WSJ: "Sapphire Reserve Cards Aren’t Very Rewarding for J.P. Morgan"

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
takeshi
Posts: 1175
Joined: Thu Oct 03, 2013 10:02 pm

Re: WSJ: "Sapphire Reserve Cards Aren’t Very Rewarding for J.P. Morgan"

Post by takeshi » Mon Aug 07, 2017 8:56 am

Da5id wrote:I can't imagine I'm a profitable customer, nor are most boglehead types.
They make money on swipe fees as well. It's not just about profitability but risk also. They have to maintain a careful balance between customers that are less financially risky and earning lower profit versus higher profit and more risky customers.
cbr shadow wrote:Can I ask how often you travel? I find that people who don't travel very often sometimes have anxiety about missing their flight and get to the gate super early.
We travel often and prefer getting there early. Not "super early" but early. We don't enjoy trying to rush at the last minute and would prefer to take it at a leisurely pace. We also have lounge access so any extra time is spent at the lounge and not at the gate.

Da5id
Posts: 2059
Joined: Fri Feb 26, 2016 8:20 am

Re: WSJ: "Sapphire Reserve Cards Aren’t Very Rewarding for J.P. Morgan"

Post by Da5id » Mon Aug 07, 2017 9:43 am

takeshi wrote:
Da5id wrote:I can't imagine I'm a profitable customer, nor are most boglehead types.
They make money on swipe fees as well. It's not just about profitability but risk also. They have to maintain a careful balance between customers that are less financially risky and earning lower profit versus higher profit and more risky customers.
Sure. But with me averaging lets say 2.5-3% rewards, and them having some costs associated with servicing me seems like a decent chance they aren't making money on an ongoing basis, much less accounting for the signup awards...

BW1985
Posts: 1763
Joined: Tue Mar 23, 2010 6:12 pm

Re: WSJ: "Sapphire Reserve Cards Aren’t Very Rewarding for J.P. Morgan"

Post by BW1985 » Mon Aug 07, 2017 10:43 am

The PP value depends on where you're traveling. The MSP Escape lounge is okay but it's in terminal 1 and Southwest is out of terminal 2 so I don't even get to use it when I'm traveling for pleasure. Hasn't been all that valuable to me so far.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

rjbraun
Posts: 1239
Joined: Sun Sep 09, 2012 8:22 pm

Re: WSJ: "Sapphire Reserve Cards Aren’t Very Rewarding for J.P. Morgan"

Post by rjbraun » Mon Aug 07, 2017 10:52 am

Da5id wrote:
takeshi wrote:
Da5id wrote:I can't imagine I'm a profitable customer, nor are most boglehead types.
They make money on swipe fees as well. It's not just about profitability but risk also. They have to maintain a careful balance between customers that are less financially risky and earning lower profit versus higher profit and more risky customers.
Sure. But with me averaging lets say 2.5-3% rewards, and them having some costs associated with servicing me seems like a decent chance they aren't making money on an ongoing basis, much less accounting for the signup awards...
I think that's a good point about the need for banks to have customers with different risk /profitability profiles. Also, even if you average 2.5-3% rewards, I would think it's possible that that "cost" could be spread across several parties and not borne entirely by the banking institution. For example, do hotels, airlines, etc. pay something to the bank, Chase, in this case, in order to have their services offered on the Chase travel platform?

michaeljc70
Posts: 3746
Joined: Thu Oct 15, 2015 3:53 pm

Re: WSJ: "Sapphire Reserve Cards Aren’t Very Rewarding for J.P. Morgan"

Post by michaeljc70 » Mon Aug 07, 2017 12:10 pm

I can see why. I got my annual summary and received about $2800 in benefits for the $450 annual fee. I canceled before the renewal.

Post Reply