benefits are for up to two years — there's currently no indication they'll be renewed. That means you shouldn't bank on these perks to offset the annual fee every year since, as of now, they're temporary.

Cardholders can earn 10X points on Lyft purchases through March 2022 and can also benefit from a year of complimentary Lyft Pink membership. Lyft Pink is worth $19.99 per month and includes 15% off car rides, relaxed cancellations, priority airport pickups, up to three free 30-minute bike and scooter rides per month and more.

Just like the DoorDash benefits, the Lyft Pink membership is only for a limited time, so you shouldn't bank on it offsetting the annual fee long-term.

Cardholders who take full advantage of all the card benefits can more than offset the annual fee, however when I crunch the numbers it's clear I'm $90 to $250 short of recouping the fee after my first year of account opening. And when I consider how much I'll use the card (approximately $4,000 annually), that only equates to about $180 in rewards when redeemed through the Ultimate Rewards® portal.

If you fit my profile, then you may feel the same and contemplate canceling your Chase Sapphire Reserve. Experts generally don't recommend canceling your credit card since it can have a negative affect on your credit score. But paying a high annual fee that's not worthwhile can be an exception. (Learn how to cancel a credit card.)

However, you can also consider downgrading your Sapphire Reserve to another Chase card, such as the Chase Sapphire Preferred® Card, which has a lower $95 annual fee, or the no annual fee Chase Freedom Unlimited®.

If you're considering opening a different travel card, consider these alternatives which have annual fees of $95, $250 or $695.

For rates and fees of the Amex Platinum Card, click here

For rates and fees of the Amex Gold card, click here.