Comprehensive Analysis of Chase and Bank of America’s Loyalty Programs Financial Impact, Growth, and Lessons for Implementing Gamification with ACHIVX

JimmJimm
14 min read

1) JPMorgan Chase — “Ultimate Rewards” (Sapphire, Freedom, co-brands)

Program design & mechanics

Chase’s loyalty value engine is Ultimate Rewards (“UR”), used across Sapphire Reserve / Sapphire Preferred, no-annual-fee Freedom products and co-brands. UR combines:

  • Earning: category multipliers (e.g., dining/travel), portal bonuses, and partner accrual on co-brand spend.

  • Redemption: cash back; travel portal redemptions (historically with uplift multipliers); and 1:1 transfers to airline/hotel partners, which materially raises perceived point value for engaged customers.

  • Ecosystem strategy: households often stack a no-fee Freedom (to harvest rotating 5% categories) with a Sapphire (to unlock transfers and premium travel protections), concentrating share of wallet at Chase.

Launch of Sapphire Reserve in Aug. 2016 is the modern inflection point: a 100k-point signup bonus, rich travel/dining multipliers, and a flexible $300 travel credit created a surge in high-spending, travel-savvy customers. See Chase’s launch PR: https://media.chase.com/news/chase-reinvents-luxury-credit-card-sapphire-reserve media.chase.com. Within months, mainstream press highlighted cost pressure from the generosity of rewards and early incentives; WSJ reported internal concerns about profitability one year in, after the program’s wildly successful uptake: https://www.wsj.com/articles/sapphire-reserve-cards-arent-very-rewarding-for-j-p-morgan-1501239601 The Wall Street Journal. Contemporary coverage pegged the initial offer’s cost to JPM at $200–$300 million for the earliest wave of acquisition (Investopedia recap): https://www.investopedia.com/news/chase-sapphire-card-perks-costing-company-millions-jpm/ Investopedia

Chase continues iterating (including 2025 changes to Sapphire Reserve that rebalance earn/benefits and fee levels), reflecting the ongoing economics of a mature, high-engagement portfolio:

“Before vs. after” — growth and impact

  • Before (pre-2016): UR existed, but Sapphire Reserve did not. Chase had a strong card business, but the premium travel segment was dominated by Amex Platinum and Citi Prestige.

  • After Sapphire Reserve launch (2016–2017): rapid take-up—outside reporting described application volume smashing targets (e.g., HBS case references and contemporaneous reporting note the 100k bonus and demand surge):

    • Launch PR (Aug. 23, 2016): https://media.chase.com/news/chase-reinvents-luxury-credit-card-sapphire-reserve media.chase.com

    • Background summaries of the initial wave highlight extraordinary early adoption and material acquisition costs (WSJ, Investopedia above).

  • Ongoing: Chase’s card machine has stayed industry-leading by spend/volume, and the UR brand remains a flagship attractor of affluent/digital customers (reflected in continued product refreshes in 2025 to sustain economics). Program health shows up in the bank’s financials through card revenue growth, scale and net interchange—even as reward costs and partner payments have risen materially with spend.

What Chase actually spends on loyalty (audited)

JPMorgan uniquely discloses a clean, auditable “Card income – components” table that breaks out interchange & merchant processing, Rewards costs and partner payments, and an “all other” line. This is the most direct view of a U.S. megabank’s rewards budget.

Annual rewards budget (JPMorgan, firmwide; $ in millions)

From JPM’s 2024 Form 10-K (Note 5), “Reward costs and partner payments” were:

  • 2022: $22,248

  • 2023: $24,641

  • 2024: $26,784
    10-K PDF (see the “Card income” components table in Note 5): https://www.jpmorganchase.com/ir/annual-report/2024/ar2024.htm (open PDF: https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/2024-annualreport.pdf ). Direct excerpt location (Note 5) shows the three-year series and definitions. JPMorgan Chase

Interpretation: That’s a ~20% two-year increase in annual rewards and partner payments (2022→2024), broadly consistent with robust spend growth and competitive rewards intensity across the industry.

Quarterly rewards budget (most recent quarter)

From JPM’s Q1 2025 Form 10-Q, “Rewards costs and partner payments” were $6,785 million for the three months ended March 31, 2025 (vs. $6,171m in Q1’24). The same note shows interchange/merchant processing of $8,398m (Q1’25), so you can see how much of gross interchange is returned to cardholders/partners via rewards. Source (Q1 2025 10-Q PDF; Note 5 “Card income” table): https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2025/1st-quarter/corp-q1-2025.pdf — see the Note 5 Card income table showing the $6,785m line. JPMorgan Chase+1

Takeaway: JPM reports these costs transparently: ~$26.8B in 2024 and $6.8B in Q1’25 alone. That is the audited, explicit “rewards budget” (including co-brand partner payments).

