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Possible changes coming to the Chase UR program

Frequent Contributor

Re: Possible changes coming to the Chase UR program

It surprises me that Chase, in its zeal to reduce costs, has chosen to devalue a benefit that retains the loyalty of current cardholders, yet they show no sign of reducing the huge signup bonuses for new cardholders.  This tells me that they value new customers over the current ones.  They can't complain about churning if their own rewards structure encourages churning.

In my wallet: Chase Sapphire Reserve • PenFed Power Cash Rewards
Also have: Chase United MileagePlus Explorer • UNFCU Azure • NFCU cashRewards • NFCU Go Rewards • PenFed Promise
Message 11 of 81
Valued Contributor

Re: Possible changes coming to the Chase UR program


adelphi_sky wrote:

I think Chase could also cut off their nose to spite their face. The CSR was driven by these same users. The whole UR program was also a winner even before the CSR came on the scene. You change that, you run the risk of losing a large population that you just won over.


Oh, I have no doubt that would run the risk of losing a large population they just won over, insofar as the "credit card travel hacker" population is large. My point is that they wouldn't mind losing that population because it is a population, they have decided, is costing them too much. I doubt Chase ever intended to be bankrolling high-end vacation packages for relatively new customers who have used their more expensive products for only a short period of time.

 


adelphi_sky wrote:

Remember, this generation isn't as brand loyal as their parents. They will respond negatively because there ARE other options out there. They realize that banks aren't necessarily for their best interest and if the benefits stop, they move on. Look at how many people started jumping ship from the AMEX Platinum until Amex was forced to up its game? Now is not the time to start removing benefits just as other card issuers are upping their game to better compete. Again, Chase runs the risk of massive customer loss if this change goes bad. The current UR program made the $450 AF for the CSR worth it. Remove the one thing that makes having the CSR worth it, and you reverse the popularity you created last year. 


Yup, and once again my point is that the popularity they created last year is what Chase would like to reverse, at least among "travel hackers." Chase created the CSR to compete with the Amex Platinum, not to fund vacation packages for customers who are admittedly not loyal. They may have succeeded a bit too much and that success is costing them more than they would like.

 

You are also absolutely right that there ARE other options people can go to, but as Irish noted at the beginning of this thread, none of them provide this type of... shall we say... game-a-bility with their lineups. Chase is calculating, correctly, that this specific advantage will not be available anywhere else their customers can move to.

 

The only thing I would disagree with you about is that Chase runs the risk of "massive customer loss". Travel hackers may be 'massive' enough to cost Chase enough to make them consider these changes, but I doubt they are numerous enough to cost Chase "massive" loss in total number of customers they serve. I do think people overestimate their power as the "online travel [hacking] community."

 

At the end of the day, this is not about loyalty. No one should expect it to be. Not Chase, and not consumers. It's about competition. Chase is merely removing a competitive advantage no one else in the market provides and one it sees as costing too much, and making the bet that there are still enough remaining advantages it will fish out the travel hackers without much of a "mass exodus."

Message 12 of 81
Valued Contributor

Re: Possible changes coming to the Chase UR program


UpperNwGuy wrote:

It surprises me that Chase, in its zeal to reduce costs, has chosen to devalue a benefit that retains the loyalty of current cardholders, yet they show no sign of reducing the huge signup bonuses for new cardholders.  This tells me that they value new customers over the current ones.  


Sure. And I know plenty of people just here who value their new cards over their old cards the exact same way - in a rush to earn bonuses. What's good for the goose and all that...

 


UpperNwGuy wrote:

They can't complain about churning if their own rewards structure encourages churning.


They're not complaining. They are changing the rewards structure so that it no longer encourages churning as much.

Message 13 of 81
Established Contributor

Re: Possible changes coming to the Chase UR program


yfan wrote:

adelphi_sky wrote:

I think Chase could also cut off their nose to spite their face. The CSR was driven by these same users. The whole UR program was also a winner even before the CSR came on the scene. You change that, you run the risk of losing a large population that you just won over.


