Want a great credit card rewards program? It helps to be very rich.
If your household is in the top 15% of wealthy Americans, this card is for you.
(The rest of us, read and weep.)Ever since the nation and world's financial markets were clobbered last fall, credit card users -- even people with great, solid credit -- have noticed that their plastic doesn't offer as impressive rewards as they used to. Fees are higher for the rewards points, expiration dates are kicking in sooner than ever, and what you get for the points you accrue simply isn't very impressive. That's the trend.
But Chase Sapphire is making a point to thumb its nose at it. Not that this is exactly a brave, bold move. This is, after all, aimed at the richest Americans.
So what type of rewards are they offering?
Well, they're going for unique and "once-in-a-lifetime experiences." While you can get the usual deals on hotels and airfare and what have you, some of these unique and once-in-a-lifetime experiences you can trade in for your points include:
- Grand Canyon tours by airplane, helicopter or jeep: 11,000-24,000 points
- Whale watching in San Diego or Boston: 1,800-3,200 points
- Skip the line at The Empire State Building: 2,400 points for an adult; 1,900 points for a child.
And if you're really ambitious and spend enough to earn 334,300 points, you'll receive two tickets to attend a performance of Saturday Night Live in New York City--and you'll be admitted into the official cast post-party as a guest of one of the stars.
"What we recognize--and we commission a consumer sentiment study to monitor the changes in how consumers are thinking--is that rewards are even more important than ever," Sean O'Reilly, general manager of Chase Credit Services, told me, adding: "People are looking for value in their points. They want their rewards to actually get something."
Later in our conversation, he observed: "I wouldn't say that our customers' values have changed throughout this financial crisis, but they're more pragmatic and re-evaulating how they spend their money and how much service they're getting from their provider."
And so Chase Sapphire customers are going to get service and then some. For instance, if you're a card holder and have a problem, you just call the number on the back of your card and you'll get customer service immediately. As in, no voice mail to listen to first. No numbers to press first. You'll just hear a voice.
There are more nice benefits, but you get the idea. While most Americans slog it out with their credit cards, this is one that aims to please the people who can afford to use it.
One way credit card companies can afford to offer these lavish perks, incidentally, is that these premium cards have a significant higher interchange rate, says Jim Bramlett, a managing director at Novantas, a consulting firm for the banking and credit card industry. (The interchange rate is the fee that credit cards charge merchants that accept these cards.)
Bramlett recently was a guest on the syndicated radio program The CEO Show, talking about the future of credit card rewards programs, and so I contacted him to ask him what he thought of the Chase Sapphire card. He replied in an email that even in this economy, "premium products have enjoyed rapid growth, and US-based card companies continue to look for more and cleverer ways to plow back the high interchange fees they earn into value for customers, and this is a great example."
So what about the rest of us? I asked Bramlett if the lower 85% of American households could expect to see better rewards programs.
"The rest of us, as you put it, represent a different challenge to the card issuers," Bramlett said. "In the middle market segments, profitability pressures on the industry arising from credit risk issues, regulatory changes and growing preference for debit cards in certain segments put pressure on the cost of rewards programs."
Translation: The rest of us aren't going to be getting any cool rewards programs.
Well, not this year, anyway. If you loved getting cool rewards on your credit card, don't despair. That day may yet come. Bramlett did tell me that he thinks down the road, "the opportunity for a breakthrough innovation in card-based rewards will eventually emerge."
But for now? The best we can probably hope for is that if we rack up enough points, our credit card may send us a DVD of Saturday Night Live and hopefully won't charge us for postage.
Geoff Williams is a freelance journalist who often writes about banking and credit cards. He also happens to be the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Race Across America (Rodale).