Grand Reserve World Mastercard: Worth the Hype?

Rewards may not be as shiny as they appear.

It's no secret that premium rewards cards tend to be geared toward those who enjoy the finer things in life, whether that's exotic vacations, fancy food, or a higher travel class. Vertical Finance's Grand Reserve rewards program aims to capitalize on that by targeting a different type of spending: wine.

The bonus and earnings potential on the new Grand Reserve™ World Mastercard® sound impressive at first. But unfortunately, when you dig down into the details, it's likely to leave a dry taste on your palate.

Grand Reserve™ World Mastercard®'s earnings structure and perks

You can earn points in several ways with this card, which also offers some wine-specific perks.

50,000-point sign-up bonus: You'll need to spend at least $3,000 within the first three months to get this bonus, which is on a par with other top rewards cards. However, as we'll discuss shortly, you won't get the same value from those points as you might with other cards.

Earn up to 5 points per dollar: You can earn an unlimited 5 points per dollar spent at a network of 400+ partner Grand Reserve wineries, 3 points per dollar spent at any wine store or winery, and 2 points per dollar spent on everything else. Once again, that's a good earnings rate compared with other rewards cards, which typically offer only 1 point per dollar spent on non-bonus-category purchases.

Priority Wine Pass and other wine benefits: This card comes with a Priority Wine Pass -- its own version of the famed airport Priority Pass. Even the name is similar, although the two products are not related. This $59.99-perk grants you access to free wine tastings, discounts, and events at 350+ wineries. Finally, you'll also get a free wine magazine subscription and access to special cardholder events.

Rewards may not be as valuable as they appear

All of this sounds like a lot of value, even when you take the $149 annual price tag into account. Unfortunately, that probably won't be the case for the majority of people.

The first issue is that you won't be able to take advantage of most of the value this card offers unless you live on the West Coast (or at least travel regularly).

That's because the Grand Reserve partner wineries where you'll earn all those drool-worthy points are based almost entirely in the wine-producing regions of California, with a few sprinkled up into Oregon and Washington. The same goes for the Priority Wine Pass tastings and events. If you're an East-Coaster, you'll find it hard to really squeeze the juice from this card.

The second issue comes when you start analyzing the rewards catalog. Contrary to what you might expect, there's no wine in here at all, only wine-related merchandise like decanters, coolers, and glasses, and VIP winery events. This type of merchandise has a notoriously terrible redemption value with just about any credit card issuer, this one included. Most items clock in at a per-point value of about $0.005 -- i.e., half a cent per point. In contrast, good travel rewards cards routinely offer point values four times that much, or around $0.02 per point.

Our take: Should you get the Grand Reserve™ World Mastercard®?

In truth, we think that only a very few people will actually get any benefit from this card.

The biggest barrier is its geographical specificity. You'll still earn points on wine purchases around the country, but you'll only really earn the most points (and get the most use from the Priority Wine Pass) if you're sipping on the West Coast.

The next factor is whether you'll get enough benefit to offset the annual fee. With a yearly cost of $149, the $59.99 Priority Wine Pass brings the effective price down to $89.01 per year. You'd need to spend at least $3,560 per year at Grand Reserve partner wineries (or $5,934 on any other wine-store purchases), to break even.

You'll also need to decide whether the rewards work for you. If you hoped to use this card to get free wine, you should strike this card off your list completely.

And even if those rewards do work for you, consider this: When you make Grand Reserve partner winery purchases, the low redemption value effectively halves the rate. Those 5 points per dollar at Grand Reserve wineries is the equivalent of a 2.5% cash back rate. Similarly, purchases made at wine stores earn an effective cash back rate of 1.5%, and all other purchases earn an effective cash back rate of 1%.

The truth is that you can actually earn even higher -- and real -- cash back rates with other cash back rewards cards in many of the same categories. These rewards aren't limited to a specific area of the country, and you can redeem them for actual cash back. You don't have to choose between some token bits of wine merchandise, you can use those cash back rewards for other things, including actual bottles of wine.