Black, gold, titanium: Are elite credit cards worth it?
"When shopping for a credit card, always look for one with no annual fee."
Sound familiar? It should. Paying the bare minimum for plastic is one of the standard directives among personal finance experts, and in general it's sage advice. Elite credit cards, however, are the exception to the rule (see "Elite credit card comparison chart"). Depending on your lifestyle and circumstances, paying extra for such accounts can make sense. Find out if these specialized products are worth the price of admission.
Elite cards, defined
Credit card issuers offer many types of accounts, each designed to match its diverse customer base. Some are for those just starting out, others are for people with poor credit and still others are for those with good, established credit histories. If you're in the latter group, you'll probably be eligible for a low fee card that also allows you to earn points for airline miles, cash back and other rewards. However, if your credit rating is outstanding and you are both a high earner and big spender, you could be eligible for an elite credit card, which provides far more extreme benefits. Not all financial institutions issue such cards, but many do, including American Express, Chase, Citi and Barclays Bank.
Whether the card is black, gold, platinum or sports an enigmatic name, all elite cards share some common traits:
- An annual membership fee, often costing hundreds of dollars or more.
- Programs and services not available to holders of "regular" credit cards.
- Available only to a select group of preferred customers.
Bear in mind that the annual fee is not punitive, as it would be if the bank deemed you a risky borrower. Rather, it covers the cost of a wide array of expensive perks. "There is a card hierarchy," says Mona Hamouly, an American Express spokeswoman. "These are top-tier products. The benefits define the card." Still, some accounts are particularly pricey, as illustrated by the ultra-exclusive American Express Centurion card, which is constructed from genuine titanium. Cardholders pay a one-time $7,500 joining fee and $2,500 annually. In contrast, the company's platinum card (made of standard plastic) is a mere $450 per year.
The benefits of prestige
So what do you get for the privilege of holding such a rarified credit card? That depends on the issuer and card-type, but most programs include:
- Generous travel benefits, such as airport club access, hotel and resort upgrades, late checkouts and helpful travel experts.
- Access to private sales and personal shoppers at high-end retailers.
- Concierge services, including help with dinner and entertainment reservations, event planning, and personal shopping assistance.
- Exclusive tickets to sports and performing arts events.
- Heightened warrantee protection on purchases.
- Hard-to-get reservations in trendy restaurants.
- Upgraded rewards points redeemable for luxury products and upgraded airline seating.
In the case of the Centurion card, cardholders are privy to some serious VIP treatment. In addition to the standard package of elite card perks, cardholders enjoy sky-high charging power, a client service staff that caters to the extravagant whims of its affluent members, and entry to experiences unavailable to the general public, such as hobnobbing with the stars at private events. The exact perks that the card offers are kept secret by the American Express staff and aren't publicly advertised. But American Express spokeswoman, Elizabeth Crosta, says that the experiences the card offers are uniquely tailored to each individual cardholder.
Does it make sense to pay more?
To determine if moving up to the next credit card level is a good idea, first determine whether an inexpensive rewards account will suffice. Many banks issue cards with no annual fee that also come with excellent customer service, heightened insurance and warrantee protection and a decent load of enticing travel and shopping rewards.
I have very good credit, as does my business, so using the elite card allows us to do more and work faster with a larger credit line.
|-- Bob Venero
Future Tech Enterprise CEO
Still want or need the extras only associated with elite accounts? Review the fee-based credit cards on the market, analyze the perks of each and compare them to their annual cost. Choose right and it is possible to come out ahead if you maximize the benefits. For example, if you travel extensively and want to relax in members-only airport clubs, find out how much the airline's membership charge is. (It's usually around $400 per year, which is just about the price of the average elite credit card.) According to Dan Nainan, a professional comedian and actor who is frequently on the go, his Delta Gold card is worth its weight in -- well, you know. "My prime motivation is the airline club. It's luxurious. And if I had to pay, it would be the same price of the card, so why not?" Since he's a frequent flier, being regularly upgraded to first-class seating is another strong advantage.
These premium products may have cachet, but their benefits are practical for many cardholders. "Some people may get an elite card for status, but I actually use my card for normal business transactions, as well as for personal use, such as vacations and large purchases for my home," says Bob Venero, CEO of Future Tech Enterprise Inc. in Holbrook, N.Y., who holds a Barclays Bank Visa Black card. "I have very good credit, as does my business, so using the elite card allows us to do more and work faster with a larger credit line."
Qualifying for above-the-fray cards
Even if you do want a super-special card, getting one is not guaranteed. Part of their appeal is their exclusivity, and they are only offered to a small group of hand-picked customers. While credit issuers are not specific about exactly who qualifies for these products and why, there are a few standards to know before applying. Your credit rating needs to be stellar, and you should have a history of charging expensive purchases. A high income is also important, as most issuers require a potential cardholder to have a salary that's comfortably in the six figures. If you do not fit these criteria, don't bother completing the paperwork, and certainly don't apply randomly since an overabundance of inquiries will take your credit score down a few notches.
Oh, and if an ultra exclusive card such as the Centurion card sounds fabulous, forget applying at all. Membership is strictly by invitation only and they'll come to you if you meet their standards.
In the end, remember that whatever precious metal or substance the cards are made from or named after, all are payment tools, and it would be a waste of money to pay for extras that don't fit your lifestyle. If you travel infrequently, charge sparingly, shop well independently and aren't interested in cocktailing with celebrities, then conventional wisdom prevails: go for the low-fee account. "What's critical is that you choose the right card," says Hamouly. "One card does not fit all."