Economics & accounting notes

  • Where do rewards “sit” in the P&L? JPM reports card income net of rewards, so “Reward costs & partner payments” reduce reported “Card income.” This is consistent with ASC 606 guidance for considering cardholder rewards as consideration payable to a customer/partner. JPM’s definitions of “Rewards costs” and “Partner payments” are included in its SEC filing glossary for clarity. Q1 2025 10-Q definitions: see the glossary excerpt (e.g., p. 174 of the PDF): https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2025/1st-quarter/corp-q1-2025.pdf . JPMorgan Chase

  • Program refreshes in 2025 (changed earn, fee, credits) reflect the balance banks strike between customer value and rising reward costs. Over time you see E(R) (expected reward rate) tuned while preserving high-value redemption paths (UR partners), to maintain breakage and lifetime value dynamics at sustainable levels. Coverage: Thrifty Traveler and OneMileAtATime, above. Thrifty TravelerOne Mile at a Time

2) Bank of America — “Preferred Rewards” (tiered relationship loyalty across banking, cards, Merrill)

Program design & mechanics

Preferred Rewards (PR) is a relationship-tier program that boosts card rewards and reduces fees based on combined balances across Bank of America deposit accounts and Merrill investment accounts. It’s a loyalty platform across products (not just a credit card program), designed to:

  • Incentivize customers to consolidate balances with BofA/Merrill,

  • Cross-sell borrowing and investing, and

  • Increase stickiness via escalating benefits.

Key features today: five tiers (Gold, Platinum, Platinum Honors, Diamond, Diamond Honors), with 25%–75% card rewards bonuses, interest rate boosters on savings, fee waivers, and loan discounts. Official program page (with tier thresholds and benefits): https://promotions.bankofamerica.com/preferredrewards/en promotions.bankofamerica.com+1. Recent explainers comparing tiers and boosts (Forbes Advisor; TPG):

  • https://www.forbes.com/advisor/credit-cards/bank-of-america-preferred-rewards-program-review/ Forbes

  • https://thepointsguy.com/credit-cards/bank-of-america-preferred-rewards-program/ The Points Guy

Program inception: BofA launched Preferred Rewards in 2014 to unite disparate card-level perks into an integrated relationship program and differentiate vs. standalone card competitors (background coverage: The Financial Brand profile): https://thefinancialbrand.com/news/checking-accounts/bank-of-america-preferred-rewards-credit-card-cash-back-retention-deposit-106155/ The Financial Brand

“Before vs. after” — growth, retention, cross-sell

  • Before (pre-2014): BofA offered multiple rewards constructs across cards; no unified, balance-tiered framework linking checking/savings, cards and Merrill.

  • After (2014→2021): Membership grew substantially. In BofA’s 2021 annual report (“Driving Responsible Growth”), Preferred Rewards memberships reached 9.4 million with 99% retention (a standout number in retail banking): https://investor.bankofamerica.com/2021-annual-report Bank of America Corporation

  • Today (2024–2025): BofA executives continue to cite 11+ million members and ~99% retention in program retrospectives (10-year anniversary interviews):

    • Let’s Talk Loyalty episode with BofA’s head of Consumer & Small Business product strategy referencing 11M members, 99% retention and flagship merchant partnerships like Starbucks: https://letstalkloyalty.com/bank-of-americas-preferred-rewards-program-669/ and mirror: https://australianloyaltyassociation.com/lets-talk-loyalty-bank-of-americas-preferred-rewards-program-669/ Let's Talk Loyaltyaustralianloyaltyassociation.com

    • Additional 2025 explainer (Upgraded Points) detailing five tiers and how the 25–75% card bonus works: https://upgradedpoints.com/finance/bank-of-america-preferred-rewards/ UpgradedPoints.com

Interpretation: Preferred Rewards is arguably the most successful relationship-loyalty program among U.S. retail banks by scale and retention. The “before vs. after” effect shows up in membership scale (9.4M→11M+), sustained near-total retention (~99%), and in BofA’s cross-sell/fee-waiver architecture designed to pull balances in and reward primacy.

