Product hysteria is not the sort of thing that normally attaches itself to credit cards, but as scores of message boards and YouTube unboxing videos will attest, consumers are having a rather atypical reaction to the Chase Sapphire Reserve card. The card has been so popular that JPMC ran out of the fancy metallic stock the card is made from — forcing some disappointed users to live with plastic temporary cards for a few weeks.
Like many premium cards with rich rewards, the price per annum for these cards is steep — $450. But ground once trod by only a handful of issuers — most notably, American Express — has now become more open to players hoping to compete for the spendier customers more likely to whip out the plastic to pay for travel and dining experiences.
“American Express used to have a stranglehold on the high-end market, but folks like Chase and Citi are coming hard after their crown,” said Matt Schulz, an analyst for CreditCards.com, a comparison site. “It’s the best time in years to shop for a rewards card.”
American Express’ Platinum charge card pioneered the premium category and was the longtime leader of the high-cost, high-reward card, but in recent years, Citi’s overhauled high-end Prestige credit card has gained in popularity quickly. The card offers similar benefits to an Amex Platinum — free hotel stays, access to airport lounges, transferable points redeemable for airfares and upgrades, as well as spending incentives to let customers cash in faster.
Since last year, Chase has also pushed aggressively into the market and began generating talk about a new card with a 100,000-points bonus — more than twice most of its competitors.
“It significantly exceeded our expectations,” Amy Bonitatibus, a spokeswoman for Chase, said of the “tens of thousands” of cards the bank has issued so far.
Millennials have particularly favored the card, which is a big win since the generation of student debt as a group tends to avoid credit products.
“If you look at the behavior of millennials, it’s clear they’re not going to commit to a relationship with one credit card or brand the way their parents did,” said David Robertson, the publisher of The Nilson Report, which follows the credit card industry.
Whether the card can hold out long term depends largely on the value proposition it offers customers and what its rivals in the arms race at Amex and Citi do next.
But in any event, the notable numbers to watch are the overall increasing numbers of consumers seeking premium credit cards. The number of Citi Prestige cardholders increased sixfold in the last 18 months, according to a company spokeswoman, and American Express said that its Platinum card membership is “large, growing and loyal.”