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Chase to reduce bonus points offered with popular Sapphire Reserve card

Ever imagine that people would be rushing to sign up for a credit card with a $450 annual fee? They have been, though they won't be able to for much longer.

Ever imagine that people would be rushing to sign up for a credit card with a $450 annual fee? They have been, though they won't be able to for much longer.

In August, when Chase rolled out its Sapphire Reserve credit card, it paired the card with an extraordinary incentive: 100,000 bonus rewards points for spending $4,000 on purchases within three months of opening the account. Chase said the rewards could add up to as much as $1,500 applicable toward travel if redeemed through Chase Ultimate Rewards.

In early January, however, the company noted on its website that the 100,000-point incentive will soon be gone, replaced with a 50,000-point perk. The 100,000-point bonus will be available through March 11 only to those applying at bank branches - not online.

Points don't expire if an account is open.

There's no doubt the card stood out in a crowded landscape. Buzz was big, and the card went viral before Chase did any marketing. At one point, it ran out of the card's metal stock and sent out temporary plastic cards until more of the handcrafted, embossed metal cards were available.

In December, JPMorgan Chase & Co. CEO Jamie Dimon told investors that the card had been doing great, and that Chase would have to account for the cost. Dimon said then that the Sapphire Reserve card would reduce the bank's profit by $200 million to $300 million in the fourth quarter.

So is Chase reducing the bonus because the card was too successful? Are we likely to see far smaller bonuses in the future? Not necessarily, according to some credit-card experts.

"The reduction in the Chase Sapphire Reserve introductory bonus was inevitable. The 100,000-point sign-up bonus was only a temporary offer," said Greg McBride, chief financial analyst for Bankrate.com.

If you're shopping for a credit card, always consider how you'd use the points, how much you typically spend, and what kind of points you'd build over time. One resource: the Points Guy.com, owned by Bankrate.com, which lists some of the bonus rewards being offered and tips on how best to use travel-related cards.

Chase says on its website that the Sapphire Reserve card's interest rate on unpaid balances ranges from 16.24 percent to 23.24 percent, based on creditworthiness. These rates will go up should the prime rate climb.

Is the Sapphire Reserve card worthwhile? If you're trying to put a lid on spending right after the holidays, it might present too many temptations.

The fine print: You won't earn the 100,000 rewards points with a balance transfer or cash advance. And you'll pay another $75 a year for each additional card for other users.

Then again, this deal could work for consumers who know for certain they'll spend $4,000 in the first three months of having the card.

"The bonus more than outweighs the annual fee," said Bill Hardekopf, CEO of LowCards.com. "If you wanted to, you could then cancel the card before you are hit with the second-year annual fee of $450."

McBride noted that the card may still be worth keeping for many consumers. The $450 fee is partially offset by a $300 annual travel credit applied to your account for travel purchases on your card.

The Sapphire Reserve card pays three times the points on travel and dining purchases, compared with double the points on those categories with the Chase Sapphire Preferred, which has a $95 annual fee. On other purchases, you earn one point per dollar on both Reserve and Preferred.

Chase notes that travel is defined relatively broadly for the triple-points rewards, including using the card for tolls and taxis.

Hardekopf said consumers often like to use bonus points and rewards on airline tickets or hotel rooms. But they can be disappointed by the limited number of rooms or flights available under some rewards programs, or they're only able to use rewards for a certain hotel or airline.

"What happens if the hotel down the street has a much better rate when you want to take your trip? Your rewards are not very rewarding at that time," he said.

For that reason, some consumers prefer cashback programs. And there are plenty of those, too.

Hardekopf points to the Citi Double Cash card, which pays 1 percent when you make the transaction and 1 percent when you pay Citi for the purchase. These rewards apply for all purchases.