The credit card industry is more competitive than ever before, with issuers constantly introducing new industry-leading cards. It’s amazing to see the pace at which cards have been improving.
Back in the day a 2x bonus category was impressive, while nowadays you can earn 2x points on everyday purchases, and 5x points with some bonus categories.
The Sapphire Reserve Was The Start Of An Era
Arguably the Chase Sapphire Reserve® Card was a turning point in the credit card industry. It’s an incredibly well rounded premium credit card, and in many ways was a premium credit card for people who wouldn’t have otherwise considered premium credit cards.
The card has a $795 annual fee, but offers so many incredible perks — 3x points on dining and 4x points and air and hotel booked directly, a Priority Pass™ membership, great travel coverage, flexible points, and more.
There’s talk about whether Chase will ever make money on the Sapphire Reserve, given how rewarding it is, and given their high acquisition costs. Chase met their 12 month sales goal on the card in the first two weeks it was introduced. The card was so popular that they ran out of the metal required to make the cards.
You’d think that this card would be one that other card issuers strongly dislike, but that’s not the case… at least that’s what Amex is claiming.
Why Amex Is Grateful For The Sapphire Reserve
When it comes to the credit card “race,” an American Express executive has some interesting things to say.
Doug Buckminster is Amex’s President of Global Consumer Services. He claims that Amex initially lost customers when Chase introduced the Sapphire Reserve in 2016, but says that he’s actually happy they introduced the card.
Why? American Express Platinum Card® has seen a 60% increase in growth after adding new benefits a couple of years back, and more than half of new Platinum cardmembers are under the age of 35.
As he explains it:
“It actually did us a service. It really intensified interest in the premium payments category. Suddenly everybody was talking about high-fee credit cards that have lounge access and rich benefits.”
So basically the Sapphire Reserve ushered in a new era for premium credit cards. I do find this interesting, though. While I like both the Sapphire Reserve and Amex Platinum, I view the cards as going after different consumers.
The Sapphire Reserve is actually a good card to use for everyday spending, while the Amex Platinum doesn’t have bonus categories that are as useful, and rather that card is all about the perks.
Is Chase Just Copying Amex?
The above I can see the logic of, though Buckminster makes another interesting claim. He says that Chase is 18 months behind Amex on things, saying that Chase is:
“Staffed by a whole bunch of Amex alums who at least know our historic playbook and I always assume are 18 months behind whatever feature or functionality we introduce. They’re going to show up with a knocked-off version.”
That’s quite a statement.
Interestingly at this point I almost feel like the pattern is opposite — not that Amex is copying Chase, but rather that I think Amex has been refreshing their products more recently.
Chase has had an incredible lineup of cards, though in the past few years they haven’t made many changes to them. The Sapphire Reserve continues to be compelling, their Ink Business Preferred® Credit Card is an industry-leading business card, and the entire Chase Ultimate Rewards ecosystem is awesome.
But I’d argue that it’s within the past 12 months that Amex has been refreshing their portfolio, so I’m not sure I’d agree that Chase is 18 months behind Amex here. Quite to the contrary, I think Amex is getting more attractive due to recent changes, so the timing seems opposite to me:
- The American Express® Green Card offers 3x points on dining, travel, and transit
- The American Express® Gold Card offers 4x points at restaurants worldwide (on up to $50,000 in purchases per calendar year and then 1x), 4x points at U.S. supermarkets (up to $25,000 in purchases per calendar year and then 1x), and 3x points on airfare purchased directly with airlines or at AmexTravel.com
- The American Express® Business Gold Card earns 4X Membership Rewards® points on the 2 categories where your business spends the most each billing cycle from 6 eligible categories. You will earn 4X points on the first $150,000 in combined purchases from these categories each calendar year and then 1x thereafter.
The information and associated card details on this page for the American Express Green Card have been collected independently by OMAAT and have not been reviewed or provided by the card issuer.
Bottom Line
It’s always fascinating to see how credit card issuers view the competitive landscape. I believe that Amex may have benefited from the introduction of the Sapphire Reserve, as it makes sense that it increased interest in the premium card market.
However, I absolutely don’t think Chase is 18 months behind Amex, even if it’s true that Chase is getting a lot of ex-Amex employees. When you look at the products they’ve introduced, Chase has done refreshes before Amex. Arguably that puts Chase at a disadvantage, since Amex is able to one-up them with some of their card refreshes.
What do you make of these statements by an Amex executive?
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