What Bank of America spends on loyalty (what is and isn’t disclosed)

Unlike JPM, BofA does not routinely present a simple “rewards costs and partner payments” breakout in a public “Card income components” table across all filings. Here’s what we can anchor to in audited sources:

  • BofA’s SEC reporting aggregates rewards in “Card income” under noninterest income, reported net of rewards and partner payments (i.e., rewards reduce the reported revenue line). The bank’s Form 10-Q (Q1 2025) shows Card income increased year-over-year to $1.297B (Q1’25 vs. $1.272B Q1’24). See the Q1 2025 10-Q (Marketscreener mirror), which summarizes segment results and the card income figure: https://www.marketscreener.com/quote/stock/BANK-OF-AMERICA-CORPORATI-11751/news/Bank-of-America-Form-10-Q-for-the-first-quarter-2025-49782163/ . BofA’s EDGAR landing page (for primary filings): https://www.sec.gov/edgar/browse/?CIK=0000070858 . MarketScreenerSEC

  • Annual view: BofA’s Annual Report 2024 hub (with 2024 10-K) is here: https://investor.bankofamerica.com/2024-annual-report and the Annual Reports & Proxy library here: https://investor.bankofamerica.com/annual-reports-and-proxy-statements . These materials describe preferred rewards growth, but do not disclose a standalone “rewards budget” dollar amount comparable to JPM’s “Rewards costs & partner payments” line. Bank of America Corporation+1

Bottom line on BofA budget disclosure:

  • Per quarter: BofA does not separately present “rewards costs & partner payments” at the consolidated level in the way JPM does. Rewards are netted into the ‘Card income’ line.

  • Per year: Same. There is no annually published, single line item that equals “loyalty program budget” across banking + cards.

  • However, industry comp pieces help with context: the six biggest issuers (JPM, Amex, Citi, Capital One, BofA, Discover) collectively spent $67.9B in 2022 on reward redemptions and partner payments, up 23.7% YoY (CardRates research roundup referencing issuer reporting): https://www.cardrates.com/news/credit-card-reward-redemption-statistics/ . This situates BofA among peers with very large reward outlays, even if its specific amount isn’t separately public. CardRates.com

Why the disclosure gap matters: If you’re benchmarking “program budgets,” JPM’s filings offer the cleanest visibility. For BofA (and many others), you infer intensity from (a) program structure (PR’s 25–75% card-bonus is generous), (b) scale (11M+ members), (c) retention (~99%), and (d) overall card revenue and spend growth. But you cannot cite a precise, audited “rewards expense” number per quarter/year from BofA’s public financials the way you can for JPM.

Comparative Analysis: design choices, KPIs, financial outcomes

2.1 Loyalty architecture: platform vs. points hub

  • Chase UR is a points currency hub with partner transfers—a “travel loyalty platform” masquerading as bank cashback. Its power is in optionality and outsized redemption value (transfer to airlines/hotels), which attracts high-spend segments who will optimize. This drives very high rewards engagement, but also means higher reward costs as spend scales (JPM’s rising “rewards & partner payments” shows this directly).

  • BofA Preferred Rewards is a relationship status system, not a pure points play. Card rewards lift 25%–75% is tied to assets held with the bank/brokerage. That makes BofA’s program a weapon for deposit and AUM primacy, reducing churn and broadening margins through the total relationship (net interest, Merrill fees, loans). The reward “cost” is partly an investment to attract sticky balances, not just a card P&L lever.

Implication:

  • Chase’s UR maximizes spend capture and travel-rewards utility—great for interchange economics and partner ecosystems.

  • BofA’s PR maximizes share-of-wallet across products—great for lowering customer acquisition cost per product and lifting lifetime value via multi-product penetration.

2.2 “Before vs. after” with dates and metrics

  • Chase: Post-2016 (Sapphire Reserve) the brand captured a premium travel demographic; even with cost concerns (2016–2017), the portfolio’s sustained scale is visible in the $26.8B rewards & partner payments in 2024 and $6.785B in Q1’25 alone, which reflects both cardholder volume and competitive generosity.
    Sources:

  • BofA: Pre-2014 there was no PR. From launch (2014) to 2021: 9.4M members and ~99% retention per BofA’s 2021 report; in 2024–2025, exec interviews cite 11M+ and the same retention. That’s a textbook example of loyalty driving relationship entrenchment at national scale.
    Sources:

    • 2021 Annual report highlight (9.4M/99%): https://investor.bankofamerica.com/2021-annual-report Bank of America Corporation

