As the New York Times reports, “seldom does a new credit card go viral.” But millennials are grabbing up JPMorgan Chase’s new engraved metal Chase Sapphire Reserve Visa card faster than the bank can produce them.
Millennials, who have a reputation for preferring debit over credit for fear of going into debt, make up the majority of new Chase cardholders who are gladly paying the high annual fee of $450 to get their hands on this premium card.
Millennials seeking to earn points faster, and redeem them for travel or to shop at Amazon and other retailers, may have first been attracted to premium rewards cards when Citi reconfigured its Prestige Mastercard card in 2014 (also charging a $450 annual fee) to offers perks like free hotel stays, airport lounge access, and faster point accumulation.
But why would budget-conscious millennials opt for premium credit cards?
Because value-seekers have figured out that the bonus points for signing up, the faster earn rates, and the ability to use earned points for a wide variety of travel opportunities, goods, and services from favorite merchants make these cards a good value - even after the annual fee.
This surge of interest in high-fee cards that offer premium travel perks may be less surprising when you remember that nearly three quarters of millennials prefer experiences (especially travel experiences) over material possessions.
Premium cards that offer the right mix of savings and rewards (particularly on travel) are poised to win this generation’s loyalty - something that brands across all industries have struggled to do.