American Express EveryDay. Don’t Bother.

March 12, 2014

 

Tina Fey. Funny for a girl.

Tina Fey. Funny for a girl.

 

A million years ago, the American Express brand meant exclusivity. If you drove a Cadillac, smoked Pall Malls, owned a Curtis Mathes TV, and paid for it all with your American Express card, you were a conspicuously consumptive part of The 1%. And probably sported a monocle and waistcoat. Nowadays, Cadillac makes a model that costs just 10% more than a bare-bones Prius, smoking any brand of cigarette will label you a moron rather than a merchant prince, Curtis Mathes is all but out of business, and any teenager with a college registration can get an American Express card.

That’s by design. American Express still has cachet on the high end, thanks to the Centurion card that MasterCard, VISA, and Discover can only dream about offering and having people take seriously. Therefore, it makes sense that American Express ought to start examining the downmarket schlubs like you and us. Next month American Express releases the EveryDay card, which you know is hip and contemporary because it has a medial capital.

The standard American Express card costs $95 a year and requires you to pay your bill in full every month. But you can easily find a free card from one of the lesser 3 providers, so why bother with an American Express card? Great question, if we say so ourselves. It’s a rhetorical one, which is why American Express offers several co-branded cards (page 30, and just buy the freaking book already), partnering with Costco, Hilton, Starwood, JetBlue, Mercedes and Delta to give you rewards if you buy enough stuff. By the way, all of those co-branded cards except the first 2 come with an annual fee. Which can go as high as $450. But even with the Costco and Hilton cards, the downside is that you might be tempted to patronize a certain corporation even though its competitors are offering you a better deal, just to capitalize on the points. The trick is to not change your behavior – in other words, if you were committed to shopping at Costco or staying at Hilton hotels anyway, you might as well get rewarded for doing so. If Sam’s Club and La Quinta are treating you right, get an American Express Blue Cash card instead. (No annual fee, cash rewards.)

Which is a roundabout way of bringing us back to the EveryDay card. Of course, it has no annual fee, or we wouldn’t be mentioning it and instead would have rejected it out of hand and written about something else today. Here’s what it offers:

  • 2x points for the first $6,000 you spend on groceries in a year.
  • 1.2x points if you make 20 purchases a month.

Fine, we get it. They want you to use the card, which would seem to be the reason for offering it. It isn’t like a gym membership, where they get your money once a year and then hope that they never have to see your fat face until next January.

Our sympathies are with the 7-Eleven clerks who are now going to have to deal with people buying a candy bar, a Slurpee®, this week’s copy of UFC magazine (MMA fans can read?) and a Slim Jim and ask to ring it up as 4 separate purchases. Yes, American Express has already thought of this, and expects merchants to declare that all as a single purchase.

Looking at our own spending habits, we noticed that with our existing American Express card, we covered the 20-item threshold within days. Then again, we’re smart enough to put every single purchase we can on said card. Why? Because whatever we bought, we were going to buy anyway, so why not

  • not worry about carrying cash
  • protect ourselves against fraud (if a merchant screws us, American Express will do all the work of getting us reimbursed)
  • earn the rewards? Again, for no incremental effort.

Paying cash for stuff has its place, but not when the merchants already take American Express.

So if we were to switch to the EveryDay card, we’d get 20% more rewards out of the gate. And the double rewards on groceries. We’re not the Duggar family, so we’ll stay under the $6000 double-reward limit.

There’s one problem, however, and we should have brought this up 4 paragraphs ago.

What’s a “point”? How much is it worth?

We’ll get to that in a second. For now, understand that in and of themselves, “rewards” are stupid. With the listed exceptions, you earn 1 American Express Membership Rewards point for every dollar you spend. You can redeem the points to pay your credit card bill, which is what you should be using generic rewards points for anyway. And if you do, you’ll find that a point is worth about .6¢. In the words of Nelson Muntz, what a rip. Assuming that you indeed buy 20 things a month, American Express is thus offering a cashback rate of .72%. Discover offers 1% as an absolute minimum.

We’ve recommended the American Express Blue Cash Everyday card before, and continue to. The reward payouts are greater than for the EveryDay card, across the board. And yes, it’s confusing that Blue Cash Everyday has “Everyday”, not to be confused with “EveryDay”, in its name.

Blue Cash Everyday offers 3% cash back on groceries, up to the same $6000 threshold. And 2% at gas stations and some department stores. It kicks the new EveryDay card up and down the court. Don’t waste your time.

Filed Under: Credit Cards Tagged With: ,

The VISA Black Card is a Joke

November 1, 2013
The only card you need

The only card you need

 

First, how pathetic is it that VISA can’t even come up with an original idea?

If you’re not familiar, American Express created its mythic Centurion card, known to the proletariat as the “black card”, in 1999. Beyond gold, beyond platinum, beyond californium or whatever the most expensive element in the periodic table now is, the Centurion card was available to such an exclusive subset of American Express cardholders that the company barely acknowledged its existence, let alone advertised it. If you qualified, they’d let you know. They’d also charge you $7500 for the privilege, plus a $2500 annual fee. Even today, in a world where the internet has made secrets scarcer and harder to keep, the card retains as discreet a profile as possible. The card’s website, Centurion.com, is not what you’d call ostentatious.

