JPMorgan Chase found itself absorbing an avalanche of sign-ups for the Sapphire Reserve credit card earlier this year, as points junkies flocked to the promise of the card’s lucrative benefits. Now the bank will have to account for the cost of its 100,000-point bonuses for new card holders—to the tune of $200 million to $300 million in this quarter alone. According to Sanford C. Bernstein & Co., JPMorgan may not break even on the card until 2022.
For JPMorgan Chase CEO Jamie Dimon, that steep acquisition price is worth the short-term profit hit. “The card has been doing great,” he told investors yesterday.