Credit Card Rewards and Income Segmentation: Travel Points Toward The Affluent

There has been a lot of recent news about card reward programs and their targeting of the premium market. American Express and Chase are enhancing their flagship Platinum card and Sapphire Reserve cards. (For more information on these two programs, see Amex and Chase Face Off on Premium Credit Cards, but the Backstory is More Interesting.) These are cards with large introductory bonuses, robust rewards, and high annual fees that target higher-income households. The logic is straightforward: higher-income customers are more likely to spend more, and this spending generates valuable credit card interchange revenue for the issuer and fee revenue for the card network.

Companies Mentioned:

American Express, Bank of America, Chase, Delta Airlines, U.S. Bank