Continuing a push to maintain its affluent customer base, JPMorgan Chase & Co. has added daily travel auctions to its Ultimate Rewards credit card program and has eliminated the foreign transaction fee on another of its cards.
These changes, which the company announced March 29, are part of a "high-end strategy," said Megan Bramlette, director of knowledge management at Auriemma Consulting Group of New York. "Card issuers are focused on encouraging their very best consumers to stay by convincing them that their cards are the best product for them."
It also is becoming "more fashionable" for issuers to waive foreign transaction fees, especially on cards with annual fees, Bramlette said. "And issuers will be able to hedge the lost revenue by increasing annual fees," she said.
JPMorgan Chase eliminated the foreign transaction fee on its Sapphire Premium cards, giving cardholders a break on the 3% fee. It also raised the card's annual fee from $85 to $95 for new customers. Current customers still pay $85.
Brian Riley, research director of bank cards at TowerGroup of Needham, Mass., said many cardholders will pay themselves back for the higher fee because new Sapphire Premium cardholders earn 10,000 bonus points if they spend $500 in the first three months. That amount of points equates to $100, Riley said.
Foreign transaction fees usually help banks increase revenue, but issuers seem hopeful that cardholders will continue to use the card and buy international travel packages, Riley said.
Holders of Chase Freedom, Sapphire, Sapphire Preferred and Ink cards may bid on exclusive travel auctions each weekday in April, Sean O'Reilly, a general manager for JPMorgan Chase, said in an interview. "We chose April because it is a significant month for travel spend," he said. Cardholders may place bids on the Ultimate Rewards website by using their points or a cash value. If they win the bid, they may use points or their card to pay for the trip, O'Reilly said. Bidding starts at 1,000 points, which equals $10, and each auction will remain live until the end of the month, he said.
JPMorgan Chase earlier re-moved foreign-transaction fees on four other credit cards, most recently for the Continental Airlines Plus MasterCard credit card.
