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.