Even though credit cards have evolved and been democratized, turning from status symbols into mere necessities, the American Express brand still manages to retain some kind of cachet. Looking to challenge that cachet, in 2008 VISA introduced its Centurion competitor – the unoriginally monikered Black Card®. Seriously, that’s what they called it. Imagine Honda calling its new economy car the Bug, or the Cincinnati Bengals calling their end zone bleacher section the Dawg Pound, and you’d have an idea how this dances around the edge of copyright infringement without stepping over.

How about some other, more legitimate reasons why the Black Card (capitalized) is absurd? For one thing, it’s Made of Stainless Steel℠. And yes, they really did go to the trouble of attaching a service mark to that phrase. Exactly how is that a plus? So you can impress the clerk with an authoritative clink while slapping your card down on the marble desk at the Mandarin Oriental? Or is it to garner even more attention from TSA agents while shuffling through the shoeless indignity that is modern American air travel? Either way, that sounds like the opposite of the discretion that most truly wealthy people prefer.

You know what our PayPal accounts are made out of? Nothing. Literally, nothing. Neither are our bank’s wire transfers and direct deposits. If only they were made from (excuse us, “forged”–sounds classier) stainless steel, we’d be enjoying a money-having experience far superior to that endured by the huddled middle class.

Here’s what $495 gets you, assuming VISA selects you to buy your way into Black Card membership:

  • A magazine. Not just any magazine, but “the ultimate luxury guide [that] showcases the finest in travel, fashion, transportation, technology, interior design and art.” It’s for members only, just like the jackets. Again, we have the internet now. If information exists in printed or printable form, it’s available to everyone. Even entry-level cardholders. Besides, magazines, at least at our house, are literally* garbage. (If you want the latest issue of American Rifleman or Vegas Living, you’re welcome to wade through our trash cans.) These days, a magazine is something you buy at an airport newsstand because you want something to read, your Kindle is low on juice, and you can’t be bothered to fish its power cord out of your luggage and find a place to sit that’s near a power outlet. Speaking of airports,

 

  • Visits at “over 350 lounges in 200 cities worldwide.” Wow, that’s more than 1.75 lounges per city. We’re not here to denigrate airport lounges in principle, as sitting with the masses can sometimes be its own punishment. But if you’re spending so much time waiting for connecting flights that this sounds like an agreeable perk to you, then you’re rich enough that you can find a secretary who can reduce your layovers while she books your flights.

 

  • A 24-hour concierge, who can give you “local shopping information” and details on “highlights/sights/exhibitions/shows.” One more time, the internet. If you can afford $495 for a Black Card, you can afford $495 for an iPhone that will tell you what the time in Incheon, South Korea is without having to call anyone. Besides, if you’re that desperate to live the life of the upwardly-immobile-because-you’re-already-at-the-top, shouldn’t you already have a personal assistant at your beck and call? One who will help you with even more intimate problems than a VISA employee with a headset can? “Hi, Janie? It’s Mr. Smith. What’s the name of that guy we called to bury that hooker last time? No, I don’t need another hooker buried. But he also said he could secure some krokodil, and I was feeling more indulgent than usual tonight. I tried the Black Card concierge and she said she was legally forbidden from helping me with this. Bitch. What am I paying her for?”

And, as if the concierge at a call center in Fort Wayne is going to be able to find you a dog groomer in Madrid any better than you can do it yourself.

  • “Global Acceptance. For your convenience, your Black Card is accepted in over 170 countries worldwide with no foreign transaction fees.”

(Just to clarify, that’s for your convenience, and not for your vexation.) Still though, what a perk! It’s not as if every other card with a VISA logo on it isn’t accepted in all those countries.

There’s also a plethora of arcane services that you’re never going to need and certainly wouldn’t be able to justify the $495 purchase of. Like late checkout, which can usually be had by asking the hotel employee nicely. Or “auto rental collision damage waiver,” which you already have if you have car insurance. Or reimbursement for “essential items in the event of baggage delay.” A $3000 laptop doesn’t count as an essential item, either. You get $100 of reimbursement a day up to a total of $300. That’s a lot of dental floss.

Adorably, VISA compares its own shiny apple to a decomposing American Express orange and doesn’t expect people to notice the unfair comparison:

 

Black Card

 

If the folks at VISA didn’t hate us before–after all, they’ve been losing money on us since we first signed up and started our uninterrupted pattern of paying our balances in full every month, as responsible people do–they probably do now. Glad to be of help.

 

*That’s 2 uses of “literally” in this post, both of them accurate and neither of them superfluous.

Filed Under: Credit Cards Tagged With: , , , ,

You Need an American Express Card. Sorry, But You Do.

