Since its launch, the Chase Sapphire Reserve has been lauded as the card to get. Case in point: Chase ran out of metal to make the card within weeks of accepting applications. And it’s not hard to see why. The card has piqued the interest of just about everybody thanks to its wide array of benefits including:
- $300 annual travel credit (including airline tickets, hotel charges, uber rides, etc)
- 100,000 point sign up bonus
- 3 points per dollar spent on dining and travel
- Points are worth 1.5x more when redeeming on travel purchases booked through Chase Ultimate Rewards portal
Well, I guess we’re about see if the card can stand on its own without the incredibly generous sign up bonus. Or well, with less than. The sign up bonus for the Chase Sapphire Reserve card will be slashed in half – down to 50,000 points. We can expect to see the change take effect January 12, 2017 for online applications, and March 12 in-branch.
Well, I’m not too surprised to see the drop in sign up bonus, especially after J.P. Morgan CEO mentioned that the credit card reduced the bank’s profit by about $200-300 million. Ouch.
On the other hand, I’m very curious to see the impact that the drop in sign up bonus will have in applications. Don’t get me wrong – I think the card is great to have in my wallet, but I’m interested in seeing how this change will impact the card’s application base, especially since it has exceeded other premium cards in terms of popularity, at least.
And it’s not hard to see why.
Despite the $450 annual fee (the going rate for most premium cards these days), the card is able to appeal to the average person who doesn’t travel frequently, given the $300 annual travel credit (which applies to some very every day things – like uber rides), and the sign up bonus, which at a minimum translates to $1,000 if you cash it out as a statement credit (which we don’t recommend!). The card basically pays for itself, at least for the first three years or so, even if you don’t put much effort into it. And that doesn’t even begin to factor in the additional points you’ll earn on dining and travel.
In contrast, other premium cards, like the American Express Platinum Card offers access to Delta lounges, plus a $200 annual airline fee credit, which is limited to incidental fees charged by the airline, such as baggage fees and lounge day passes. Plus – you are restricted to incurring these fees with only one airline, which you can change only once a year. The Citi Prestige card offers a $250 annual credit, and while this can be used on air fare, Citi announced that they would be discontinuing the access to Admirals Clubs. Both cards have their benefits, but clearly appeal towards frequent travelers – a hurdle that the Chase Sapphire Reserve has been able to overcome.
In the end, I expect the change in the bonus will only cut out the on-the-fence potential customers, and the card will remain a top player among premium cards. I guess we’ll have to wait and see to fin out just how big a role the sign up bonus has played into the Reserve card’s popularity.
Would you sign up for this card with a 50,000 point sign up bonus?