NEW YORK—“Prestige” credit cards, those that deliver high rewards but come with a big annual fee, are apparently a big hit with younger consumers, a new report indicates.
Marketplace.org reports that the Chase Sapphire Reserve card, for instance, was so popular when it was launched that the company ran out of the metal alloy used to make the cards.
What is so attractive about Chase Sapphire, Marketplace.org said, is its sign-on bonus — 100,000 points worth up to $1,500 in free travel. “A benefit really popular among young people who tend to favor experiential purchases over status,” the website stated.
“So, it's slightly different from premium cards of the past,” Andrew Davidson of market research firm Mintel Comperemedia, told the website. “It’s not just about relying on the cachet of owning a premium card, but it’s sort of demonstrating its value for money that I think appeals to younger consumers.”
But one analyst is not sure the strong appeal of prestige cards will last.
“Those cards aren’t for everybody. I personally would never spend $450 for an annual fee for a credit card,” said Bill Hardekopf, CEO of LowCards.com, noting that after the sign-up premium is spent some people—often called “credit card churners”—simply move on to other credit cards with new sign-on bonuses.