Credit card super-users take a $330 million bite out of JP Morgan’s revenue


The bank’s recent charge may indicate that consumers are simply getting smarter with rewards programs, according to chief financial analyst Greg McBride. In online forums devoted to credit-card usage, consumers boast about using spreadsheets and smartphone apps to stay on top of their credit.

“There’s a subset of savvy credit-card users who are diligent about maximizing their usage to capture the biggest benefit they can,” McBride said.

These consumers, he said, only use the cards in categories that pay the richest points. For instance, they would whip out a Sapphire card for dining and travel but switch to Chase’s Freedom card to pay for purchases in the rotating category that’s rewarded most, such as gas stations and drug stores.

J.P. Morgan’s Lake said that the recent charge, coming from Sapphire and other cards, is a good thing because it shows how engaged users are.

The cards division has seen strong loan growth, modest charge-offs and record low attrition rates, she said, alleviating fears from some analysts that customers would stop using the plastic after redeeming the sign-on bonus.

Chase’s card customers, especially those picked up in the last couple of years, have strong spending patterns, Lake said. “Engaged customers bring us more spend, they bring us more of their share of wallet.”

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