Posted by William Charles on July 20, 2018
Credit Cards

Published on July 20th, 2018 | by William Charles

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[Rumor] Chase To Introduce ‘Chase Sapphire Banking’

In March some Chase customers received a survey asking them about a product Chase was considering called ‘Chase Reserve Banking or Chase Sapphire Banking‘. According to our sources this will be rolled out on August 18th, 2018 and will be called Sapphire Banking. We don’t know the exact specifics of what this will be, based on the previous survey you’d expect:

  • 50,000 points signup bonus (Ultimate Rewards, presumably) when depositing $75k for 90 days
  • 10,000 points annual bonus when holding a checking account and credit card
  • 75,000 points bonus + $500 back when taking out a Chase mortgage
  • .50% discount on some home equity and car loans
  • 500 free trades
  • No ATM fees
  • No foreign exchange fees
  • Various other benefits and perks

The cost to be part of this Chase relationship? Two options:

  • Either hold $75,000 with Chase
  • Or pay $25 per month

Obviously Chase may have made changes to the program since the survey was sent out but I’m 85% confident that Sapphire Banking will be rolled out on August 18th (or around that date). Chase is eager to convert Chase Sapphire Reserve customers and high other value individuals into other more profitable products to help recoup the extremely high customer acquisition costs involved with these customers.

If you put $75,000 into a 2% APY account for 90 days you’d earn ~$370 so there is a real opportunity cost involved in having these funds with Chase (especially when they are going to offer you an APY near 0%), but for some it will make sense to get the sign up bonus (60,000 points in most cases). Will/would you sign up for this new product? It will also be interesting to see how this affects Chase’s Private Client program as well.



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Steven
Steven

They mention free trades so maybe they will make funds in brokerage accounts count towards the 75k. If so, the opportunity cost isn’t an issue. I still think Bank of America Preferred Rewards is a better program but the sign up bonus is interesting.

NinjaX
NinjaX

ur too optimistic. the UR is in a different class and its taxed. I pass on this crap.

Richard
Richard

The ur earned by this bonus can’t be transferred to chase ultimate reward points like csr and cip?

Celia
Celia

Interesting. I have the reserve and premiere checking with chase. Wouldn’t do the 75000 deposit for 90 day but they do hold one of my retirement accounts, which lets me get the checking fee free. 10000 annual points would make me keep the reserve card without question. Something to keep an eye on.

calwatch
calwatch

They’re trying to go for the same audience as BoA Platinum Rewards but I don’t see anything that benefits high dollar mass affluent folks other than the annual bonus. If they wanted to drive usage of their cards, they might offer 2 points for dollar on all purchases with CSR and Sapphire banking, for instance. Or, discounts on the Sapphire Reserve annual free or a free CSP, similar to the discounts given to Citi Priority members. I could certainly bifurcate some of my portfolio and invest in the same index funds I have with Schwab with Chase, but they heretofore have not made it compelling. I also hope they don’t try to do the Chase Private Client hard sell. Merrill Edge gave me a call when I started and, once I identified myself as an experienced self directed investor, they directed me to the tools and screeners rather than to high priced options like MEGI. Chase, to my knowledge, barely has real time quotes to say nothing of the industry leading Merrill research available for free to any Merrill Edge client.

Toad
Toad

My thought exactly. I am quite happy with my current BoA/Merrill Edge setup but I would definitely consider diverting funds over to Chase that are in excess of what I need to keep my status with BoA/ME as long as a linked investment account would count for the funds. Status with bonuses at 2 > 1. That being said, I’m not in an area that is eligible for Chase banking services so it is mostly a moot point for me 🙁

Bob
Bob

Yep, 50k UR with 10k annual isn’t going to pry me away from Fidelity or Scwab.

Anon
Anon

Any indication on whether current Chase bank accounts should be cancelled in order to be eligible for this?

Ann
Ann

I don’t know, but it sounds to me like the goal is largely to convince existing customers to bring more money over, so maybe not?

