Chase announced a significant revamp of its popular Sapphire Reserve credit card on Tuesday. The annual fee for the card will increase from $550 to $795, surpassing the fees of other premium travel cards from competitors like American Express. The changes come as part of Chase’s strategy to cater to affluent travelers willing to pay more for enhanced rewards and benefits.
Sapphire Reserve cardholders will see an expansion of perks in categories such as dining, hotels, and lifestyle credits. However, authorized users on these accounts will also face a fee increase, with the annual charge rising from $75 to $195. The new fee structure will apply to existing cardholders after October 25 on their annual renewal date.
For new applicants, the changes will take effect from June 23, when applications for the updated cards open. Chase also unveiled a new Sapphire Reserve for Business card, targeting customers who spend at least $120,000 a year.
Chase increases sapphire reserve fee
The credit card industry has seen a significant rise in revenue generated by annual fees. According to the Consumer Financial Protection Bureau, the total amount paid in annual fees across the industry increased to $6.4 billion in 2022, up from $3.0 billion in 2015. The success of the revamped Sapphire Reserve card will depend on whether the enhanced benefits justify the higher annual fee for cardholders.
The move reflects heightened competition among credit card issuers for affluent consumers, with lenders scrambling to offer attractive perks and rewards. Chase’s focus on targeting the highest tiers of wealthy consumers also speaks to the current economic cycle. As households hunt for bargains and trade down to lower-priced retailers, premium credit card lines are prepared to drop clients who stand slightly higher on the wealth ladder.
More details about the welcome bonus for the new cards will be announced on the launch date. The revamp of the Sapphire Reserve card underscores Chase’s confidence in its “affluent consumer” strategy, as CEO Jamie Dimon noted, “The card was so successful it cost us $200 million, but we expect a good return on it.”