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The Chase Sapphire Reserve℠ was introduced in the fall of 2016, and took the US credit card market by storm. Chase allegedly reached their 12 month sales goal for the card within two weeks of introducing it. The card was so popular that they ran out of the metal needed to produce the cards. I imagine they knew the card would be popular given the sign-up bonus and great rewards of the card, though it’s pretty incredible that it exceeded their expectations by that much.
This has raised some questions about whether Chase will ever be able to make money with the Chase Sapphire Reserve℠. While Chase expenses the customer acquisition costs over the first 12 months, it typically takes seven years before they make money on a customer. The further challenges with this card have been that fewer cardmembers have been financing charges than Chase expected, and that’s a way a lot of issuers make money. Furthermore, cardmembers have allegedly been using the card for more dining and travel purchases than anticipated, and since the card offers triple points in those categories, it’s presumably an area where Chase loses money.
Doctor Of Credit points to a JPMorgan Chase investor day presentation, which contains some interesting statistics about thee Chase Sapphire Reserve℠:
- Why The Chase Sapphire Reserve Doesn’t Really Cost You $450 Per Year
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