June 3, 2009
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News: Chase Launches Ultimate Rewards Program
Consumers are becoming savvier with the use of their credit cards. They are spending less and using cash and debit cards with greater frequency. Good move for consumers but not for credit card companies who make earnings off the debt interest. According to Eileen Serra, President of Chase Card Services, JPMorgan Chase & Co. will be launching their new rewards program this week. The new initiative tagged Ultimate Rewards, is Chase's response to a changing economy and consumers' reduced credit card spending. The new program will award points for every dollar spent that can be redeemed for cash, merchandise, gift cards, dining, or travel expenses. Ultimate Rewards will also award extra bonus points for online purchases at the Ultimate Rewards Mall and airline bookings. The points have no expiration or blackout dates
Initially, Ultimate Rewards points will be tied to Chase's Freedom card and their new Sapphire card. The Freedom card awards a $50 Cash Back after the first purchase; earns 1% cash back on every purchase; have no spending tiers or earning caps; special bonus on purchases made through Chase's online shopping; and no annual fee. Chase's new Sapphire credit card awards 10,000 bonus points after the first purchase; has all the benefits of the Ultimate Rewards program and have no annual fee. Chase expects to integrate additional cards into the Ultimate Rewards down the road. Longtime Freedom credit card contracts will be phased into the new program. The transition is expected to be completed by the end of the year. With the new terms, Freedom customers will earn a 1% cash back for every dollar spent and 3% cash back for special rotating categories.
For Freedom cardholders that prefer a fixed 3% spending bonus, Chase will be offering the card for a $30 annual fee. Additionally, Sapphire Preferred cardholders will be offered a card that will allow users to transfer points among other reward programs for a $95 annual fee. As consumers continue to reduce spending and credit card defaults begin to taper off, consumers can expect to see additional banks entering the market with new rewards program to compete with Chase's Ultimate Rewards.