    • 2024/2025 interview highlights (11M+/99%): https://letstalkloyalty.com/bank-of-americas-preferred-rewards-program-669/ and https://australianloyaltyassociation.com/lets-talk-loyalty-bank-of-americas-preferred-rewards-program-669/ Let's Talk Loyaltyaustralianloyaltyassociation.com

    • Program detail page with tier thresholds/bonuses: https://promotions.bankofamerica.com/preferredrewards/en promotions.bankofamerica.com

2.3 Budgeting and quarterly cadence (what you can and can’t compare)

  • Chase (JPMorgan) is the gold standard for transparency in rewards budgeting among majors. You can quote:

  • BofA reports Card income (net), not the granular rewards expense split, in quarterly and annual statements. Example: Q1 2025 “Card income” $1.297B vs. $1.272B prior year quarter (Marketscreener mirror of the 10-Q): https://www.marketscreener.com/quote/stock/BANK-OF-AMERICA-CORPORATI-11751/news/Bank-of-America-Form-10-Q-for-the-first-quarter-2025-49782163/ ; EDGAR company page: https://www.sec.gov/edgar/browse/?CIK=0000070858 . MarketScreenerSEC

Practical comparison tip: To benchmark across issuers, use:

  1. JPM’s explicit “rewards & partner payments” as a proxy for industry rewards intensity;

  2. For BofA (and others who net rewards), look at program structure (PR 25–75% boosts), scale/retention, and changes in card income and customer balances to triangulate the effectiveness and likely magnitude of investment. For macro context, see the $67.9B (2022) six-issuer total for reward redemptions/partner payments: https://www.cardrates.com/news/credit-card-reward-redemption-statistics/ . CardRates.com

2.4 Customer behavior & enterprise value

  • Chase (UR): Drives spend concentration and attracts travel-centric consumers who value transfer partners. That amplifies interchange revenue and keeps the portfolio highly engaged—but with a corresponding rise in rewards costs as the bank competes to stay “top of wallet.” The audited spend on rewards confirms the scale. JPMorgan Chase+1

  • BofA (Preferred Rewards): Ties rewards to balance tiers, powering multi-product adoption and deposit/AUM consolidation. This raises retention (~99%) and share of wallet—the bank is effectively trading incremental reward boosts for a more profitable, longer-lived relationship across lending, investing, and payments. Program threshold details are public here: https://promotions.bankofamerica.com/preferredrewards/en ; membership and retention results here: https://investor.bankofamerica.com/2021-annual-report and here: https://letstalkloyalty.com/bank-of-americas-preferred-rewards-program-669/ . promotions.bankofamerica.comBank of America CorporationLet's Talk Loyalty

3) Concrete figures table (quick reference)

Chase (JPMorgan):

  • Annual rewards budget (“Rewards costs & partner payments”):

    • 2022: $22.248B

    • 2023: $24.641B

    • 2024: $26.784B
      Source: 2024 Form 10-K, Note 5 (“Card income” components): https://www.jpmorganchase.com/ir/annual-report/2024/ar2024.htm (PDF: https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/2024-annualreport.pdf ) JPMorgan Chase

  • Quarterly (Q1 2025) rewards costs & partner payments: $6.785B; Interchange & merchant processing: $8.398B; Total card income (net): $1.216B. Source: Q1’25 Form 10-Q Note 5 table: https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2025/1st-quarter/corp-q1-2025.pdf . JPMorgan Chase+1

  • “Before & after” inflection: Sapphire Reserve launch (Aug. 2016) created a step-change in UR’s premium segment penetration. Launch PR: https://media.chase.com/news/chase-reinvents-luxury-credit-card-sapphire-reserve ; profitability debates one year later: https://www.wsj.com/articles/sapphire-reserve-cards-arent-very-rewarding-for-j-p-morgan-1501239601 ; early acquisition cost range: https://www.investopedia.com/news/chase-sapphire-card-perks-costing-company-millions-jpm/ . media.chase.comThe Wall Street JournalInvestopedia

Bank of America:

  • Preferred Rewards membership & retention:

    • 2021: 9.4M members; ~99% retention (annual report highlight): https://investor.bankofamerica.com/2021-annual-report .

    • 2024–2025: 11M+ members; ~99% retention (executive interview, 10-year anniversary): https://letstalkloyalty.com/bank-of-americas-preferred-rewards-program-669/ ; duplicate summary: https://australianloyaltyassociation.com/lets-talk-loyalty-bank-of-americas-preferred-rewards-program-669/ .

