Chase has been sending out a survey via their customer panel and they are:
- considering adding a redemption option to Ultimate Rewards… you would be able to invest the cash equivalent of your points into an investment account where you can use the money to purchase stocks, mutual funds, ETFs, etc.
In the same survey they said they are considering an Ultimate Rewards bonus for opening an investment account. Tiers as follows:
- 20,000 Chase Ultimate Rewards points for $25,000 deposit
- 40,000 Chase Ultimate Rewards points for $50,000 deposit
Chase has identified one of their key competitive advantages over American Express is their product offerings are more diverse and they can use this for cross selling purposes. We’ve already seen this with them offering Chase Sapphire Reserve customers 50,000 points for becoming Chase Private Client customers. This would be another extension of this type of cross selling and I expect it to become a lot more of a focus for Chase as they try to recoup some of the marketing expenses involved especially with customer acquisition costs involved in the Chase Sapphire Reserve in particular.
From a consumer stand point being able to redeem Ultimate Rewards points towards investment accounts wouldn’t make any sense unless the rate was more than 1¢ per point as that is the current cash out rate. You’d hope it would be at least 1.25¢ as that’s what the Charles Schwab co-branded Platinum card offers (although that is effectively just cash even though it’s in an investment account), Chase Sapphire Reserve cardholders would be right in hoping for 1.5¢ as that’s the rate they get when redeeming for travel via the Chase travel portal. I don’t see that being an option, but who knows Chase might surprise us all.
The other way other card issuers have tried to convert credit card holders into investment account holders is by offering increased earning rates, Bank of America does this with their Preferred Rewards program. Citi also offers these types of relationship bonuses.The investment account bonus isn’t terribly exciting either, we used to post brokerage bonuses but stopped because most of the time the effort involved wasn’t worth it especially when you take into account the higher fees most of these places are charging. If Chase offered an investment account redemption option what would the rate have to be for you to consider it?
Hat tip to suuuuuu & MendZik on /r/churning
