New perks, $795 annual fee
JPMorgan Chase has recently announced a major update to its premium credit card, the Sapphire Reserve. Despite a significant increase in its annual fee to $795, a 45% jump from its previous level, the bank is confident that a slew of new perks will keep affluent Americans loyal to the card.
The updated Sapphire Reserve, set to launch on Monday, will offer users over $2,700 in annual benefits. These benefits include existing perks as well as new ones related to earning and spending points on travel and dining. For example, the card now features a redemption program that doubles the value of points for select travel offers, a $500 annual credit at Chase’s collection of hotels and resorts, and a $300 dining credit at restaurants in the Sapphire Reserve Exclusive Tables network.
Additionally, cardholders will receive a $300 credit for purchases at StubHub or Viagogo, as well as complimentary subscriptions to Apple TV+ and Apple Music, valued at $250 per year. Customers who spend at least $75,000 annually on their cards will unlock additional perks such as top-tier status at Southwest Airlines and IHG Hotels and Resorts.
JPMorgan has also introduced a new Sapphire Reserve business card with a $795 annual fee, offering similar perks to the consumer card along with credits for ZipRecruiter and Google Workspace. This move positions the bank in direct competition with American Express, which has long offered a business version of its Platinum card.
The launch of the Sapphire Reserve almost a decade ago disrupted the credit card industry by offering lucrative signing bonuses and credits. However, with the recent price hike, JPMorgan risks alienating customers who may opt for less expensive options like the Sapphire Preferred card or cards from competitors like AmEx or Capital One.
According to senior Bankrate analyst Ted Rossman, the trend of premium cards becoming increasingly luxurious may lead some consumers to question the value of paying $800 in annual fees. However, both AmEx and JPMorgan believe that the ever-rising level of perks on their cards creates a compelling value proposition for certain customers, driving engagement and spending.
Looking ahead, AmEx is expected to introduce updates to its Platinum cards later this year, likely raising the annual fee while adding more perks. Despite the high cost of these premium cards, analysts believe that the breadth of perks offered by AmEx and JPMorgan sets them apart from competitors and appeals to a specific segment of consumers willing to pay for luxury and convenience.