    • Program details (tiers/bonuses): https://promotions.bankofamerica.com/preferredrewards/en . Bank of America CorporationLet's Talk Loyaltyaustralianloyaltyassociation.compromotions.bankofamerica.com

  • Card income (Q1 2025): $1.297B (reported net of rewards). Source (10-Q mirror): https://www.marketscreener.com/quote/stock/BANK-OF-AMERICA-CORPORATI-11751/news/Bank-of-America-Form-10-Q-for-the-first-quarter-2025-49782163/ ; EDGAR: https://www.sec.gov/edgar/browse/?CIK=0000070858 . MarketScreenerSEC

  • Industry context (issuer reward outlays): $67.9B in 2022 across the six largest issuers (incl. BofA): https://www.cardrates.com/news/credit-card-reward-redemption-statistics/ . CardRates.com

4) Strategic takeaways (why these two are “most successful”)

  1. They built loyalty into the entire consumer banking strategy, not just “a card promo.”

    • Chase made UR a currency with flexible, high-value redemptions and a network of partners; it’s a destination.

    • BofA made Preferred Rewards a status system that monetizes primacy across checking/savings, Merrill, loans and cards.

  2. They accept high, recurring rewards costs as strategic capex for lifetime value.

    • JPM’s audited spend proves that loyalty is a multi-billion-dollar annual investment, and still judged worth it given the growth and engagement of the franchise. JPMorgan Chase+1

    • BofA’s PR trades reward boosts for balance consolidation, delivering retention and multi-product penetration that should support margins across the holistic relationship, even if the exact “rewards spend” line isn’t broken out.

  3. They constantly tune the exchange rate (earn rates, fees, statement credits, transfer values, benefits).

  4. They publish enough data to learn from—but only JPM gives a clean rewards expense figure.

    • For advanced benchmarking, copy JPM’s reporting model (explicit “Rewards costs & partner payments”). If you’re a bank designing a CFO-friendly loyalty program, push for this level of disclosure so product leaders and finance share a common language.

5) What this means for a business implementing loyalty & gamification — the ACHIVX angle

Both case studies illustrate that loyalty is an enterprise system, not a coupon. To build a scalable, finance-grade program you need:

  • A modular platform: support multi-asset tiers (like BofA), multi-channel points (like Chase UR), real-time accrual, partner catalogs, and gatekeeping rules (tiers, boosters, caps).

  • Governance & reporting: the ability to publish JPM-style dashboards (rewards expense, partner payments, redemption mix), reconciled to the general ledger.

Where ACHIVX fits:
ACHIVX (open-source) provides a flexible loyalty/gamification core you can tailor to your industry without locking into one vendor’s black box. For a business (bank or non-bank) seeking Chase/BofA-like control:

  • Open-source transparency → finance and engineering can audit how points, tiers, and bonuses are accrued, redeemed, expired, and accounted for, mirroring the JPM-style transparency you’d want for CFO and auditors.

  • Gamified engagement → layer quests, streaks, status challenges, and bonus ladders on top of transactional earning—very similar to how BofA adds tier boosters or Chase adds portal multipliers.

  • Partner ecosystem support → design partner-funded offers and co-brand structures; ACHIVX can model partner payments as a separate ledger item so you can report like JPM’s “rewards costs & partner payments” split.

  • Enterprise-grade accounting → map loyalty accounting to ASC 606 concepts (deferred revenue/loyalty liability; consideration payable to a customer; breakage).

  • Portability & extensibility → because ACHIVX is open-source, you can keep your redemption catalog, tier rules, and valuation math in your control—critical if you ever reprice earn rates (like Chase’s 2025 adjustments) or add new tier benefits (like PR’s Diamond Honors).

Explore: https://achivx.com

Conclusion

If you’re looking for the two most successful U.S. bank loyalty exemplars right now, JPMorgan Chase and Bank of America stand out for different reasons:

  • Chase perfected a points currency with premium-travel utility that customers obsess over—and it spends heavily to keep that machine running ($26.8B in rewards & partner payments in 2024; $6.8B in Q1 2025 alone). Audited sources:

  • Bank of America built a relationship-loyalty platform that fuses banking and investing into a single status ladder. The program’s scale (from 9.4M members and ~99% retention in 2021 to 11M+ today) demonstrates durable stickiness and cross-sell power even if rewards expense is reported net within card income.

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InvestopediaAmerica’s Loyalty ProgramsJ.P Morgan Chase & Co. Bank of America ACHIVX

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Jimm