Chase’s $795 Sapphire Reserve card signals a shift in the credit card perk wars

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A fresh candidate is vying to become the ultimate first-world problem: Is the new $795 annual fee for the Chase Sapphire Reserve, the first “viral” credit card, still worth it?

It’s a premium cardholder’s dilemma. But it’s also a lagging economic indicator, a sign of the heightened competition for affluent consumers. And a stark reminder of the labor market dichotomy, where things are decent if you have a job and disheartening if you don’t.

That’s another way of getting at how a financial proposition can seem like an absurd agreement to one person but an irresistible deal to another.

Why stress over a few more hundred when the value of the return nets you thousands? What we are also talking about is purchasing power and consumer wealth gaps. It’s what animates much of our national politics and fuels chitchat among friends: the price of eggs, of a Chipotle order, childcare, a car, a mortgage, college, the list goes on (and so do the subscription charges).

For consumers, the higher price comes with a host of rewards and an expanding ecosystem of partner benefits. So the math for what is essentially a tricked-out $800 coupon book can still make sense for you.

It certainly does for Chase (JPM), whose card overhaul underscores greater competition for affluent customers as lenders scramble to out-perk one another. And, with that whopping fee, further attempts to transform the relationship between bank and client and truly turn it into club and member.

On Monday, American Express (AXP) announced it is revamping its Platinum cards (details coming in the fall) with its “largest investment ever” to entice consumers with travel, dining, and lifestyle benefits. Wells Fargo (WFC), newly unleashed from regulatory restrictions, is trying to get in on the action too, unveiling its own travel-focused card as part of an effort to grow its lackluster credit card business.

Something is clearly happening.

For card issuers, one set of valuable customers is those who charge tens of thousands of dollars on their cards, generating swipe fees, and those willing to pony up the annual price tag without exercising the variety of perks.

In a financial sense, customers who optimize for perks but don’t spend all that much aren’t as valuable — which the new fee addresses, making more money off people if they don’t swipe or tap enough and pricing out the low-rollers.