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The Wall Street Journal is covering Chase’s hire of Matthew Massaua from Barclaycard to run the Sapphire Reserve product. I had heard this word on the street some weeks ago. Matt ran partnerships for Barclaycard, and is universally well-regarded.
The Sapphire Reserve Card has been hugely popular but was very expensive for Chase, they even had to file with the SEC when new cardmember acquisition costs were materially above projection. That led to some doubt that they’d ever make money on the portfolio. That will become Matt’s job when he starts at Chase January 1.
Here’s Matt offering a toast at the Freddie Awards earlier this year.
Chase reports that so far Sapphire Reserve card renewals are over 90% and ‘better than expectation’ but they acknowledge it’s early to predict much from the data since the card is only just over a year old.
Overall Chase card account signups in the third quarter were down 30% year-over-year from 2.7 million to 1.9 million, attributable to having launched both Sapphire Reserve and the new Chase Ink Business Preferred Credit Card (which still has its outsized signup bonus) during that period a year ago.
Sapphire Reserve signups have naturally softened since its big introductory signup bonus is gone, and the ability to double dip on its travel credit in the first year is gone. In fact the $0 annual fee the first year ($95 after that) Chase Sapphire Preferred Card has the same 50,000 points after $4000 spent within 3 months signup bonus.
Gary, what do you predict this will do to the card? “Make card more profitable” generally means reductions in benefits for the consumer.
Doesn’t sound for chase customers. Barclays isn’t exactly known for generosity or customer service
@KR — Chase has spent a lot acquiring customers. The big expense already happened. If they can get consumers to keep the card and use the card and not just for travel and dining it will be profitable. Remember that Chase pays almost nothing at the margin for incremental spend on its cards since they have what amounts to a flat fee deal with Visa. They want consumers to use the card, and they want to cross-sell other products to these consumers [like mortgages, you’ll recall a summer offer of 100k Ultimate Rewards points for a new mortgage]
The logic of not allowing CSP long time holders to apply for CSR makes no sense.
Agree with @Beachfan. Plus 5/24 obstacle for CSR makes no sense. What with 3x bonus for travel/dining and other perks, lots of folks would make it their main ongoing premium card if they could get the sign-up bonus.
A 450 annual fee card without a 100000 point sign up bonus is a bad deal for customers. Since Barclays arrival with 2% rebates was reduced from 2.2% probably by the same guy, I expect CSR benefits to be whittled away underreacting new mgmt.
I would switch to AMEX in a heartbeat if benefits get eroded. Even capital one or the more generic fewer benefits 2% cash rebate cards come back into play since their is less headache trying to optimize spending patterns.
I know what’ll happen, they’ll try to make it into forced breakage reward scheme like A+. Barclays hasn’t put out any kind of useful card since US Airways days.
You just know AMEX is breathing a sign of relief right now.
I guess my entire family is part of the 10% group who closed their accounts.
Count me in the 10% that closed accounts. Great signup bonus