INTRO: When most people think of credit cards, they
think of debt, high interest rates, and predatory lending.
This is not surprising when you consider that on average, Americans carry of $6,194 worth
of credit card debt.
So, from their perspective, credit cards have always been this sort of boogey man that results
in them overextending themselves and them paying the price for years.
But, contrary to what Dave Ramsey says, credit cards don’t have to be a bad thing.
Most credit cards offer cash back, rewards, flexible return policies, fraud protection,
the ability to build your credit score, and so much more.
And if you use these cards correctly, you can actually profit quite a bit.
This is especially true with American Express cards which operate on a fundamentally different
basis to traditional credit cards.
Many Amex cards don’t even allow you to carry a balance meaning that you have to pay
off your entire balance every month.
This is because charging stupid high interest rates is not Amex’s top prioirity.
Instead, Amex makes most of their money from charging merchants higher fees and charging
card holders an annual fee.
When applying for credit cards, you may have seen credit cards with fees in the hundreds
of dollars, but those are just the cards that are offered to us peasants.
The highest tier most exclusive Amex card is called the Centurion card also known as
the black card.
This card is invite only and is only offered to the biggest businessmen and celebrities
in the world.
But, just because you’re invited doesn’t mean you get card.
You actually have to pay a $10,000 initiation fee along with $5,000 every year that you
have the card.
But despite this insanely high fee, the Amex Black is by far the most sought after card
in the world.
So, why are people willing to pay so much for a piece of plastic, or I guess metal,
and what do you even get from owning this elite card?
AN URBAN LEGEND: Before we get into the perks of the card itself,
I think we should take a look at the history of the card because its quite unique.
It’s not like Amex had an idea to create this super elite card that came along with
first class services.
Rather, the origin of the black card can actually be traced back to urban legends.
It all started in May of 1988 when the Wall Street Journal ran a story theorizing the
existence of an exclusive black card.
The publication didn’t make their sources clear, but apparently, Amex had been experimenting
with a VIP card that was only offered to their wealthiest and must trustworthy clients.
According to the Journal, less than 1000 customers were offered this card and it was only available
for a mere four years before Amex cancelled the program.
When the card was available though, the perks were really just up to your imagination.
Did you forget to book a reservation at a fancy restaurant?
Well, just call Amex and they’ll take care of it.
Did you forget your jacket at your hotel room?
Well, just call Amex and they’ll take care of it.
Did you get lost in the desert?
Well, you know the drill, just call Amex and they’ll take care of it.
As you can see, the Amex black wasn’t a card with set in stone benefits.
It’s not like you get 8% back on gas and 10% back on groceries and 15% back on flights.
In fact, you couldn’t even be charged on the card directly.
Rather, charges would be routed to your Amex platinum, gold, or green accounts.
So, the card more or less just gave you the ability to call Amex and put in requests.
But, all of this was just the Wall Street Journal’s theories and speculation.
The only proof they had in support of the black card even existing was a statement from
an Amex spokesman named Lee Middleton. Lee confirmed the existence of the black card
and claimed that it was only offered to customers with a “substantial banking relationship”
with Amex.
Lee went onto claim that the program was indeed cancelled because “It just wasn’t worth
keeping it up.”
Lee wrapped up his statement by suggesting that the new Amex platinum card offered 95%
of the services that the black card did, so there was no reason to continue offering the
black.
Despite this final statement, many Wall Street Journal readers wanted the black card anyway.
And over the next several years, we saw more and more stories covering the alleged perks
of this card.
Soon enough, the black card became an urban legend amongst finance and business nerds.
But the ironic part is that the card likely never even existed.
But, wait a minute, didn’t the spokesman basically confirm all of the Wall Street Journal’s
speculation.
Well, yes he did, but there’s also evidence that he was lying.
You see, in 1999, Amex would actually launch the Centurion Card, and the director of Amex
Europe, Doug Smith, would come clean about it.
Doug said quote, “There had been rumors going around that we had this ultra-exclusive
black card for elite customers.”
“It wasn’t true, but we decided to capitalize on the idea anyway.”
So, it looks like Lee was just leaning into speculation to create hype for the company,
and a story from Jerry Seinfeld would further verify this.
If you’re not familiar with Jerry, he’s an extremely famous comedian who was the face
of Amex in the early 1990s.
And during one of his shoots, a crew member would ask Jerry if he had a black card.
Unfamiliar with the card, Jerry would ask what is the black card?
The crew member would reply that it was a super exclusive card that was only issued
to three people in the world.
Apparently, one was given to the sultan of Brunei, one was given to the president of
Amex, and the crew member was speculating that the 3rd one was given to Jerry.
Jerry obviously didn’t have one so he would put this rumor to rest, but as you would guess,
he was quite curious.
So, he called the president of Amex the next day to ask about the Amex black and here’s
what the president replied.
"It's just a rumor.
It doesn't exist.
But you know what?
It's not a bad idea."
So, it looks like Lee was indeed just hyping up the company, but Amex would eventually
answer these urban legends by launching the card for real.
