April 1, 2020 is when existing cardholders of the Chase Sapphire Reserve would start paying a $550 annual fee at their account renewal. That’s a $100 increase from what the annual fee had been. New applicants have been paying the higher fee since January.
This couldn’t have been worse timing for Chase. Just as the economy is entering hibernation and a record number of unemployment claims are filed is not the time when people want to be paying an extra $100 for a luxury credit card targeted to people who travel and dine out. Those are two things people aren’t doing right now as most of the United States population are being ordered to stay home as much as possible.
While I wasn’t thrilled about the increase, Chase is handling this in what might be the best way they could. They’re essentially putting a freeze on the increase for 1 year.
I’d imagine there are legal issues involved in changing the terms of a credit card that prevents them from saying, “Hey, we’re only going to charge you $450. Forget all those messages we sent.”
So they’re still going to charge the $550, and then immediately issue a $100 statement credit.
What makes this particularly nice is that cardholders still get to take advantage of the $60 DoorDash credit and a Lyft Pink membership that was added to reduce the sting of the $100 increase.
I’m sure Chase saw the writing on the wall. People weren’t thrilled about paying the higher annual fee for a card with benefits that aren’t useful, like a Priority Pass membership. Chatter was already on the internet asking if Chase would be offering a retention offer for the Sapphire Reserve, something they’re never done in the past.
So instead of trying to figure out what to offer people or making them upset by not offering anything, they proactively gave everyone a $100 retention offer. It would have been cheaper to only provide this to people who called to cancel, but this move gives them a little goodwill, which is going to be important when it comes to keeping customers.
This is the first big move by a major bank to try and prevent a loss of customers because of the economic effects of fighting the coronavirus. I doubt it will be the last we’ll see.
#stayhealthy #stayathome #washyourhands
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This post first appeared on Your Mileage May Vary