Black is better

pms laflame at aaahawk.com
Fri Jun 28 22:38:09 PDT 2002


FT MONEY - PERSONAL FINANCE: Black is the new gold for discerning shoppers By James Mackintosh Financial Times; Jun 29, 2002

Black is set to become the new colour of money, at least for the rich.

A new breed of credit card designed to recreate the snob value that led Yuppies to stock their wallets with gold cardsin the 1980s is on the way. Thepremium cards - being designed or launched by virtually all the big card issuers - come with a range of unusual benefits. But, also unusually, they will cost hundreds of pounds a year to run.

This week NatWest launched the first of the black cards. Its annual fee is ý250 and it is marketed on the basis of its snob value, with the catchline: "discretion and exclusivity". To underline this exclusiveness it is only available to those earning more than ý70,000.

Barclaycard Black will follow later this year, and is currently being tested for people with minimum incomes between ý30,00 and ý60,000.

The new cards are an attempt by mainstream banks to trade on the success of American Express with its invitation-only Centurian card, the ý650-a-year charge card that happens to be black.

Mike Wilson, chief executive of life assurer St James's Place Capital and a holder of the Amex Centurian card, says he is sometimes teased by his friends about the ostentatious display of wealth that the black card represents.

But there is no doubt that the card's personal assistant service - also offered by NatWest - is useful. "One night at nine o'clock I wanted some tickets to Marbella, and they phoned back and it was done," he said. A test by Mr Wilson this week proved less successful, however. Trying to get a table at the Ivy - one of London's top restaurants - with one day's notice failed to lead to a posh dinner.

At least as an Amex card-holder he could jump to the head of the queue for cancellations. For everyone else the restaurant claims to be booked until December.

It is hard to put a value on such a service, particularly before testing it extensively. But other advantages of the cards can be assessed easily enough. NatWest Black comes with three main benefits in addition to the 24-hour concierge service: free access to more than 300 executive lounges at airports, full family travel insurance and Europe-wide membership of the Green Flag breakdown service. NatWest claims these benefits would cost ý470 a year. The travel insurance, which includes full cover for dangerous sports, would cost far more than ý100. But to justify the ý250 annual fee customers would have to be happy to switch to the Green Flag from their current roadside assistance, and put a value on the access to airport lounges, which many frequent travellers will already have. With an interest rate of 14.9 per cent better deals are available for borrowers, while the Air Miles reward scheme is only a little better than the ordinary NatWest Air Miles card.

The Amex Centurian card offers far more, but it costs almost three times as much. Regular diners at the Savoy will find they get a free bottle of champagne with their Amex black, while free companion tickets or upgrades are available on many airlines and access to some private clubs can be had with the card.

What about the snob value? Back in the status-conscious 1980s, the sign of success was a gold card. Today, gold cards, and their successor the platinum card, are available to people earning less than the national average wage and little can be inferred about the holder.

It would appear that black cards could go the same way, losing their prestige value as they become mass-market. Barclaycard Black offers fewer benefits than the other black cards and, although its design is not yet finalised it is clearly going to be much cheaper than the NatWest card, with ý30 and ý40 annual fees on test.

Peter Murray, director of acquisitions and development at MBNA, another big card issuer, insists consumers like cards that say something about them

"There is an element of snob value," he admits. But nowadays it is as good to be seen with something that offers good value for money as it is to carry something aspirational."



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