PERKS: Now that the Amex black is actually a real
thing, it comes with a slew of defined benefits starting with elite status at hospitality
brands.
The card comes with IHG Platinum Elite, Hilton Honors Diamond, Marriot Bonvoy Gold, and Relais
& Chateaux 5C.
In terms of travel, you get Delta SkyMiles Platinum Medallion status which includes priority
waitlisting, priority check in and boarding, and courtesy upgrades.
If you have this card though, waiting at the airport probably wouldn’t be that bad anyway
because you get access to the global lounge collection.
This includes lounges that are branded Centurion, Amex, Priority Pass, Escape, Delta Sky Club,
Plaza Premium, and Air Space.
You also get an invitation to Hertz Platinum status and Avis President’s club.
Aside from travel benefits, you get a bunch of retail benefits as well.
For example, you get to be part of the Centurion Shopping Program.
And you also get 1.5X membership points on purchases over $5,000, but honestly, none
of these perks are really that special.
The Amex Platinum card has most of the same perks and it has better rewards as well.
For example, the Amex Platinum offers 5X membership points on flights and prepaid hotels.
Now, it’s not like the Amex Platinum is cheap given that it costs $695 per year.
But, it’s just a fraction of the cost of the Amex Black and it comes with all of the
same tangible benefits.
So, if you’re just looking to churn credit cards and earn rewards, there’s abosoluetly
no reason to get the black.
The only reason to get the black is if you’re looking for VIP service and this is where
the black really shines.
And I think the best way to really understand the caliber of the VIP service is by simply
looking at stories.
Take Chinese billionaire Liu Yiqian for example.
Liu is an avid art collector and often buys paintings that are worth tens of millions
if not over a hundred million.
But instead of writing a check or completing a wire transfer to buy these paintings, Liu
likes to put it on his Amex card.
One time, he put a $36 million tea cup from the Ming dynasty onto his Amex.
But, by far his most outrageous credit card purchase was a $170 million painting.
This purchase alone would’ve earned him 170 million Amex membership points.
Depending on how he redeemed these points, he could get $1.7 million to $3.4 million
worth of rewards thanks to this purchase.
Not to mention, Amex allowed him to bypass Chinese transfer laws.
You see, China doesn’t allow its citizens to transfer more than $50,000 out of the country
in any given year.
But, since Liu charged it on a credit card, he technically wasn’t transferring any money
out of China, he was just paying off his credit card.
I suspect that that the CCP wasn’t that happy to hear about this purchase.
Aside from approving crazy large purchases, Amex also bends to basically any customer
desire as long as it’s not illegal of course.
You could say they live by the motto: And believe me, they get some ridiculous requests.
For example, this one Amex Black client was staying on a private island when they ran
out of ice cubes.
Instead of getting more ice from their beach house or just drinking the rest of their drink
without ice, the client decided to call Amex and ask for ice.
And sure enough, Amex ended up flying out a bag of ice to the client on a helicopter.
This other client asked Amex to deliver flowers to 8 girlfriends in 4 different states and
3 different countries.
And Amex of course ended up doing it.
While there are some crazy stories of people abusing the system like this, the vast majority
of cenutrion customers don’t actualy make such requests.
More times than not, they just want their entire travel experience to be taken care
of and streamlined.
These guys don’t want to think about booking flights and hotels and making restaurant reservations
and travel arrangements and so on.
They like the convenience of calling Amex and telling them where they wanna go and what
they wanna do and have Amex take care of the rest.
And given that many of these guys are extremely frequent travelers, such a service is invaluable
to them.
GETTING A CENTURION CARD: Hearing all of that, I’m sure that getting
an Amex centurion card is likely a goal for some of you ambitious souls out there.
So, how exactly do you go about getting the black card?
Well, at first glance, it might seem like you have to be a billionaire or celebrity,
but this is not actually true.
Really, it just comes down to spending a lot of money on Amex cards.
No one really knows what the threshold is for Amex to consider you.
Some estimates say that you have to spend $250,000 per year while others say that you
have to spend a million per year.
To be honest, I don’t think there is a threshold per se, and each approval is likely given
on case by case basis.
For example, if you have some sort of notoriety from being an actor or singer or something
like that, you can probably get approved with lower spend because giving you the card would
likely give Amex some exposure as well.
But, if you’re a background businessman that owns a couple of car dealerships or something,
you probably have to have much higher spend to get an invitation.
Regardless of your status though, if you consistently spend a boat load of money as in half a million
or more per year, chances are, you’ll get an invitation.
Something to keep in mind though is that if you’re just trying to get the card for status
or clout though, the card is probably not for you.
The true purpose of the card is to getting valuable concierge services, and if these
services don’t really apply to you, you’re just burning money on the annual fee for a
bit of attention.
Not to mention, the type of attention that you get from owning such a card is not exactly
the type of attention that you want.
Sure, it might be cool amongst your friends and family and business acquaintances who
will be impressed and happy for you.
But, whipping out such a card at Walmart is likely not the best idea.
So, just make sure you’re getting the card for the right reasons, but that’s just what
I think.
Would you guys get a Centurion card?
Comment that down below.
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