Chase Sapphire card targets big spenders
JP Morgan Chase, after losing $1.59 billion from its credit card operation, is going after more affluent customers with its Chase Sapphire card, which has no credit limit. The card is meant for households with incomes higher than $120,000 per year.
The card offers bonus rewards of one point per dollar spent, and those points can be exchanged for flight miles, credit or cash. The Chase Sapphire card is available in Visa and Master Card versions.
Blue tries to be the new black
As credit card companies continue to try to target richer customers, the color of wealth keeps changing colors — from gold to platinum to black and now blue, er, sapphire. As more middle-class Americans discover they can save money and avoid debt by using low interest loans, credit card companies are focusing more and more on people who don’t mind (or don’t notice) the hefty credit card interest rates and spend a lot of money.
American Express right now has the most wealthy, or highest-spending, customers. Bloomberg.com reports:
The Sapphire card will be available on the Visa Inc. and MasterCard Inc. networks, an advantage for JPMorgan because those cards are accepted in more places than American Express, Smith said. Visa was accepted at 8 million U.S. locations last year compared with 7.9 million for MasterCard and 4.6 million for American Express. American Express CEO Kenneth Chenault told investors Aug. 5 his cardholders on average spend 3.5 times more than Visa cardholders and 4.5 times more than MasterCard users.
Credit cards and the economy
Bloomberg.com also reports on the overall health of the credit card industry and what it says about the national economy:
JPMorgan’s card operation lost $1.59 billion in the past three quarters as consumer spending fell 2 percent since its peak at the end of 2007, the deepest retrenchment since 1980. The division isn’t expected to earn a profit in 2009 or 2010.
The card unit is showing signs of recovery. The default rate in July fell for the second month in a row, to 7.92 percent from 8.04 percent in June, a signal the worst recession since the 1930s may be ending. Charge-offs usually track the U.S. unemployment rate, which fell last month to 9.4 percent, the first decline since the recession began in December 2007.
How to convert customers
Gordon Smith, chief executive officer of the JP Morgan Chase card division, says his job is to convince consumers that the Chase Sapphire card bonus points program is superior to other bonus programs. Chenault of American Express doesn’t appear too feel threatened by the Chase Sapphire card, based on the efforts versus progress of other credit card companies in the past. Chenault said:
“Merchants are looking for customer spending and our cardmembers provide it,” Chenault said. “Despite all the claims by Visa and MasterCard about success in the affluent segment, where it really counts — in the results — they haven’t moved the dial at all.”
b.t.w., I called Chase when I receive the invite, wanted to say I wished to keep the same card I (and Brian) had. Too bad, phased out, October for me. She did say, "when you called me, you did get a live person answering the phone, right?" which I did. " Isn't that worth something?" she asked.
I received a letter from Chase saying I had been "upgraded" to a Sapphire card from my Freedom card. After looking at how much more difficult it will be for me to get the same thing (cash reward), I will look for a new card with a new company. Thanks for the "upgrade," Chase.
ditto to what Brian says, but admittedly, even with decent earnings and same of credit score, I haven't found a lot of prospects out there since I don't participate in Freq Fly programs in recent years
Thank you for re-inforcing the old adage – if you don't pay your bills on time, you're going to pay more.
So sorry they have disappointed you with this deplorable practice.
i wonder if the chase marketing team put the above comments only to get to poor guys to stay away
Chase can take their cards and SHOVE IT where the sun don't shine. They are nothing but LIARS. They tack on all sorts of fees to the card and paying the minimum or even half of the card balance isn't good enough for them. They will just close your account after a couple of times of you only paying half the card balance, report you to the credit bureaus as "delinquent" and send 10 different debt collectors after you. I'm not kidding about this.
There is NO negotiating with them. It's either you pay the card in full or you will be paying through the nose with their miscellaneous fees. I wouldn't recommend Chase to a dog.
Don't get a card with Chase and certainly DO NOT open a bank account with Chase. You will be SORRY beyond belief if you have an account with Chase. Chase will close your bank account without warning if you don't keep more than $12 in it at any given time. $12 that goes towards their "monthly service fee". And after they close your bank account, your name gets listed in Chex System and you have NO choice but to get a second chance checking account. There is NO way of getting your name out of the Chex System.
If you have an account with Chase, CLOSE IT NOW. DO NOT WAIT. DO NOT PATRONIZE THEM. Don't patronize businesses that practice deceptive tactics. I will HATE Chase forever and a day. I don't want anyone to go through what I went through with Chase. It's mind blowing the way they operate.