Chase Sapphire Reserve Hikes⁣ Fee, Adds Perks

jpmorgan Chase ​is ‌betting that ⁤new benefits will keep‍ affluent customers loyal to its Sapphire Reserve card, despite a meaningful increase ​in the annual fee. The bank announced Tuesday that the annual fee would jump‍ 45% to $795.

JPMorgan Chase says users will get more than $2,700 in annual benefits when the updated card launches on Monday. These⁣ include previous benefits, along⁢ with new ways to earn and ‍spend points‍ on travel and⁣ dining.

The‍ bank is touting a ‌redemption program ⁤that doubles the​ value of points for select travel offers and ‌a $500 annual credit​ at its collection of hotels⁣ and resorts.Cardholders also⁣ get a $300 dining credit at restaurants ⁣in ⁣the‌ Sapphire‍ Reserve Exclusive Tables network, a⁢ $300 credit for purchases at Stubhub or Viagogo, and free subscriptions to Apple TV+ ‌and Apple Music, worth⁤ $250⁤ per ⁣year, JPMorgan Chase said.

Customers who spend ⁤at least $75,000 annually on their cards unlock other perks, including top-tier status at Southwest Airlines and IHG Hotels and Resorts.

JPMorgan Chase also ⁢introduced a‌ new Sapphire Reserve business card with a $795⁤ annual fee‍ and similar perks as the consumer⁤ card, along with credits for ZipRecruiter and Google⁣ Workspace. this‍ move positions the ‍bank against American Express, which has⁣ had a ‍business version of its Platinum card for decades.

Upscale Ambitions

JPMorgan Chase disrupted the credit card industry ‍with ​the Sapphire Reserve’s ⁤launch almost a decade ago, bundling perks around travel and ⁤dining ⁤and opening its own network of airport lounges.

Ted Rossman, a​ senior Bankrate analyst, said that JPMorgan Chase is at risk⁢ of alienating customers who may opt to downgrade to a sapphire‍ Preferred card or offerings from American Express or Capital One.

“When the Sapphire Reserve first came out, it⁢ was a solid middle-class play that offered ⁤champagne⁢ travel on a beer budget,” Rossman said.‍ “These premium cards⁤ are going more luxury, ⁣and I ⁣wonder if the $800 fees are becoming to much for ​some to stomach.”

According to Rossman, this could be by design. American​ Express and Capital one have had to rein in access ‌to airport lounges because of overcrowding, and some⁣ users have complained that⁤ their premium cards no longer feel as special.

rossman said whether cards like‌ the Sapphire Reserve still make sense at⁣ $795 in annual fees depends on if customers will take advantage of enough of the new perks.

KBW analyst Sanjay Sakhrani said that American Express and JPMorgan Chase have​ pursued ​a subscription-type business model where an ever-rising⁤ level of⁤ perks make a compelling value⁣ proposition for certain customers.

“They⁣ feel that it creates a flywheel around keeping people engaged ​and spending in ​the system,” Sakhrani ⁤said. “Even at $800 in ​annual fees, I don’t think just anyone can provide⁣ the breadth of perks that you get on those cards.”

What’s Next

Later this year, American ⁤Express will introduce updates to its Platinum cards, ‍which currently have a $695 annual⁢ fee. Rossman expects AmEx ​will likely also raise its annual fee ​while ​adding ⁢more perks, continuing the trend of premium credit cards targeting a specific, high-spending clientele.