CreditScholar wrote:How would you define the typical profile of someone between centurion and platinum in terms of income, annual spend, etc? Once they raise the bar (and I agree that they will in the medium term), what would they be looking for (other than high FICOs will automatically be assumed)?
I've heard the analogy that "centurion has become the new platinum" many times in recent years.
From what I've seen, there is a considerable gap between a Centurion and Platinum holder today. The former spends at least $100k per year, and most had spent $250k to be invited in the first place, while the latter (these days) is easier to acquire than even their entry level revolver. All things being equal, a Centurion holder will have some of the highest credit scores, annual income of at least low to mid 6 figures, a net worth of at least well into the millions, and must be an upstanding business owner or professional in the community.
Over the years, many of have downgraded from the Platinum to Green after retirement. Unless one's travelling frequently, there is little reason to pay the high Platinum fee. Amex has noticed a significant reduction in not only the Platinum fees received, but the decrease in this groups spending, which has been quite high historically. The beauty of the Platinum card has always been those who pay the fee, but never use the benefits allowing those few who truly use the beneft to maximize the value of the fee--this is the singular beauty and value of the Platinum card. I'd say roughly 80 - 85% of the people who pay the Platinum fee hardly ever use the benefits which allows Amex to transfer this value to the few who do use them.
This works wonderfully well. However, with the amount of people now cancelling their Platinum cards, Amex has no choice but to reduce the criteria hoping to take in enough fees to continue offering the superior benefits (int'l and domestic travellers) to the 10% who use the card. Most Platinum holders have the card only for the benefits, and hardly charge on it. For instance, most of our business charges will go on the new blue card which confers a 30% MR bonus after year 3, but we'll hold the Platinum for all the travel benefits which they've become known.
I sense that many who travel less frequently, but have the Platinum for the prestige have soured on it's image since in recent years Amex has relaxed the approval criteria significantly to drive up the fee revenue which is vital to maintain the superior benefits, since spending revenue is very low on this card. I'm not making judgements here, but there are those who will find the card less prestigious when they realize their waiter (not to diminish the service professions here, but for a lack of a better example) has a Platinum too with a $2,000 hard limit. Once this veil of exclusivity is pierced, those Platinum holders who don't utilize the benefits (which is the overwhelming majority) will refuse to pay the $450 seeking a card with a higher prestige.
I think this is where Chase has a golden opportunity with the Palladium card. These users who will invariably purge their Platinum cards have not done so if only because they don't qualify or are not invited for the Centurion. If the Palladium can offer some more features with a higher approval requirement (say, min income of at least $100k and min 750 Fico), I think they'll take a signficiant share of the current Platinum card holders who have the card mainly for prestige, but think they will, but have never used the benefits.
What do you think? In all the years, Chase has been the first issuer I've seen to seriously pose a challenge to Amex.
