Prestige credit cards are a big hit with millennials
The Chase Sapphire Reserve card was so popular out of the gate, that the company ran out of the metal alloy used to make the cards. People are even uploading unboxing videos to YouTube. The cards have become a viral phenomenon of sorts, thanks in part to effusive praise from travel sites and bloggers.
So, what’s going on? Well, for one, Chase has a pretty attractive sign-on bonus — 100,000 points worth up to $1,500 in free travel, a benefit really popular among young people who tend to favor experiential purchases over status.
“So, it’s slightly different from premium cards of the past,” said Andrew Davidson from market research firm Mintel Comperemedia.
“It’s not just about relying on the cachet of owning a premium card, but it’s sort of demonstrating its value for money that I think appeals to younger consumers.”
Even though Chase may chisel some customers away from the likes of American Express’ Platinum Card, or Citi’s Prestige Card, others see a hard ceiling for this market.
“Those cards aren’t for everybody. I personally would never spend $450 for an annual fee for a credit card,” said Bill Hardekopf, CEO of Lowcards.com, a consumer site for credit cards.
Hardekopf noted that after the sign-up premium is spent, some people often called “credit card churners” simply move on to other credit cards with new sign-on bonuses.
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