Cult of Chase Sapphire: Credit-Card Churners Have a New Love

by Brian Riley 0

Intense credit card reward follows won’t be afraid of Chase’s latest card that carries a whopping $450 in annual fee, as suggested by this recent article in the Seattle Times.

While the sweet spot for reward cards is in the $75-$95 range, which might make $450 seem way out of whack for many, the features of it make the card a wonderful proposition. The only downside to the card is that it is subject to Chase’s 5/24 rule: If you applied for 5 cards in the past 24 month’s you probably won’t get the card no matter what your FICO score is.

A look at Chase’s site is the best way to get the skinny on what is involved. In return for your $450 annual fee, you receive a $300 annual travel credit, knocking down the net cost to $150. After purchasing $4,000 in the first three months, the issuer pays you 100,000 points, which typically translates to $1,000, so you are now at an $850 net positive position against your original investment.

With features like a 3X point multiplier against all purchases and aggressive Elite-level travel, the card carries a very strong positive return.

You should pay note to Chase’s 5/24 rule because it is the first time a major issuer has placed the restriction in a public forum. It seems like a good idea in general. You won’t qualify if you have applied for a lot of cards in the past two years, a rule in place to protect against credit card churners who work their way through card offers to maximize benefits.

Rewards play a significant role in the payment card industry and this one looks like a winner, likely to spawn a few followers over the next year or so.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

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