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The Chase Sapphire Reserve has been one of the most interesting credit cards to watch since its debut last year. Over the summer, the WSJ wrote that insiders at JP Morgan were worried that the Sapphire Reserve wouldn’t actually make money. In fact, Chase was so worried that they allegedly started “pushing for about $200 million in fresh cost cuts” in the unit that oversees the Sapphire Reserve.
We did see some changes to the card like changing the annual $300 travel credit to calendar year versus anniversary year (which cut down on double dipping) and no longer allowing customers to get approved for more than one Sapphire card (which was a huge blow to many newcomers).
But things started to look much better for Chase when Bloomberg reported that JPMorgan Chase & Co. said more customers are sticking with its Sapphire Reserve card than the bank initially expected. I’ve even read that retention rates are somewhere around 90%. I don’t know what the benchmark is for retention rates on a new premium card but 90% seems extremely high.
A new Sapphire executive
Well, we might be seeing some more changes come 2018 because there’s going to be a new executive leading the charge for Chase Sapphire Cards. The Wall Street Journal reported that J.P. Morgan Chase hired former Barclaycard executive, Matthew Massaua, to oversee the Sapphire Reserve and the entire family of Sapphire cards.
It’s not clear what changes if any will be made in the next year. I’ve read and heard all sorts of different rumors about the Sapphire Reserve. On the hand, it’s brought Chase a huge influx of young, well-off millennials (I still hate using that word some reason). Chase has targeted this cohort even further by offering bonuses for banking in an effort to establish long and profitable relationships with these new customers.
On the other hand, these new customers are not carrying as many balances as many expected and are proving to be more knowledgable about their credit card rewards than perhaps Chase originally imagined. This means that Chase needs a skilled and experienced team to ensure that they ride this Reserve wave the right way to attract as many customers as possible without the Reserve losing a step to the competition and becoming unsustainable with its myriad of valuable benefits.
I personally still think the Sapphire Reserve is just too valuable and that we’ll see something major drop from it in 2018. It could be the 1.5 cents redemption through Chase Travel or 3X on dining and travel — who knows? I hope I’m wrong about it and maybe the new personnel will result in positive changes for the card (though I doubt it). Time will only tell what changes we see.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.