The Chase Sapphire Reserve card was refreshed back in June. If I were to gauge the reaction to the refresh, then I’d say it was largely mixed. In this post, I outlined 7 reasons why I sat out and had no plans on going for the ‘new’ Chase Sapphire Reserve. However, I continue to use my Chase Sapphire Preferred card, one that I’ve carried now for almost a decade. While the reactions in the miles and points community may have been mixed, if you go by Chase’s own statements during their most recent earnings call, the launch was seemingly a massive success for the business.
Also Read: How 8 Chase Sapphire Reserve Perks Easily Cover the Annual Fee & Then Some..
Chase Sapphire Reserve Refresh
During their most recent earnings call, Chase executives touted the Sapphire Reserve refresh as a massive success. Most notably, according to them, the Chase Sapphire Reserve refresh yielded them their ‘best year ever’ for new account acquisitions in the Sapphire portfolio.
In light of the attention our Sapphire refresh has received, we want to note that this has already been the best year ever for new account acquisitions for our Sapphire portfolio. The CIB reported net income of $6.9 billion.
However, Chase’s CFO was quick to qualify that statement with a caveat.
While there’s a lot of puts and takes inside that number in terms of rewards, liability, annual fees and so on, the particular dynamic that’s happening now is that as part of the refresh, customers are getting increased value ahead of the moment where the annual fee goes up. There’s a kind of transitional period of a few months as the refresh rolls through where those numbers are slightly elevated.
The Pundit’s Mantra
For a lot of existing cardholders, this indeed is a honeymoon period, in which they’re able to use the new benefits at the lower annual fee. It will be interesting to see how the numbers show up next year when cardholders start seeing the higher $795 annual fee charged to their Chase Sapphire Reserve cards.
Also, the CFO’s statement clearly mentions the Sapphire portfolio, which means that some of those numbers could be elevated because of customers choosing to sign up for the Chase Sapphire Preferred card as well.
What’s your take on the CFO’s statement? If you’re an existing cardholder, do you plan to renew the card next year, when a higher annual fee of $795 will be charged? Tell us in the comments section.
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Well the juicy upfront bonuses probably got a lot of people to sign up plus for existing holders the annual fee doesnt kick in for another year like myself, so it’s no surprise there are more INs than OUTs. We’ll see next year because it is a definite downgrade for to the CSP.
The funny thing about the credit card business is that it can all seem great collecting $800 in cash upfront from so many cardholders . . . until you realize that you’ve been giving credit cards to people foolish enough to pay $800 for the right to carry it and they turn out – well into the future – to be less credit worthy than more economically conservative people who see that as a poor choice. We’ve seen this all before . . . picking up pennies in front of a proverbial steamroller.
Precisely, their data probably tells them than x% of customers will keep the card after the increase, so the models can predict clearly that it will be a net winner.