You wouldn't think that this would be the time to launch a luxury credit card but JPMorgan Chase & Co. has come out with a new card, Chase Sapphire, which is aimed at the affluent. Bloomberg News reports that Chase Sapphire is for households with incomes exceeding $120,000. The new card has no pre-set spending limit and holders earn a point for every dollar they spend.
There are two Chase Sapphire cards. The basic card offers the Ultimate Rewards program that includes double points on airfare purchased through the company's travel booking tool and up to ten bonus points per dollar for shopping at any of the over 300 merchants featured at the Ultimate Rewards Mall. The Preferred card also includes a 25 percent travel bonus that means points are 25 percent more valuable when booked online with the travel booking tool. Preferred card members will receive 10,000 bonus points on purchases of $50,000 or more per year. The cards also offer concierge service and emergency services for travelers. The Chase Sapphire has no annual fee and the Chase Preferred has a fee of $95 after the first year. Chase Sapphire has a 10.24 percent variable interest rate and a $39 late fee for balances over $250.
The Sapphire card is meant to compete against American Express and its many programs for affluent cardholders. The Bloomberg article states that American Express CEO Kenneth Chenault told investors recently that his cardholders on average spend 3.5 times more than Visa cardholders and 4.5 times more than MasterCard users. The Sapphire's points and rewards program are meant to appeal to those who use their cards frequently. Will it work? American Express's cardholders are pretty loyal to the brand. But with American Express raising fees and rates being able to switch to a new card with no annual fee might be appealing
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