JPMorgan Chase & Co. said it hopes a credit card rewards program it announced Thursday for its Freedom cardholders will increase customer spending.
Rob Rosenblatt, the banking company's general manager of customer loyalty, said the Ultimate Rewards program is designed to make Chase "a destination" for cardholders, giving them more ways to earn and redeem points. "These are interesting times, to say the least, and customers are being more careful about every dollar they spend, so we want to give them more reasons to use their Chase card," he said.
Under the Ultimate Rewards program, Freedom cardholders can still earn one point for every dollar spent and three points for every dollar spent on a rotating set of merchandise categories.
Cardholders can now also earn two points for every dollar spent on air travel when using Chase's new online booking service and up to 10 points per dollar on merchandise purchased online through Chase's new Ultimate Rewards Bonus Mall.
Cardholders may also redeem points for gift cards from 65 different merchants, restaurants, travel and entertainment providers.
There is no fee for Ultimate Rewards though cardholders can opt to pay a $30 annual fee to earn three points for every dollar spent on gas, groceries and fast food.
Chase also introduced the Sapphire Ultimate Rewards card Thursday. Cardholders can choose to pay a $95 annual fee, which enables them to transfer their points to travel-rewards programs offered by Marriott International, InterContinental Hotels Group, Continental Airlines and British Airways.
Rosenblatt said there are no plans currently to add the Ultimate Rewards program to debit cards.
Ken Paterson, a director with Mercator Advisory Group, said the rollout demonstrates the banking company's desire to "re-engage" credit card customers in rewards programs at a time when overall card spending is declining. "The fact that Chase has not watered down the core value of points, and they don't require any tiers or thresholds for customers to participate, is significant. They are making a move at a critical time to keep customers engaged in using their credit card," he said.