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JPMorgan Chase Sweetens Sapphire Reward Offers


Sep. 17 2018, Published 9:04 a.m. ET

JPMorgan Chase sweetens reward offers

In an effort to retain existing customers and add new customers, JPMorgan Chase (JPM) has sweetened the offerings for its Sapphire accounts. Last week, the bank announced that credit card customers who open a new Sapphire bank account will be eligible for a 60,000 point sign-on bonus worth $900.

However, there’s a catch to the sweet offer. The new account holders have to bring $75,000 in deposits or investments and hold it for at least three months. For regular Chase customers who don’t have that kind of savings, they can upgrade to the Sapphire bank account by paying a monthly fee of $25.

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Considering the offers provided on Sapphire cards, JPMorgan Chase will likely lure customers to open bank accounts and keep deposits of $75,000. Apart from the initial sign-up bonus, the add-on advantage on Sapphire banking will include no ATM or wire transfer fees worldwide, access to the “You Invest” free online trading app, and early access to sports events and concerts.

So far in 2018, JPMorgan Chase has outperformed the Financial Select Sector SPDR ETF (XLF). The stock has gained 6.1%, while XLF has risen ~1.1%.

Targeting young and wealthy customers

JPMorgan Chase intends to deepen its relationship with young and affluent customers who are increasing their savings. These customers might make big financial decisions in the future. By deepening the relationship, JPMorgan Chase should be able to benefit in the future.

Jamie Dimon, JPMorgan Chase’s CEO, said that his strategy of enhancing relationships with customers is mainly inspired by Amazon’s (AMZN) Prime membership model. By providing a number of services like cloud storage, video streaming, music, and two-day delivery under its Prime program, Amazon has boosted its customer base and increased online sales.

Last month, JPMorgan Chase announced free unlimited online trading on its “You Invest” app for Sapphire banking and Chase private clients who have holdings of $100,000. E-Trade Financial (ETFC), Charles Schwab (SCHW), and Ameritrade Holding (AMTD) have charges of $6.95, $4.95, and $6.95, respectively, per trade after the free offer expires.

The unlimited free online trading feature for the Sapphire card will likely lure rich and young people to open a Sapphire bank account. More existing customers will likely upgrade their accounts, which would generate additional revenues for the company.


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