What One Card Is Missing From Chase’s Ultimate Rewards Lineup?
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The Chase Ultimate Rewards credit card family plays a central role in almost everyone’s travel rewards strategy — whether you’re looking for a low-maintenance card to start building your credit history or a premium piece of metal with luxury travel benefits.
In the old days (read: about two years ago) the decision-making process for finding the right Chase card was much simpler. The Chase Sapphire Preferred Card was unambiguously the best card for almost everyone to get, but the launch of the Chase Sapphire Reserve complicated things a bit, forcing you to decide whether you were willing to pay more for a larger suite of benefits and higher bonus earning rates.
But it’s the recent launch of the Ink Business Unlimited Credit Card that really has us thinking about Chase’s strategy. Other than the higher sign-up bonus of $500 after spending $3,000 in the first 3 months, this no-annual fee product is essentially just a business version of the popular Chase Freedom Unlimited. In fact if we zoom out and look at Chase’s personal and business card offerings side by side, we see a pattern start to emerge.
The Chase Sapphire Preferred bears a strong resemblance to the Ink Business Preferred. Both cards carry $95 annual fees, offer bonus points on travel purchases (2x on the CSP and 3x on the Ink Preferred), a 25% bonus when redeeming for travel through the Chase portal (making your points worth 1.25 cents each), and the ability to transfer points to Chase’s 13 airline and hotel partners. While the cards have different sign-up bonuses and slightly different bonus categories, they have a lot in common.
The same can be said of the Freedom Unlimited and the Ink Business Unlimited Credit Card. Both of these no annual fee cards offer an unlimited 1.5% back on purchases, which, if paired with a premium Chase card (Sapphire Preferred, Sapphire Reserve or Ink Preferred) can be turned into 1.5x Ultimate Rewards points per dollar spent. And presumably these cards are also both easier to get approved for than their premium counterparts, even though they’re both restricted by the 5/24 rule.
The only personal Chase credit card that doesn’t have a similar product on the business side is the Sapphire Reserve. And while Chase has given no indication that it plans on launching an “Ink Business Reserve,”an ultra-premium business card seems like the only missing piece of the puzzle.
What the Ink Reserve Could Look Like
Again, this is purely speculative; we have no reason to think this card is actually on the horizon. We’re simply pondering the possibility that this card might someday exist based on Chase’s existing lineup, and making some educated guesses about what it might look like based on the issuer’s other offerings and the rest of the premium credit card market.
I’ll split this into two sections: earning/burning, and ongoing benefits.
Earning & Burning
The first question on everyone’s mind when they look at a new credit card is what sign-up bonus it offers. Given that the Ink Business Preferred currently offers 80,000 points after you complete the minimum spend of $5,000 in the first three months, it stands to reason that a more premium card would have an equal or higher bonus. I say equal or higher because even though the Sapphire Reserve launched with a 100,000-point bonus, it currently offers the same 50,000 points (after $4,000 in spend in three months) as the middle-market Sapphire Preferred.
On the flip side, I’d be surprised to see a bonus above 100,000 points. When Chase first launched the Sapphire Reserve, that big, shiny 100,000-point bonus helped Chase obliterate its sign-up goals. In fact, so many people applied that the issuer ran out of the metal needed to produce the cards!
80,000-100,000 seems to strike a happy medium between rewarding new cardholders without costing Chase an excessive amount of money.
The Ink Business Preferred already offers fairly generous bonus categories, giving 3x points on the first $150,000 in combined annual purchases across the following categories:
- Shipping purchases
- Internet, cable and phone services
- Advertising purchases with social media sites and search engines
I see a few possible ways here for Chase to elevate the premium (hypothetical) Ink Reserve. One would be to remove the cap, and add 3x on dining purchases similar to the Sapphire Reserve. Given how much money some businesses can spend on these categories, though, I find that unlikely. Another option would be to offer an unlimited 3x on travel and dining (like the personal Sapphire Reserve), while keeping the $150,000 cap on the remaining business bonus categories. A happy medium, if you will.