July 24, 2013

 

 

The doleful saga continues

The doleful saga continues

 

Part of a continuing series in which we repurpose something on a topic we wrote about 3 years ago, which is still a far longer cycle than just about anyone else uses in this ludicrous culture we call personal finance blogging. Right now some debt blogger is writing about her emergency fund for the 3rd time in a week.

We’ve written before about what credit card you should get. A few times. But offers change, as do our recommendations:

You have a bank account, right? They gave you a debit card when you opened the account, because otherwise you’d have to go down to your neighborhood branch every time you wanted money and then wait in line with a withdrawal slip. This is how the world used to operate not that long ago, we swear to God. You’d burn half an hour on a Saturday morning to access money that was yours. Of course, if you didn’t like that you were welcome to stash your cash behind a wall panel at your house instead. The world, or at least the money-procuring part of it, has gotten considerably more advanced since then.

That debit card’s going to be branded VISA or MasterCard. You can get separate VISA or MasterCard credit cards from a lending institution(s) of your choice, in the pretty color scheme of your choice (maybe even with a race car on it! Vroom vroom!!) but doing so seems redundant. Meanwhile an American Express card gives you purchase protection and a bunch of other perks, assuming you’re willing to meet the company halfway and pay your bills on time, thus remaining a cardholder in good stead. So yeah, you need a 2nd card. If you never leave the United States, using Discover for your 2nd card won’t hurt you, but American Express is the way to go internationally. Whip out a Discover card in Moscow or Kigali and the locals will think it’s a kids’ novelty item from a souvenir store.

But which American Express to get? They offer 20 different ones, but we can eliminate most of them right away. Those 20 include 2 prepaid ones (what are you, a teenager?), and 13 with annual fees. Of the remaining 5, one has an indirect annual fee – the Costco-branded card, yours for the asking when you pay $55 for a year of Costco membership. Costco membership is a deal in itself, and your CYC principals are both members. But that’s a topic for another day, and joining Costco doesn’t do you much good if you live in a city without a Costco. (That last clause represents the kind of piercing financial insight we’ve become infamous for.)

So that leaves 4 American Express cards, one of them co-branded:

Blue
BlueCash
BlueSky
HiltonHHonors.

We should clarify that the full title of the card referenced above is BlueCash Everyday®. There’s also a BlueCash Preferred® that has an annual fee. Here are the cards and the differences among them. We were going to do a chart but trust us, with all the qualification and fine print this way is easier:

Sign-up bribe if you spend $1000 in the 1st 3 months

  • Blue         10,000 points
  • BlueSky 7500 points
  • BlueCash $100
  • HiltonHHonors 40,000 HiltonHHonors points, as distinguished from American Express points. And you only have to spend $750.

 

Reward schedule

  • Blue Spend $1, earn a point. Earn double points on flights, hotel stays etc. bought via AmexTravel.com.
  • BlueSky Spend $1, earn a point.
  • BlueCash 1% cash back. 2% at (U.S.) stand-alone gas stations and “select” department stores, and 3% on your first $6000 every year at U.S. (stand-alone) supermarkets.
  • HiltonHHonors Spend $1, earn 3 HiltonHHonors points. You get an extra 2 points at U.S. restaurants, supermarkets and gas stations; and an extra 4 points at Hilton’s own hotels, assuming you’d ever want to do that. Any cocaine kingpin will tell you that you never get high on your own supply. 

 

So what’s a “point”, anyway? With Blue, it’s redeemable for merchandise and not cash. We’d say that that alone should disqualify Blue from consideration, but of course it depends on how much the points are worth. Which is buried on a different American Express site (MembershipRewards.com), and reads as follows:

You can use points in 20,000-point increments to get a $100 credit on your Card Account.

So a point is worth ½¢, which is a joke.

With BlueSky, a point can be worth 1⅓¢, but only on travel purchases, and only in 7500-point increments. Another joke. In the words of Dale Gribble, jokes should start with “Knock knock” or “What do get when you cross a”. Not “Terms and Conditions: Important Notice.”

Meanwhile the BlueCash cash back is available only in $25 increments. Earn $24.99 and you can’t do a thing with it.

As for the HiltonHHonors points, and obviously this is only worth mentioning if you stay in hotels a lot, points operate on a different scale. At the Hampton Inn in McAllen, Texas, at least tomorrow, a Hilton HHonors point is worth .64¢ in room credits. At the Hilton Manhattan East next month, a HiltonHHonors point is worth as little as .27¢.

But don’t forget, you earn the HiltonHHonors points more quickly than Blue (and its variants) cardholders earn American Express points. At least 3 times faster, in fact. Best-case scenario, if you’re buying groceries at the right store and staying in the appropriate Hilton hotels as a matter of course, you can be “rewarded” up to 4 times as generously as the lowly Blue cardholders.

They make this confusing for a reason. To summarize, our position hasn’t changed despite American Express’s new offerings. Get a BlueCash card and be done with it.

Filed Under: Credit Cards Tagged With: , , , , ,
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