The Fine Print

While most credit card holders use their cards for groceries, grandma's birthday present or gasoline fill-ups, the 0.00000001% of the world population holding the American Express Black Card do not settle for such mundane purchases.  Forget buying a seat on a roundtrip airline route, why not charter a jet using the American Express Black Card?  Forget filling up your gas tank in your Honda Accord, why not buy a Bentley using your American Express Black Card?     

And, these purchases are just scratching the surface of the lux, lavish and one-of-a-kind  purchases using the Black Card.  Comparecards.com's favorite purchases by American Express Black Cardholders: buying a horse ridden by Kevin Costner in Dances with Wolves; buying a handful of sand from the Dead Sea for a child's school project; buying a role in the case of a soap opera for an aspiring actor.  Let us know of any other outrageous purchases made using the Black Card that you know of!

So what does it take to get your hand on the heralded black card? It’s not easy.

Requirements

Although this card is the world’s most exclusive credit card, it’s requirements are not that of a basic credit card. To get the card you must possess the following:

• One year of $250,000 cash flow on ANY American Express Card
• Hold a US address
• A near perfect credit history.

Along with this you have to pay an annual fee of $2,500, although being accepted into the cards

The annual fee is $2,500, and although the card is generally by invitation only, any Amex cardholder who believes he qualifies can request that his account be reviewed for eligibility.

The Benefits

First of all, the AMEX Black Card is not your regular card. Having the card is only one part of the experience in being a Black Card Member.

With this card, AMEX also assigns a personal “gatekeeper” with a direct phone number and email address to each person. These people have been known to create “impossible” dinner reservations and make non-existent sports or arts tickets exist. If the card holder happens to lose his wallet, one call will refute all cards and issue new ones. That’s right, one call.

Also, the AMEX black card has an Emergency Assistance Program in case the member is away from home. This “On-Star” system has the legal, financial, and medical information of the card holder available 24/7. It can also be used to replace missing passports, prescriptions, or even arrange for an air ambulance anywhere on Earth, and cover all inoculations.

The cardholder also has private access to high-end stores and boutiques. These include Gucci, Neiman Marcus, and Saks Fifth. These holders are provided a personal assistant to help with the shopping. ALSO, if the items purchased are damaged, they can be replaced up to $50,000 a year. The card also extends any buyer’s warranty by an additional 3 years, regardless of how long it is. Yes, this includes a life time warranty.

The cardholders also have memberships in the FHR (Fine Hotels and Resorts) and SLH (Small Luxary Hotels) which entitles them to free room upgrades, late check-outs, and a personal staff there to meet their every need. The card also means complimentary breakfast for two.

Also, the frequent flier miles for this card are a little better than any other. The benefits boast:

• First-class flight upgrades
• Personal travel assistan
• Access to 450 upend airport lounges in 80 countries
• A Private Jet Service membership, where the member can buy flight time on a private jet or buy into a “time-share” jet.
• Finally, a membership in Space Adventures, the company that is promising tourism in space. The cardholder gets credit towards the payment of a space flight.

If the cardholder were to die on the trip during a flight, their family would receive as much as $3.5 million for death reimbursement through the card’s travelers insurance. Their luggage is also insured up to $2,000. If a flight is delayed beyond a few hours, the card holders are issued $250 for hotels or cabs.

So all in all, the AMEX black card is not such a bad deal. If you have the money, chances are you should have this card. But one has to ask . . . now that the government is bailing out many of these institutions, who is footing the bill for such luxuries?

In our blog, what are common fees for balance transfers, we explained that most credit card companies charge a percentage of the balance transfer amount without applying a cap. For example, if you transfer $1,000 and incur a 3% transfer fee, the amount that will show up on your credit card will be $1,030 (principle transfer of $1,000 + $30 transfer fee). Three percent is a common transfer rate across issuers. The only Bank that I'm aware of with a cap on credit card balance transfers is Chase (e.g. $75). Typically, the amount you owe per month on your transfer will be 2% to 3% of the transferred balance.

So, if you transferred $10,000 using a zero percent introductory transfer rate, your first monthly payment would be around $258 ($10,000 transfer + $300 transfer fee = $10,300 x 2.5% = $257.50). Once your introductory period expires, your monthly payment should then revert back to an amount significantly less than the 2.5% because you are now being charged interest which is when the credit card company begins making money.

Cash advances on your credit card should be avoided at all costs. The primary reason for this is the extraordinarily high interest rates (average is around 21%) that are charged on this type of transaction. Not only do you begin incurring a high interest rate right away, but you are also charged the same type of fee that you are with a balance transfer. Therefore, on a cash advance of $10,000, your first month's interest will cost you $175. If you look to pay your interest balance off each month, your first monthly payment would be $432.50!

If you qualify and need immediate cash, call your credit card company and request balance transfer checks. Most credit card companies now offer these with monthly statements. If your next statement includes one of these, you might want to tear one off for a rainy day. This way, you can use the funds to pay off other credit card balances or fund something else, like a downpayment on a car. If you don't qualify, you may want to consider a loan from a friend or contacting your local bank.

Other Resources:

• Beware of Hidden Credit Card Fees
• Sidestep Credit Card Fees
• Credit Card Offers: What's the Catch?
  

If you’re considering one of the many balance transfer cards, you’ll want to do a little homework first.  Though the first and most important item that most of us focus on with balance transfer cards is the promotional or introductory rate, it’s important that you also consider the regular APR as well as any fee that you’ll be charged and whether there is a cap or minimum/maximum limit on the fee. 

Some credit cards will charge a percentage of 3% or more but they’ll offer some protection for large balance transfers by putting a cap or limit on how much the fee can be.  In general, the max caps for balance transfers are somewhere around $75.  However, if a card doesn’t have a cap and you want to transfer $5,000 for instance, you could be paying as much as $150 ($5,000 x 3%) for the transaction. 

In spring of 2006, Chase created a bit of an uproar when they eliminated caps on many of their balance transfer cards. Caps and transaction fees can vary dramatically from credit card to credit card. And, bottom line, the only way to know for certain whether a balance transfer card is a good deal or not is to check the fine print located in the disclaimer when you apply.

Other Resources:

• Low Interest, No Fee Credit Cards
• The Truth About Transfer Fees
• Watch Out for Hidden Credit-Card Fees  
  

In the world of credit cards, the saying time is money should really be “timing is money,” especially when the topic is the importance of making payments on time.  Once you’ve found a great credit card offer like a 0% interest balance transfer card or a great rewards card with a low regular interest rate, you’ll need to make certain that you make each and every payment on time, every time.  Defaulting on your payment even once (meaning making a payment after the due date) will at the very least, result in a late payment charge – sometimes as high as $35 or more, and can even mean that your special interest offer will go away. 

One great way to ensure that your payments are made on time, every time is to find a card that offers free online account management and automatic bill payments.  You should be able to arrange to pre-schedule the minimum amount due, which will ensure that you never have a late payment. 

And, if your financial situation will allow, an even better situation is to set it up to pay your balance in full each time.  Both options are usually included in any automatic payment program. However, while automatic payments can be a great time saver and safety net, you’ll still want to make certain you review your statements each and every time. 

Even credit card companies can make mistakes and good account management requires time and attention.

Other Resources:

• The Student LoanDown: The Importance of On-Time Payments
• HOWTO: Be Savvy with Credit Card Balance Transfer Offers
• Be Debt Savvy with Credit Cards