Oh, I have no doubt that would run the risk of losing a large population they just won over, insofar as the "credit card travel hacker" population is large. My point is that they wouldn't mind losing that population because it is a population, they have decided, is costing them too much. I doubt Chase ever intended to be bankrolling high-end vacation packages for relatively new customers who have used their more expensive products for only a short period of time.

 


adelphi_sky wrote:

Remember, this generation isn't as brand loyal as their parents. They will respond negatively because there ARE other options out there. They realize that banks aren't necessarily for their best interest and if the benefits stop, they move on. Look at how many people started jumping ship from the AMEX Platinum until Amex was forced to up its game? Now is not the time to start removing benefits just as other card issuers are upping their game to better compete. Again, Chase runs the risk of massive customer loss if this change goes bad. The current UR program made the $450 AF for the CSR worth it. Remove the one thing that makes having the CSR worth it, and you reverse the popularity you created last year. 


Yup, and once again my point is that the popularity they created last year is what Chase would like to reverse, at least among "travel hackers." Chase created the CSR to compete with the Amex Platinum, not to fund vacation packages for customers who are admittedly not loyal. They may have succeeded a bit too much and that success is costing them more than they would like.

 

You are also absolutely right that there ARE other options people can go to, but as Irish noted at the beginning of this thread, none of them provide this type of... shall we say... game-a-bility with their lineups. Chase is calculating, correctly, that this specific advantage will not be available anywhere else their customers can move to.

 

The only thing I would disagree with you about is that Chase runs the risk of "massive customer loss". Travel hackers may be 'massive' enough to cost Chase enough to make them consider these changes, but I doubt they are numerous enough to cost Chase "massive" loss in total number of customers they serve. I do think people overestimate their power as the "online travel [hacking] community."

 

At the end of the day, this is not about loyalty. No one should expect it to be. Not Chase, and not consumers. It's about competition. Chase is merely removing a competitive advantage no one else in the market provides and one it sees as costing too much, and making the bet that there are still enough remaining advantages it will fish out the travel hackers without much of a "mass exodus."


This post does a good job of summing up my perspective on this. There are many users of the CSR (and CSP) who are heavily skewed toward dining/travel spend, and this change would be marginal or even a non-issue for these users. More importantly, those users tend to be the ones who are most profitable to Chase, and those are the users Chase really wants to retain.

 

I see what Chase is doing here not unlike what Delta and United (and now AA) did a few years ago with the great PQD sweep aka "you must now earn status by actually spending money rather than just flying." There was an uproar then, mostly among the mileage runners, who suddenly saw their ability to earn 1K or Medallion status by booking a couple $500 tickets with ridiculous routings die. Those programs are still alive and well today, the upper tiers of the programs are just as good or better, and they're making more money in the process.

 

Chase will go through a similar cleansing if they implement this, but they're seeing it as the smart long-term move.

Message 14 of 81
Contributor

Re: Possible changes coming to the Chase UR program


yfan wrote:

adelphi_sky wrote:

I think Chase could also cut off their nose to spite their face. The CSR was driven by these same users. The whole UR program was also a winner even before the CSR came on the scene. You change that, you run the risk of losing a large population that you just won over.


Oh, I have no doubt that would run the risk of losing a large population they just won over, insofar as the "credit card travel hacker" population is large. My point is that they wouldn't mind losing that population because it is a population, they have decided, is costing them too much. I doubt Chase ever intended to be bankrolling high-end vacation packages for relatively new customers who have used their more expensive products for only a short period of time.

 


adelphi_sky wrote:

Remember, this generation isn't as brand loyal as their parents. They will respond negatively because there ARE other options out there. They realize that banks aren't necessarily for their best interest and if the benefits stop, they move on. Look at how many people started jumping ship from the AMEX Platinum until Amex was forced to up its game? Now is not the time to start removing benefits just as other card issuers are upping their game to better compete. Again, Chase runs the risk of massive customer loss if this change goes bad. The current UR program made the $450 AF for the CSR worth it. Remove the one thing that makes having the CSR worth it, and you reverse the popularity you created last year. 


Yup, and once again my point is that the popularity they created last year is what Chase would like to reverse, at least among "travel hackers." Chase created the CSR to compete with the Amex Platinum, not to fund vacation packages for customers who are admittedly not loyal. They may have succeeded a bit too much and that success is costing them more than they would like.

