I’m tempted to let that headline speak for itself … but I suppose I’d better explain myself.
For four decades and counting, Costco has kept that tried-and-true combo of a 1/4-pound hot dog with a soda at $1.50, inflation be damned. It’s a surefire money-loser for the warehouse club … by design: a beloved staple that gets people in the store, renewing their memberships, and spending much more than $1.50 every visit.
With some massive (and mostly positive) changes coupled with another massive (and undeniably positive) 100,000-point bonus after spending $5,000 in the first three months, Chase just copied that strategy with its already uber-popular *chase sapphire preferred*.
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Consider this. Chase just added:
- Another $50 in hotel credits for a total of $100 – exceeding the card’s annual fee right off the bat
- A $120 credit to cover the entire cost of Global Entry, TSA PreCheck, or NEXUS
- A year of free Apple TV+, another $100 in value
- 3x points at gas stations and EV charging
- 3x points on Airbnbs, VRBOs, and other home rentals
- Even more robust travel protections by adding emergency evacuation and transportation
… all on a card with a $95 annual fee that isn’t moving an inch. That is laughably, unprecedentedly lucrative for such a cheap card – enough for most to offset the pain of losing 1:1 points transfers to Hyatt.
And that’s before you consider another record-setting. Add another $1,000 (or much more) in value to that running tally.
Chase is going to lose gobs of money on this card, and it’s not just me saying that.
“The breakeven point on a $95 annual fee card with a (100,000-point) welcome offer bonus is never,” David Gold, a longtime loyalty maven and the architect of both Chase Ultimate Rewards and Amex Membership Rewards ecosystems, once said.


So what’s the play here? Is Chase just setting money on fire for the fun of it?
Chase’s goal isn’t really to have you just open the Preferred Card. The bank is playing the long game here.
Unlike American Express and virtually every other credit card-issuing bank out there, credit cards are a tiny fraction of J.P. Morgan Chase’s business. It’s an investor platform, mortgages, auto loans, savings and checking accounts, and more.
So for Chase, the souped-up Sapphire Preferred is a strategic play – a way to get millions of new customers in the door with a no-brainer travel card. From there, Chase can start the upsell game.
Maybe you’ll upgrade to or open the *chase sapphire reserve* in a few years. If you eventually start a small business, you’ll surely give the bank’s Ink cards a hard look. When it’s time to buy a house, there’s a mortgage waiting for you. This is the long game.
Bank relationships are sticky. I bank with the exact same institution I opened an account with at 15 years old, and I bet you do, too. Chase absolutely knows that – and that the best way to build a life-long relationship is to start with a card that people will love from Day 1.
Part of me wonders whether Chase is making up for lost time here, too.
There’s been an undeniable buzz around American Express after revamping both the *amex gold* as well as the *amex platinum* over the last year and change. Sure, Amex is leaning even harder into the coupon book mentality that we can’t say we love … but they’ve proven to be incredibly popular with the younger Millennials and even Gen Zers that banks and credit card companies desperately need.
Chase and its botched rollout of the new-look Reserve Card last summer? Not so much.
What better way to get back on travelers’ radar than throwing in tons of new benefits and a six-digit welcome bonus? Not to mention, Chase is also throwing out the kitchen sink with eye-popping offers on several business cards, too.
I’m getting a reputation around the office for strange meat-related analogies, which is either a very good or a very bad thing. But I stand by this take.
The Chase Sapphire Preferred is the $1.50 Costco hot dog of travel credit cards. And that’s a compliment.
This story originally appeared in our free daily newsletter, The Extra Mile – sign up now to get stories you won’t see here, exclusive deals, and more in your inbox every weekday!

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