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The Most Exclusive Credit Cards

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The Most Exclusive Credit Cards

 
Financial Services
The Most Exclusive Credit Cards
Liz Moyer, 07.20.07, 3:00 PM ET

As a piece of wealth oneupmanship it is barely subtle, but highly effective. You've just finished dinner at the Fat Duck or Gordon Ramsey's place on Royal Hospital Road or the River Café.

 

As the ritual over who pays plays out, you play your trump card--a little purple rectangle of plastic--Coutts' by-invitation-only credit card. It is the one said to be held by celebrities like Victoria "Posh Spice" Beckham and royals, including the queen. It whispers wealth like no other. Game, set and match.

 

And where there is wealth there are bankers. Credit cards for the extremely rich, or at least extremely credit worthy, have become the latest big bank passion in the U.K.

 

Select customers don't just get a status symbol. There are also outlandish perks like access to private jets and personal shopping services for spending hundreds of thousands of dollars using their plastic.

 

 

Everyone is playing catch-up to American Express (nyse: AXP - news - people ), the 800-pound gorilla of high-end cards, with its invitation-only Centurion (aka, Black) card first made legendary by Hollywood types but now to be spotted around London.

 

A recent survey by the Luxury Institute of consumers with a minimum net worth of $5 million and $200,000 in annual income found the Centurion ranked first and the American Express Platinum card second among that well-heeled crowd. "Special access, unparalleled benefits and enhanced customer experience" were cited as the reasons.

 

Of course, just because someone is rich doesn't mean these cards are for them. The Amex Black card carries an annual fee of 1,250 pounds and a minimum annual purchase requirement of 125,000 pounds.

 

The U.K.'s home-grown rival to the Amex Black is Coutts' purple World Mastercard Signia Card. But the field is getting more crowded. Some of the super-premium cards offered by U.S. banks are already available in the U.K. Thanks to London's booming financial sector and the generation of young tycoons it is creating, several more of the high-end cards rolled out in the U.S. last year are likely to find their way to the U.K. before too long.

 

Watch for the arrival of Bank of America's (nyse: BAC - news - people ) new Accolades card, launched last month in the U.S. on the American Express network. It includes a fairly standard set of perks, like access to premium concert tickets, airline rewards programs and the like. Bank of America will waive the annual fee of $295 for customers who stick with its private wealth and investment management division.

 

Banking to the ultra rich is a lucrative business and credit cards are an obvious way into the market for those banks without a pedigree. They can also be profitable in their own right for the issuers. They aren't going to make much in the way of late fees and interest charges (assuming rich people pay their bills on time and in full, which isn't always the case) but they more than make up for it in the fees charged to merchants to process transactions.

 

American Express network transactions mean fees of about 4% each purchase. So, if you charge your new 250,000-pounds Rolls Royce Phantom to your Amex Black, American Express could potentially rake in 10,000 pounds in processing revenue.

 

Even if the issuer takes half of that and pays it back to cardholders in the form of outlandish perks, the profits are still good, says Curtis Arnold, editor of CardRatings.com. But is it a good deal for you? "The bottom line is you have to do a cost-benefit analysis," Arnold said. "Do it just for status? Heck no. That doesn't justify the fee."

 

Message 1 of 5
4 REPLIES 4
Tuscani
Moderator Emeritus

Re: The Most Exclusive Credit Cards

Some cool cards! I think Hooters got cheated though. Smiley Tongue
Message 2 of 5
fused
Moderator Emeritus

Re: The Most Exclusive Credit Cards

Good read. Never heard of Coutts.
Message 3 of 5
Anonymous
Not applicable

Re: The Most Exclusive Credit Cards

I found it mildly entertaining that supposedly sophisticated investors are so vulnerable to blatant marketing glitz of the CCCs.
 
Message 4 of 5
Tuscani
Moderator Emeritus

Re: The Most Exclusive Credit Cards



Noah_Bodie wrote:
I found it mildly entertaining that supposedly sophisticated investors are so vulnerable to blatant marketing glitz of the CCCs.
 



That's actually very entertaining. Smiley Happy Maybe that is part of what makes them a savvy investor.
Message 5 of 5
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