The Chase Sapphire Reserve® was introduced in the fall of 2016, and took the US credit card market by storm. Chase allegedly reached their 12 month sales goal for the card within two weeks of introducing it. The card was so popular that they ran out of the metal needed to produce the cards. I imagine they knew the card would be popular given the sign-up bonus and great rewards of the card, though it’s pretty incredible that it exceeded their expectations by that much.
This has raised some questions about whether Chase will ever be able to make money with the Chase Sapphire Reserve®. While Chase expenses the customer acquisition costs over the first 12 months, it typically takes seven years before they make money on a customer. The further challenges with this card have been that fewer cardmembers have been financing charges than Chase expected, and that’s a way a lot of issuers make money. Furthermore, cardmembers have allegedly been using the card for more dining and travel purchases than anticipated, and since the card offers triple points in those categories, it’s presumably an area where Chase loses money.
Doctor Of Credit points to a JPMorgan Chase investor day presentation, which contains some interesting statistics about thee Chase Sapphire Reserve®:
- The average income of a Chase Sapphire Reserve cardmember is ~$180,000
- The average FICO score of a Chase Sapphire Reserve cardmember is ~785
- The average annual sales volume of a Chase Sapphire Reserve cardmember is $39,000
- The average sales active rate for a Chase Sapphire Reserve cardmember is 96% (this is the number of cards with greater than zero gross sales divided by the number of total open accounts)
- The average renewals for the Chase Sapphire Reserve are 90%+
Those are some really impressive numbers, and really shows what a success this card has been. The following two statistics stand out to me most:
- The average renewal rate for premium credit cards is 60-90%, so to have a 90%+ renewal rate is virtually unheard of
- The average cardmember has spend of ~$39,000 and income of ~$180,000, meaning that on average cardmembers are spending ~22% of their income on this card, which is fairly close to the average percentage of income that American consumers spend on credit cards; it’s astounding that Chase has been able to capture so much wallet share with this card, and make it a “one size fits all” card for so many consumers
The Chase Sapphire Reserve® is so popular for good reason. While it has a $795 annual fee, the card offers a $300 annual travel credit, 3x points on dining, great travel, car rental, and purchase protection, a Priority Pass™ membership, a Global Entry fee credit, and much more.
Do any of the above statistics about the Chase Sapphire Reserve surprise you?
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