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Chase’s Sapphire card created a millennial ‘cult.’ Can it last through COVID?

August 24, 2020, 12:00 PM UTC

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In 2016, a new credit card joined avocado toast as a cultural touchstone for affluent millennials. In bars and brunch spots across the country, they whipped out the Sapphire Reserve, which has a metal heft to match its imperious name.

The card initially gained attention for the unprecedented sign-up bonus: It offered 100,000 points, worth $1,000 in cash or $1,500 in travel. But it soon came to be seen as a marketing coup for its issuer, JP Morgan Chase, as analysts credited the Sapphire Reserve—and its heavy load of travel and dining perks—for turning a new generation on to credit cards. A Harvard Business School professor even wrote a 2018 case study titled “Chase Sapphire: Creating a Millennial Cult Brand.”

Now, in the age of COVID, the Sapphire Reserve brand’s prime selling points, such as triple rewards on travel and dining and free airport lounge access, are suddenly irrelevant for many cardholders. Meanwhile, the annual fee of $550 ($300 of which can be recouped via travel credit) can look prohibitive. Could the coronavirus pandemic put an end to Chase’s “cult?”

JP Morgan Chase does not disclose the number of cards it issues, though it did disclose a renewal rate of more than 90% for the Sapphire Reserve in 2018. That figure, of course, may no longer be a useful marker in the pandemic era, and the company declined to provide Fortune with current data.

According to Jill Gonzalez, an analyst with the consumer finance site WalletHub, the Chase Sapphire Reserve has likely taken a hit.

“While we do not have exact information on the card’s popularity, it would only make sense for it to be less used during the pandemic,” said Gonzalez. “Given its intended purpose, and its high fees, the card may be losing popularity in favor of cheaper cards.”

Gonzalez also noted that the Sapphire Reserve has always been an “elite card”—accessible only to a small percentage of the population who are big spenders with excellent credit. It is still a good choice for those who fit that profile.

Meanwhile, Chase has made a series of changes to the card in an apparent bid to offset the fact that COVID has diminished its usefulness for travel and dining. The company reduced the annual fee to $450 and expanded the range of purchases—including gas—that can be used to obtain the $300 credit.

Chase has also added new perks that reflect the pandemic lifestyle, such as new bonus rewards for purchases like home delivery and streaming services. The company is also letting consumers apply the 50% bonus they receive when spending rewards points for travel to a variety of other items under a “Pay Yourself Back” program.

All of this may persuade at least some Chase Sapphire Reserve customers to hold on to their card even though brunch and airline purchases have become few and far between. And in the longer term, the core appeal of the card is likely to return.

“It’s important to keep in mind that this situation will not go on forever. The virus will eventually be contained, and people will be able to start traveling again without worrying about their health,” says Gonzalez.