Yet another option, which would make this the most desirable card on the market in my opinion, would be to go after Amex and offer 5x points on travel purchases. The key advantage here is the broad way Chase defines travel, from Uber to metro to actual hotel and airfare purchases. The 5x bonus category on the The Platinum Card® from American Express, by comparison, is restricted to airfare purchased directly with the airline or through Amex Travel, and prepaid hotels and airfare booked through Amex Travel.
All Ultimate Rewards cards with an annual fee (Sapphire Preferred, Sapphire Reserve, Ink Preferred) have access to the same set of transfer partners, all at a 1:1 ratio. The only difference is the value they get when you’re redeeming points for travel directly through the Chase travel portal. The Sapphire Reserve gets you 1.5 cents per point, while the other cards get 1.25 cents each.
I don’t see Chase going any higher than 1.5 cents, so that’s what an Ink Reserve would likely be able to redeem for as well. With the potential 5x on travel wishfully mentioned above, that would lock in a minimum return of 7.5% on all travel purchases (compared to 4.5% minimum with the current personal Sapphire Reserve).
Premium cards come with a premium price tag. The annual fee on the Ink Reserve would certainly be no less than the $450 a year on the Sapphire Reserve, and possibly go as high as the $550 a year on the Amex Platinum. In exchange for that, we’d expect to see a long list of perks and benefits including:
- $300 a year annual travel credit
- Priority Pass select membership (which is now offered in some form by almost every premium card on the market)
- Global Entry or TSA PreCheck application credit
- Visa Infinite benefits
- Access to Chase’s Luxury Hotel & Resort Collection
- Trip delay and interruption insurance and baggage loss and delay insurance
- Primary car rental insurance
All of the above benefits come standard on the Chase Sapphire Reserve, but in order to launch a new product Chase would need to differentiate it somehow. Here are a few new benefits it might introduce:
- Marriott Gold status — Given Chases’s close and long-standing relationship with Marriott, this seems very possible. It would also be another way to compete with The Business Platinum Card® from American Express
- Elite status with a car rental program, again similar to the Amex Business Platinum
- Boingo hotspot and/or Gogo in-flight Wi-Fi passes
- Millennial-friendly perks. While I’d be surprised to see Chase copy Amex directly with annual Uber credits (or SoulCycle benefits) there are plenty of other ways it could go after younger consumers. Free Netflix or HBO subscription, anyone?
Why Chase Might Want To Launch This Card
Let me again say that this is all speculation and we have no reason to believe Chase is preparing to launch this card. But there’s a strong case to be made that it should. When the Sapphire Reserve launched, it was hands-down the most successful credit card launch ever. Consumers ate it up, and other banks were forced to respond. It wasn’t until Chase started offering 3x on travel purchases that Amex decided to offer 5x on airfare on the Platinum.
While Chase currently has three Ink business cards in its lineup, none of them carry the same set of premium benefits that the Business Platinum does. Large business spenders have an extra consideration: They don’t want their companies’ purchases showing up on their personal credit report and dragging their score down. So if Chase could offer a premium business card, it stands to reason they’d win a decent amount of market share.
Why Chase Might Not Want To Launch This Card
The 5/24 rule, which limits you from successfully adding new Chase cards to your wallet if you’ve signed up for five cards across any issuer in the last 24 months, was no accident. It seems to stem from Chase’s desire to cut down on credit card churners and attract customers who are valuable in the long term. If Chase were to launch an Ink Reserve today, a large percentage of the people who’d want it wouldn’t be eligible to apply, due to the 5/24 rule.
Additionally, many of the customers who’d be attracted to and eligible for a premium business credit card might already have the Sapphire Reserve. Issuers make a good amount of their money on interchange fees when you swipe your card, and offering a new card won’t increase the amount these people spend. Chase might have looked at the math and decided that it’d only end up offering a duplicate set of premium perks (i.e., from both the Sapphire Reserve and Ink Reserve) without actually attracting new business.
Whether it’s an Ink Reserve, a new Amex, or something else entirely, we’re likely to continue seeing the introduction of new premium credit cards as competition heats up in the industry. In order to keep that competition cost-effective, issuers are restricting who can get their cards — especially people they believe to be gaming the system. Whether you’re looking at business cards or personal ones, it’s important to have some kind of long-term strategy, so you stay eligible to get the cards you actually want.