Savvy Credit Card Users Chase Incentives That Cost Banks Big

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FILE - This Sept. 13, 2014, file photo, shows the Chase bank logo in New York. In an op-ed published Tuesday, July 12, 2016, in the New York Times, JPMorgan Chase said it will give raises to 18,000 tellers, customer service employees, and other workers over the next two years. In the op-ed, JPMorgan Chase Chairman and CEO Jamie Dimon wrote that the bank will raise its minimum pay to a range of $12 to $16.50 an hour, depending on market and location factors. Its current minimum pay is $10.15 an hour. Dimon also wrote that the bank will invest more in training that helps workers get promoted to higher-paying positions. (AP Photo/Frank Franklin II, File)

This week JP Morgan Chase CEO Jamie Dimon told investors that its popular new Sapphire rewards credit card will cost the company hundreds of millions of dollars in profit.

The card came with a 100,000-point sign up bonus, as long as customers spent $4,000 in the first three months. And as banks compete for new credit card customers, the race for lucrative cash-back incentives is also heating up.

Here & Now‘s Jeremy Hobson hears more from Michael Regan (@Reganonymous) of Bloomberg Gadfly.

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