The Wall Street Journal is reporting that former Barclaycard executive Matthew Massaua has been hired by J.P. Morgan Chase to oversee the Sapphire Reserve and other cards in the Sapphire family. Matthew will replace Lisa Walker who currently holds this position on January 1st, 2018. A Chase spokeswoman is claiming that the retention rate on the Sapphire Reserve card is currently at over 90%, I’d be shocked if retention rates stay even remotely that high and J.P. Morgan Finance Chief Marianne Lake tempered expectations stating that retention rates were “so far, very encouraging…better than our expectations, but a little early to sort of draw firm conclusions.”
The problem for Chase since the launch of the the Sapphire Reserve card in particular is making a return on the massive customer acquisition costs they incurred. They’ve already made some changes to address this, namely:
- Making the travel credit based on card member year, rather than calendar year for new customers. This prevents cardholders from easily double dipping the benefit and only paying one annual fee.
- Reducing the sign up bonus to 50,000 points from 100,000 points.
- Cross selling to Reserve customers. Reserve customers have been offered 50,000 Ultimate Rewards points by moving $100,000+ in funds to a new Chase checking customer.
First two measures were cost saving, I doubt we will see more in that department as Chase will need to remain competitive with other issuers in the premium card space such as American Express and the majority of the customer acquisition cost has already been incurred. I do think we will see significantly more cross selling between Chase products, especially for those holding Reserve cards. We’ve already seen a survey sent out that indicates that Chase is considering the option to cash out points into an investment account and a sign up bonus for opening a new investment account as well.
It’ll also be interesting to see if Mr Massaua will focus solely on the Reserve card or if we will see changes made to the other Sapphire cards as well, I still wouldn’t be surprised to see a premium business card enter the market once Chase considers the Reserve launch a success.
Hat tip to View From The Wing
Another change they made was restricting customers to one Sapphire card.
barclaycard service stinks. this is not going to be a good thing
Actually, I think it is incorrect to quote the CSR as a $450 or even a $150 fee card.
First, the $300 easy travel credit reduces to $150.
Then take off the $95 of the CSP that is no longer needed AND the $95 for the SPG AmEx which is also not needed.
Most of us have/had these.
Makes this a great no fee card.
How does the CSR replace the SPG Amex? What’s the overlap in benefits?
Your conclusion doesn’t make sense. Why would you dismiss the SPG? It has airline partners that Chase doesn’t have, plus a 25% transfer bonus.
Hah, so the L. Walker on the sample cards was actually real. I wonder if they’ll change all their marketing images to the new guy.
Don’t they say D Barrett ?
https://creditcards.chase.com/rewards-credit-cards/chase-sapphire-reserve
Wait you’re right…. its CITI cards that say L Walker. Weird.
L Walker is actually on the Citibank advertising image. Wonder if they were trolling the Chase card division!? 🙂
Maybe it’s the opposite — L Walker walked into Chase, showed them all her Citi credentials, and was hired on the spot. Smart!
Who is this DB Barrett anyways? 🙂 I guess we’ll never know..
CSR is not that attractive for just the sign up bonus anymore, which I guess accomplished their goal of targeting individuals who want the card long term. I still think it should have a higher bonus than the CSP. 75k might make sense.
As a side note, Lisa Walker worked at Campbell’s Soup before Chase. Interesting
CSR also isn’t as attractive to keep now with so many alternatives popping up and eroding marginal benefits. $450 AF- $300 credit= $150 net. The game then is to make that up with 4.5% on travel and dining and Priority Pass.
Hmm, but now there’s 4% on dining from Uber’s card, 5% on dining with Vantage West (capped at $1500 a quarter though). US Bank Altitude is going to match 4.5% travel expenses at a lower net annual fee, BOA’s Premium rewards card will give 3.5% on travel with platinum honors at $0 net AF.
And with so many flavors of the Amex platinum card it seems a reasonable churner could have Priority Pass access along with 5x MR on airfare for years.
Unless someone has simply extraordinary dining expenses or outlandish UR valuations it’s difficult to imagine a modestly paced churner coming out ahead paying the CSR annual fee year after year.
Can you PC back to the CSR if you’ve had it before, if you’ve now over 5/24? Seems like you could accumulate UR and then get again CSR for a big 1.5x redemption.
I think that’s a pretty broad generalization. I can think of several reasons why a modestly paced churner may want to keep the card:
1. The 1.5x multiplier can make a big difference if you’re running even a modest amount of MS through multiple Freedom and Ink Cash (or grandfathered Ink Plus) cards.
2. While you correctly point out some stiff competition on the earning side with similar, less, or even non-existent annual fees, keep in mind that the flexibility of the CSR’s $300 travel credit can be more of a “true” offset to the annual fee than many (I’d even say most) premium cards with similar perks and fees. To me, the annual fee isn’t really offset by a travel credit unless you’re applying the travel credit towards something you would’ve already spent anyway. So if you wouldn’t have organically spent $200-$300 out of pocket on airline incidentals or airfare, most non-Chase travel credits don’t offset the annual fee; they only serve as a rebate on *additional* spending. However, if you regularly incur tolls, pay for parking, use ridesharing or commuter transportation, or spend money on any of the myriad things that Chase counts as travel, you can save money on these pre-existing budget items and thereby offset the annual fee more directly.
3. Some people simply value certain points currencies more than others based on redemption preferences or travel habits, so for many people, UR can take precedence over MR, FlexPerks, etc. because of sweet spots for redemptions that they use most frequently. While it’s great to get points across a variety of programs (and I do), points are only as valuable as the method by which you redeem them, so the comparison between points currencies and even to straight cash back can vary considerably depending on use.
Point is this: people in this hobby have wildly different valuations for various cards that are specific to their spending habits, redemption types, and travel preferences (or cash back preferences). Therefore, for lots of people, the math on the CSR actually checks out given their individual circumstances, even if it doesn’t for you.
@DeauxBois — great and well thought response!!
Completely agree, just want to add one more point.
Unless you have spent all your UR points (which many of us have not), or have other options to open more premium UR cards between yourself and your spouse (at this point this is limited to CIP, as CSP is no longer an option for CSR holders) you do need a place to park those UR points for future redemption…
CSP or CIP provide you this option for $95 a year, when CSR for $150 (totally agree that unlike other premier cards CSR’s $300 travel credit is practically cash).
So, I am thinking about CSR as extra $55 per year for all those extra perks. 1.5x is the main one, as 1.25x is not enough to overweight the point transfer to the partners, when 1.5x is a sweet spot for many more cases especially given the fact that you do not depend on award availability in that case.
Priority Pass, Primary Car Rental CDW Insurance, and Trip Cancellation/Interruption are just a bonus… although in my case we were able to use langue access twice the last year, and it easily saved us $150+ between all family members on the food and water we would have to buy anyway.
So, is this worth $55 extra a year? For me the answer is yes, as probably for quite a few other members… and we do not put any extra spend on it anymore (as we have other bonuses to work on), only what is necessary to utilize the insurance/protection benefits.
Good Luck!