The Chase Sapphire Reserve was one of the most popular credit cards of 2016. It was so popular that Chase ran out of metal cards to print them on, after demand exceeded expectation.
Despite the many perks that make the annual fee reasonable, we wanted to see what type of people were willing to pay $450 upfront for a credit card.
The original data was compiled via survey on reddit (r/churning) by u/aksurvivorfan. The raw data from the survey (available here) and charts (available here) included all application datapoints (successful, pending, denials) but I wanted to drill down into instant approvals and make it easier to interpret the data (charts for credit score, 5/24 status, stated income, etc. were difficult to interpret).
We took the data (>2,500 datapoints from 8/21/16 to 11/16/16), filtered it, and used a bunch of Excel formulas to filter the data for charts. You can see all of this here.
There are two major biases that can play a role:
1. Self-reporting bias: All of this is user submitted, so people can lie. Given this specific community and it’s goals (helping people maximize credit card points), there would be no value in lying on an anonymous survey.
Source bias: The other potential issue is that the source of the data was from Reddit which typically skews younger. The Pew Research Center estimates that the most likely Reddit user is a 18–29 year old male. The average from the dataset was 29.7 years old, with 28% >32 years old.
Unless Chase decides to make their data public, this is the best source of data we have for Chase Sapphire Reserve approvals.
From the dataset, the Chase Sapphire Reserve was extremely popular in California, New York, and Texas.
This isn’t a surprise given the large populations from these three states. 22.3% of approvals came from California, 10.9% came from New York, and 7.5% came from Texas. Together, California, New York, and Texas represent 40.7% of all approvals from the dataset.
The top 10 states with the most approvals include: Illinois, Washington, Florida, Virginia, New Jersey, Pennsylvania, and Massachusetts. The top 10 states represent 65% of total approvals.
Successful applicants to the Reserve had an average credit score of 789.
If we look at the scores by 50 point increments, we see that 53.2% had credit scores between 750–799. 22.7% had credit scores ≥800.
Despite the high average credit score, people with lower scores were still approved. 20.1% had scores between 700–749.
Diving deeper — 10 point increments — we see that most approvals from the <750 range come from 720–729 (5.6%) and 740–749 (6.8%).
With 10 point increments, most people had scores between 800–809 (12.4%) and 750–759 (11.8%).
Using the New York Time’s definition of millennials (as anyone born between 1981 and 1997) — basically everyone between 20 and 36 years old — the data says that 87% of Reserve approvals were to millennials.
The average age for Reserve approvals was 29.7 years old.
If we look at 2 year increments, we see that the Reserve was most popular among 26–27 (17.1%), 24–25 (16.6%), and 28–29 (16.2%). This range, 24–29, accounted for 50% of all approvals.
Given the flexibility of the $300 travel credit — things like Uber and UberEATS count as travel — it’s understandable why this is a popular card among millennials (who also happen to be the most frequent rideshare users).
Before applying to the Chase Sapphire Reserve, 53.1% of applicants already had the Chase Sapphire Preferred. The difference in effective annual fees is $55 ($450 — $300=$150 for the Reserve vs. $95 for the Preferred) making the cost to upgrade more reasonable.
For people who added the Reserve, it makes sense to product change their — now obsolete — Preferred to a Freedom ($0 annual fee).
The Chase Freedom was the second most popular card, with 43.7% of people already holding it. This makes sense given how the Freedom’s 5x category bonus compliments the Reserve’s 50% bonus for travel redemptions. If you’re saving your points to redeem this way, you’re effectively getting 4.5% back from your Reserve on meal and travel and 7.5% from your Freedom for the quarterly categories (gas stations for Q1 and grocery stories for Q2).
The American Express Platinum, another $450 per year premium credit card, comes in 3rd with 11.2% (14.9% if we include other variations from #10). People are likely willing to hold onto two $450 annual fee cards because the Platinum offers perks like the Centurion Lounge and access to box office prices for things like Hamilton.
The Chase Sapphire Reserve’s initial signup bonus of 100,000 Ultimate Reward (UR) points is worth between $1,000 and $2,000 depending on how you redeem them.
If you chose to redeem them for cash (via statement credit), you’ll get 1 cents per point (CPP), or $1,000 in value.
If you book travel through the portal, you’ll get 1.5 CPP, or $1,500 in value.
If you’re willing to transfer the points out to one of Chase’s travel partners (like Southwest, Korean Air, or Singapore Airlines), you can get 2 CPP, or $2,000 in value.
55% of people were planning to use their points on multiple trips, focused on quantity rather than quality. 32% were focused on luxury experience, like redeeming the points for first class tickets.
Only 8% of people were intending to use the points towards cash back.
People who were approved for the Reserve had an average stated income of $118,549.
Although this seems abnormally high, it’s important to remember that cohabiting couples can enter their combined incomes when applying for credit cards. Stated income also includes things like investments or income derived from other sources (i.e., if you’re over 21 and regularly use income from others — like a parent — you can include it).
From people who were approved for the Reserve, 24% had a stated income ≥$150,000 while 23.1% had stated a stated income of $50,000-$74,999.
6% of approvals had a stated income <$50,000.
Cards in the Last 2 Years
Before getting the Reserve, people who were approved had an average of 3.3 cards in the last 2 years.
21% of successful applicants had 2 new cards in the last 2 years. Only 9% had no new credit cards.
Most surprising is that 11% of applicants who got approved had ≥6 cards. Chase has credit issuance policies — colloquially known as Chase 5/24 — that that automatically reject you for certain cards like the Reserve if you have more than 5 new cards in the last 24 months. The only way around this is if you’ve been pre-approved for the card by Chase’s system.
Number of Chase Cards
Before getting the Reserve, people had an average of 1.9 credit cards issued by Chase.
29.6% of people had 2 cards from Chase and 28% of people had 1 card from Chase.
Interestingly, 14.5% of approvals had no Chase credit cards prior to the Reserve. This is positive news for Chase since it means that the Reserve was able to convert non-credit card customers.
Chase Banking Relationship
One of the reasons financial institutions offer signup bonuses is to cross-sell their other products, like bank accounts and investment accounts.
Only 36.1% of people who were approved for the Reserve had checking or saving accounts at Chase.
63.9% did not have bank accounts with Chase, an huge opportunity to acquire more banking customers for Chase.
The Reserve will likely strengthen Chase’s relationship with new users and old users alike.
28.5% of people who were approved for the Reserve already used Chase for 1–2 years credit, mortgage, or banking services. The second largest group, 25.1%, have used Chase for ≥7.
The Chase Sapphire Preferred was already extremely popular that people carried in their wallet every day. Chase basically created a better version of the Preferred with a better signup bonus. For some people, the benefits were so worthwhile that it would even make sense for them to directly upgrade their Preferred even without the bonus.
Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines or hotel chain, vendors or companies, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
UGC disclosure: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.