Dave3584
Dave3584

I am an economics professor. I love how you often refer to opportunity cost. It is economics in action!

nycyrc
nycyrc

Well, I was hoping for a cash out option for UR points with a nice conversion rate (e.g. 1.25) similar to that of Amex Schwab Platinum

Michael
Michael

FWIW, I heard similar details in Sept 2016 shortly after the CSR card came out from a Private Banker. He made it sound dependent on the brokerage side (assuming they needed more $$$ in brokerage accounts). The Banker said that it would roll out by YE 2016.

If so, this has been in the works for quite some time, maybe Chase really needs a good reason to pull the trigger to make this reality. I think like CSR, it’d keep other big banks on their toes, and prompt BofA to keep their Plat. rewards competitive or refreshed.

David
David

Willing to do this if they actually have a decent APR for savings. Other than that, screw-off.

AkJohnny
AkJohnny

their savings rates suck but they do offer easily churnable checking/savings accounts… I’ll be getting a min $1500 in bank bonuses from Chase this year.

Tom
Tom

How many accounts did you churn to get 1,500?

NinjaX
NinjaX

chase already has a 75k level. this means they expect customers to be as stupid as possible given the current pokemon go type of hype around “free travel”. I dont need my UR taxed or restricted in any way.

AkJohnny
AkJohnny

i buy rental homes… so I’d be all over the mortgage deal.. 75k points for a mortgage…. count me in x3!!!!

NinjaX
NinjaX

first of all, JPM Chase would be my last choice for commercial real estate and investment property mortgages. there are many other banks better suited for such activity. but second, 75k UR under a different classification vs CC UR would make me never consider JPM.

Celia
Celia

Why would UR points be taxed?

Stacking Points

Celia, all UR not earned from personal credit cards are taxable. UR earned on business cards or on checking/savings accounts is taxable. Only the UR earned on personal credit cards is not taxable, as it is a rebate.

Celia
Celia

Appreciate the response. I get that cash bonuses are taxed but I’ve never had points taxed. Still, since I have a reserve card and a checking account at chase already, I’ll take $100 annually, even if it’s taxed. Between that and the $300 travel credit combined with 1.5 travel availability, it’s a decent deal.

calwatch
calwatch

How many people paid taxes on their Thank You Points earned from banking? Not that many I suspect. It’s what you are supposed to do versus what people actually do, and also valuation of the benefit.

Gerald
Gerald

This is the first I’ve heard that points from business cards are taxable. Source?

Snorlax
Snorlax

From what I understand you’re supposed to report rebates, etc, you got for your business purchases on your business taxes at the end of the year.

Gerald
Gerald

That assumes that business cards are used for business purchases. The T&C for business cards typically make that restriction, but I’ve never heard of it being enforced and I suspect most readers of DoC who have business cards use them for non-business expenses. The IRS probably doesn’t care what you use your credit cards for.

AkJohnny
AkJohnny

I just spent 2 hours with Chase Private Client banker today… he said Private Client starts at $250k

Rebekka
Rebekka

Did you initiate the CPC conversation or did they reach out to you?

physixfan

Actually the oppertunity cost can be 0. Buy a money market fund such as VMMXX, and the risk is so low that can be ignored for the 3 months period, and the return is as high as the best savings account.

Snorlax
Snorlax

Looks like they probably will require cash, but we don’t know for sure yet.

Celia
Celia

I qualify for the premiere checking with securities so I would hope it would be the same.

Frank
Frank

This seem pointless (lol) unless you naturally have $75k with Chase. Nothing about that would lure me in save the sign up bonus but then I’d cancel. Annual bonus isn’t worth that kind of cash, mortgage should be best rate/provider not “here’s points”, same applies for loans, everyone gives free trades, no ATM + FX fees is fairly standard.

Give me .5x more on CSR and we can talk.

rj123456
rj123456

How does this compare side-by-side with CPC?

Mike
Mike

I’m currently BofA plat client and earn 2.625/3.5 with BofA Premium card. If they can bump up their chase cards earning %, I’d jump on it. Otherwise I’m fine with BofA

Matthew Thomas
Matthew Thomas

Since active duty, retired, and veterans get the fee waiver I’m converting my Premier account to a Sapphire account.

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