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Chase revealed several interesting facts about its credit card business in an investor deck (.pdf) this week.
They do business in some form with 61 million American households (~ 50%) and have 97 million credit and debit card accounts.
Chase invested a ton in the new ‘it’ card in the rewards space. And they’ve now got good numbers on how Chase Sapphire Reserve is doing.
- Here’s my review of the card
- The 17 features I like and 9 lesser known benefits
- Benefits for authorized users
While the average FICO score is 785 that means many cardholders have lower scores, just as they have higher scores. Annual spend of $39,000 sounds high but equates to $3250/month, not low but not as intimidating.
I’m intrigued that 90% of users are keeping the card after the first year. That’s an incredible retention rate. It does makes sense to me from a value proposition standpoint — people who spend regularly on travel and dining make out well with the card even compared to the Chase Sapphire Preferred Card‘s double points in those categories, and that’s without even valuing airport lounge access. However I’d note that this data reflects the earliest adopters of the card only, they don’t yet have a year of data on this decision.
Chase is investing a lot in its digital experience because they believe a large portion of customers will leave a bank that doesn’t do a good job there, and will choose a bank based on a superior mobile experience.
That’s not just true for millennials either, their data suggests 85% of wealthy use mobile apps. And not only is it important to attract and retain business but it lowers the bank’s costs as well.
With consumers’ mobile emphasis Chase is closing branches, operating smaller branches, though at the same time they’re opening new branches to expand their footprint in to markets where they aren’t yet strong.
Chase used to view the branch as key to their client portfolio, it’s how they cross-sold customers so that a checking customer became a credit card customer and a mortgage customer. They now see digital as a tool here, and have had some initial success offering Chase Sapphire Reserve customers mortgages (Chase had the best deal for my mortgage last year, and they had stackable promos for a discount and 100,000 points that were added sweeteners) and even turning cardholders into wealth management customers.
(HT: Doctor of Credit)