Here's a rundown of seven of the top elite credit cards and their perks:
|CHART: COMPARE MAJOR ELITE CREDIT CARDS
||Annual fee / APR
|American Express Platinum Delta Sky Miles
||$150 / 15.24%-19.24%
||Annual complimentary companion travel certificate. Earn one mile for virtually every dollar charged. Redeem Delta miles for award travel with Delta or over 15 airline partners. Guaranteed hotel late arrival. Car rental loss and damage insurance. $100,000 in travel accident insurance. Medical, legal, financial, or other emergency assistance when traveling more than 100 miles from home. Directions to English-speaking medical and legal professionals, emergency cash access, help with lost luggage and passports. Baggage insurance plan. Extended warranty plan. Theft and accidental damage protection for up to 90 days from the date of purchase.
||$450 / Charge card; NA
||Travel service available 24/7. Cardholders, their immediate family or up to two traveling companions receive complimentary access to such airline clubs as American, Delta, and US Airways. Access to a team of specialists dedicated full-time to planning and booking private jets, villas and yachts. Concierge consultants can arrange dinner and entertainment reservations, assist with event planning, and locate and arrange delivery of hard-to-find items. Access to in-demand sporting, culinary and performing arts events. Advance tickets and preferred seating and special added benefits, such as special entry to food festivals and VIP packages at concerts. Card members earn one point for every dollar charged.
|American Express Centurion
||$2,500 + $7,500 one-time joining fee / Charge card; NA
||All the benefits of the Platinum card program, but with more extreme customer service and other rewards. American Express declined to share the exact perks that are offered to new members. In fact, even some American Express employees aren't let in on the secret, says American Express spokeswoman Elizabeth Crosta. "While I cannot share the specifics of the card, I can tell you the Centurion card member enjoys the highest level of American Express benefits and services," wrote Crosta in an email. The card "presents a variety of exclusive benefits and memorable experiences that are tailored to personally reflect each member's specific lifestyle and tastes."
|Chase J.P. Morgan Palladium
||$595 / Applicants must call Chase at 877-626-5995 for pricing, terms
||Smart chip technology that makes it easier for frequent travelers to use their card all over the world. Easy transfer of rewards points to frequent travel programs, plus no booking restrictions or blackout dates on rewards-funded travel. Emergency evacuation or repatriation assistance. Travel insurance, including emergency accident or sickness coverage, primary auto rental coverage, baggage delay or lost luggage coverage and trip delay or cancellation coverage. A 24-hour concierge to help cardholders make travel arrangements, score theatre tickets or call for dinner reservations. Cardholders can also earn one rewards point for every dollar spent and double points on eligible travel purchases.
|Citi Executive AAdvantage World Elite
||$450 / 15.24%
||American Airlines Admirals Club membership providing access to 40 Admiral clubs around the world for immediate family members or up to two traveling guests. Priority check-in, boarding and airport screening. No blackout dates on rewards funded travel. No preset spending limit. Travel insurance, including auto rental coverage, lost luggage coverage, trip cancellation or trip interruption coverage and travel accident coverage. Travel and emergency assistance. Access to Citi Price Rewind, which helps customers search online for lower prices and reimburses the difference. Cardholders also earn two miles per dollar spent on eligible American Airlines purchases and one mile per dollar spent on other purchases.
|Barclays Visa Black
||$495 / 14.99%
||The card is made with carbon, creating, says the application, "a more unique card guaranteed to get you noticed." Concierge professionals available 24/7 to assist with hotels, restaurants, health clubs, sports entertainment, golf and shopping. Conference service referrals and arrangements, emergency translation services, computer rental, and audio/visual equipment referrals and arrangements. Cardholders receive foreign protocol information, car rentals, limousine and car service, flight information, reservations and ticketing. Travel accident insurance worth $250,000 provided. Reimbursement for expenses up to $300 per ticket in the event of baggage delay for the emergency purchase of essential items, meals and lodging. Warranty registration and extended warranty protection that doubles the original manufacturer's warranty up to one additional year.
|Ameriprise Financial World Elite MasterCard
|$150 / 13.99%
Up to $200 annual airline credit that can be used on any travel-related purchase. 24/7 concierge to help cardholders book tickets for events or make dinner reservations. Exclusive access to high-end shopping rewards, unique dinners and "once in a lifetime experiences." Travel assistance, including legal and medical referrals, lost luggage assistance, roadside assistance, pre-trip destination information and premium offers from selected service providers. Travel insurance, including trip delay coverage, trip cancellation or interruption coverage, lost or damaged luggage coverage and rental car coverage. Access to MasterCard PriceAssure, which monitors prices for flights booked in advance and credits future ticket purchases if a price drops on a flight. Cardholders also earn one rewards point for every dollar spent.
|Source: CreditCards.com research, Dec. 21, 2012. To report an update, email Editors@CreditCards.com
See related: Who owns the rewards on a company credit card?, Tracking rewards program changes before they happen, Are credit card rewards taxable?
Updated: December 24, 2012
Three most recent Reward programs stories:
- Road to rewards redemption gets easier – Cardholders lose millions of dollars in rewards, but that could be changing after one big issuer lowers hurdles to claiming cash back ...
- 6 rules for 'card flipping' – While "flipping" cards to take advantage of promotional deals can lead to free travel and other perks, if you don't play the game correctly, you can trash your credit ...
- Buying a car with a credit card often an uphill fight – Using a credit card to buy a car could give you consumer protections and perks. But most dealers hate the fees that go with accepting plastic, so you might have to wheel and deal ...