 

You are also absolutely right that there ARE other options people can go to, but as Irish noted at the beginning of this thread, none of them provide this type of... shall we say... game-a-bility with their lineups. Chase is calculating, correctly, that this specific advantage will not be available anywhere else their customers can move to.

 

The only thing I would disagree with you about is that Chase runs the risk of "massive customer loss". Travel hackers may be 'massive' enough to cost Chase enough to make them consider these changes, but I doubt they are numerous enough to cost Chase "massive" loss in total number of customers they serve. I do think people overestimate their power as the "online travel [hacking] community."

 

At the end of the day, this is not about loyalty. No one should expect it to be. Not Chase, and not consumers. It's about competition. Chase is merely removing a competitive advantage no one else in the market provides and one it sees as costing too much, and making the bet that there are still enough remaining advantages it will fish out the travel hackers without much of a "mass exodus."


I hope it doesn't become a race to the bottom where customers are offered less and less and have to choose between increasingly suckier offers and programs. 

Message 15 of 81
Valued Contributor

Re: Possible changes coming to the Chase UR program


yfan wrote:

UpperNwGuy wrote:

It surprises me that Chase, in its zeal to reduce costs, has chosen to devalue a benefit that retains the loyalty of current cardholders, yet they show no sign of reducing the huge signup bonuses for new cardholders.  This tells me that they value new customers over the current ones.  


Sure. And I know plenty of people just here who value their new cards over their old cards the exact same way - in a rush to earn bonuses. What's good for the goose and all that...

 


UpperNwGuy wrote:

They can't complain about churning if their own rewards structure encourages churning.


They're not complaining. They are changing the rewards structure so that it no longer encourages churning as much.


Why would this discourage churnig?  How much are people making with the current rewards structure? It seems to me that something like the 60,000 point Southwest bonus is going to make more money for the customer than transferring points around and paying annual big annual fees. 

BOA Cash Rewards, AMEX BCE, AMEX PRG, AMEX Ameriprise Platinum, AMEX SPG, CITI AADvantage Platinum, Chase Hyatt, Chase Southwest Premier, Chase Southwest Plus, Barclay Arrival +, Barclay AAdvantage Red Aviator, USAA Prefered Cash Rewards , Cap One Quicksilver, Lendup L card, JCrew, Pottery Barn, Express, NFCU Go Rewards.
Message 16 of 81
Valued Contributor

Re: Possible changes coming to the Chase UR program

We currently transfer my Freedom's UR points plus my wife's CSP and Freedom's point to my CSR.  Neither of us have the Trifecta.  We both use our Freedom's mainly for the 5X categories.  If Chase does go through with this rumored change I will just close my Freedom and move the CL over to my CSR.

 

CSR | Amex Platinum | EDP | QS (2)
Amex Blue Business Plus
Message 17 of 81
Valued Contributor

Re: Possible changes coming to the Chase UR program


frogman1 wrote:

Why would this discourage churnig?  How much are people making with the current rewards structure? It seems to me that something like the 60,000 point Southwest bonus is going to make more money for the customer than transferring points around and paying annual big annual fees. 


To the extent that people want the Freedom and Freedom Unlimited only to transfer their bonuses to the CSR, this change would make that unpalatable, making those people think twice about applying for those cards.

Message 18 of 81
Community Leader
Super Contributor

Re: Possible changes coming to the Chase UR program

Yes these are very bad changes if they do happen...FU becomes useless, Freedom still have a bit of relevance..  Mise well just get rid of the FU as many many other 1.5% if not 2%+ cards out there without AF's.

Chase | Citibank | Amex | BofA | PenFed | NFCU | Discover | Barclay's| US Bank | Fifth Third Bank | FNBO
Message 19 of 81
Valued Member

Re: Possible changes coming to the Chase UR program

Without the Trifecta, the math for CSR will fall apart on a lot of spending profiles. It basically becomes an FU (1.5x) for non-travel/dining spend, but then only if you redeem through the portal. Personally I'd rather just get the 1.5x on everything without portal redeems.

 

Cap One Trifecta (QS, Premier Dining and Venture) is looking better every day.

Message 20 of 81