While acknowledging that Sapphire Reserve caught them off guard and needing to respond aggressively, American Express claims to be way ahead of Chase.
JPMorgan is “staffed by a whole bunch of Amex alums who at least know our historic playbook and I always assume are 18 months behind whatever feature or functionality we introduce,” [Doug Buckminster, president of Amex’s global consumer services group] said. “They’re going to show up with a knocked-off version.”
According to American Express since revamping their Platinum card two and a half years ago they’ve “seen a 60% increase in growth” in Platinum accounts and that half of new cardmembers are under age 35.
Ultimately Chase has one huge advantage in the economics of its products that American Express has had difficulty matching. While American Express has sought to get into the ‘pay over time’ business, Chase earns far more in revolve on its products than American Express does on theirs.
In the premium rewards charge card business American Express is relying primarily on interchange (merchant swipe fees) and annual fees for revenue, while Chase adds interest to the mix (although if you’re paying card interest you shouldn’t be using a premium rewards card).