9/13/16, 12:55 PMChase Sapphire Reserve Goes Viral | PYMNTS.com

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ConsumersAreEmbracingPremiumCards —DespiteHigh Costs

By PYMNTS ! "

Posted on September 13,2016

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NEWS OPINION DATA & RESEARCH INDEXES TRACKERS MATCHMAKERS# !'

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Product hysteria is not the

sort of thing that normally

attaches itself to credit

cards, but as scores of

message boards and

YouTube unboxing videos

will attest, consumers are

having a rather atypical

reaction to the Chase

Sapphire Reserve card. The

card has been so popular

that JPMC ran out of the

fancy metallic stock the

card is made from — forcing

some disappointed users to

live with plastic temporary

cards for a few weeks.

Like many premium cards

with rich rewards, the price

per annum for these cards

is steep — $450. But

ground once trod by only a

handful of issuers — most

notably, American Express

— has now become more

open to players hoping to

compete for the spendier

customers more likely to

whip out the plastic to pay

for travel and dining

experiences.

“American Express used to

have a stranglehold on the

9/13/16, 12:55 PMChase Sapphire Reserve Goes Viral | PYMNTS.com

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PYMNTS TOPIC TBD

Eliminating ‘Subscription Friction’

high-end market, but folks

like Chase and Citi are

coming hard after their

crown,” said Matt Schulz, an

analyst for

CreditCards.com, a

comparison site. “It’s the

best time in years to shop

for a rewards card.”

American Express’

Platinum charge card

pioneered the premium

category and was the

longtime leader of the high-

cost, high-reward card, but

in recent years, Citi’s

overhauled high-end

Prestige credit card has

gained in popularity

quickly. The card offers

similar benefits to an Amex

Platinum — free hotel stays,

access to airport lounges,

transferable points

redeemable for airfares

and upgrades, as well as

spending incentives to let

customers cash in faster.

Since last year, Chase has

also pushed aggressively

into the market and began

generating talk about a new

card with a 100,000-points

bonus — more than twice

9/13/16, 12:55 PMChase Sapphire Reserve Goes Viral | PYMNTS.com

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most of its competitors.

“It significantly exceeded

our expectations,” Amy

Bonitatibus, a

spokeswoman for Chase,

said of the “tens of

thousands” of cards the

bank has issued so far.

Millennials have

particularly favored the

card, which is a big win

since the generation of

student debt as a group

tends to avoid credit

products.

“If you look at the behavior

of millennials, it’s clear

they’re not going to commit

to a relationship with one

credit card or brand the

way their parents did,” said

David Robertson, the

publisher of The Nilson

Report, which follows the

credit card industry.

Whether the card can hold

out long term depends

largely on the value

proposition it offers

customers and what its

rivals in the arms race at

Amex and Citi do next.

9/13/16, 12:55 PMChase Sapphire Reserve Goes Viral | PYMNTS.com

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RELATED ITEMS: PREMIUMCREDIT CARDS, WHAT'S HOT

But in any event, the

notable numbers to watch

are the overall increasing

numbers of consumers

seeking premium credit

cards. The number of Citi

Prestige cardholders

increased sixfold in the last

18 months, according to a

company spokeswoman,

and American Express said

that its Platinum card

membership is “large,

growing and loyal.”

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Lending

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ClubHas ANewCFO

By PYMNTS! "

Posted onSeptember 13,2016

Embattled marketplace

lender Lending Club has

appointed a new CFO.

Thomas Casey will replace

Lending Club’s longtime

financial chief, Carrie

Dolan, who resigned last

month. Dolan was the first

top executive to depart

Lending Club after the

explosive series of

revelations about

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questionable (and possibly

illegal) underwriting and

investment practices

turned up by an internal

audit of the firm. The

fallout from the

investigation included the

resignation of Renaud

Laplanche, the firm’s

founding CEO, on May 9.

At this time last year,

Lending Club was

considered the standard-

bearer for the rising wave

of alternative lenders

proliferating online

— powered largely by the

rise of mobile and a years-

long credit freeze that left

many consumers and SMBs

scrambling for new sources

of credit.

Changing economic

conditions, including a

slightly increased interest

rate and a notable upswing

in the number of defaults

on the loan platform, have

already started

undermining investor faith

in the alternative credit

marketplace. That

trepidation was greatly

enhanced by the Lending

9/13/16, 12:55 PMChase Sapphire Reserve Goes Viral | PYMNTS.com

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Club conflagration and the

subsequent Justice

Department investigation,

loan investor freeze-up and

mass layoffs.

Now, Lending Club faces

the marketplace more as an

underdog than a coming

conqueror. Last quarter

saw the firm’s biggest

losses in its history as it

struggled to keep qualified,

desirable borrowers on its

platform and lure back

investors spooked by the

various revelations of

impropriety released

earlier this year.

Suffice to say, Casey enters

into a pretty big job. He

comes to Lending Club

from Acelity, where he was

CFO. Acelity is an advanced

wound care and

regenerative medicine

company.

Bradley Coleman, who was

appointed interim CFO

following Dolan’s

resignation, will remain

principal accounting officer

and corporate controller,

the company said on

9/13/16, 12:55 PMChase Sapphire Reserve Goes Viral | PYMNTS.com

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Monday (Sept. 12).

The news had little effect

on Lending Club’s stock

price, which has lost half its

value this year alone.

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COMMENTS

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