If the Chase Sapphire Reserve Had a $150 Annual Fee

In this video I go on a quick rant about how the Chase Sapphire Reserve could benefit from a $150 annual fee.

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#ChasesapphireReserve #ChasevsAmex #TravelRewardsCreditCards

[roberttaylor]

For every 1 million people that get the CSR, Chase gets a $300 million interest free loan upon which they can subsidize their own loans for far more money to other people. Meanwhile, while of course some people will blow through their travel credit quickly, a lot of people will use it slowly or even at the end of the annual credit period.

Make no mistake, while the travel credit is a convenient way for the consumer to recoup their annual fee, the catch is that you're essentially giving chase an interest free $300 loan - albeit a loan that you can effectively recollect at any given time. But statistically speaking, this function alone has to earn Chase millions just in interest from the subsequent loaning that they do with the money.

[havad]

The travel credit incentivizes spend. If you book a trip on a card you’re likely to have flights and hotels which would far exceed $300.

[ziich]

1. This is the same tactic as mail in rebates. Pay the full price and we give some back to you. Not many people send it in
2. It entices you to use the card. Since you have to use it to get the money back
3. Having the higher annual fee makes it feel like a more exclusive card. They want people with high spend on the card. It is the same thing with the Platinum card. After you get the credits the annual fee is not that much

[kevinjames]

This would only hurt Chase- by having a $300 travel credit that’s easy to use in full, all cardholders are essentially giving chase a $300 interest-free loan until that credit is redeemed. Additionally, the stipulation that points can’t be earned while redeeming the credit means Chase is saving 900 points, or $135 per person.

[kaiyu]

With more savvy customers they should let us choose our category what we want w/ base AF.

[raychen]

If the CSR does this then no one would get their CSP at all, however it does make sense for lots of people because they have 300 to pay whatever instead of "travel credit"

[MOBMJ]

but the AMEX platinum has a $200 uber credit and a $200 airline plus the $75 credit for staying two connective nights at a hotel that does have to be booked on the AMEX travel portal but still it is basically free money for something your going to do any way and last but no least you have the $100 sacks thing credit so in my opinion it is actually better because you are actually coming up a head (up in profit) plus take into a count that there are AMEX offers on you card that is customized for you so that really helps. plus the concierge service and (per-sale tickets events for concerts and event) which also in my opinion you can't put a price on service

[ryanfield]

I would like this because now for the first $300 of travel I put on the card, I'd actually get the 3X back while still saving the $300 off the current AF.

[julianlobert]

The point of credit is to entice people with low or negative “effective annual fees”. But the credit card companies know a good amount of people will not use those credits. In those cases they win.

However in Chases case they almost might as well ditch the credit and lower the AF. The travel credit is so easy to use naturally and requires no set up. They probably have a very small amount of people who don’t actually use the credit.

Amex on the other hand plays the credit game much smarter. Many credits spread out over time makes it much harder to naturally and effectively use. A much higher percentage of people are not using up their credits with Amex which makes them more money in the end

[mateo...]

Wow you're right they should drop the reserve to 150 AF and introduce a card more qualified to complete with Platinum

[JCAK]

Chase is counting on Joe average to not know the ins and outs of travel hacks and maybe not use up the whole travel credit, and them holding a balance on the card. But yes to us that use our cards responsibly that does make sense.

[stefancurcic]

In my opinion, if Chase did this, the CSR would lose a large portion of Active duty military customers since we don’t get charged the annual fee. I think you’d see a lot of these customers move over to AMEX. Obviously I’m pandering to a small portion of the population, but still something to consider.

[dingmingzou]

If the do this they will kill their relationship with priority pass and all those lounges. When too many people have lounge access, I would stayed outside instead of going inside the zoo

[sladesurfer]

I think they will have to get rid a bunch of benefits if it’s $150 they might get rid of priority pass cause that thing is expensive and maybe scale back on trip delay insurance. If they did that then it’s just another version of sapphire preferred lol. A lot of this companies are banking on 95% of its customers don’t know anything about travel hacking

[tiaxi]

Obviously Chase collab with those travel companies, the real cost for Chase is way less than you pay 300$, also it will stimulate you book tickets along with other spending.

[seenzee]

It makes no sense from their perspective to lower the AF. They already have the cards with no AF and one with a $95 fee. In the contrary, they want to increase it to makes it seems premium.
CSR shouldn't be compared to the Amex Gold or Citi Preferred.

[allenwalker]

And to add to that point, in all fairness, you would have to apply that travel credit logic to all the cards you're comparing it to.