Prudence and decadence, side by side.
In the lineup of charge cards offered by American Express Co., you can play it either way.
Yes, charge cards. Although Amex offers conventional credit cards, it built its business on a kind of card where you are obligated to pay in full each month rather than making partial payments and carrying a balance.
Charge cards are for people who never spend more than they can afford. If we all had them, who knows how much less trouble the economy would be in right now.
That's the prudent side of charge cards. At the end of last year, Amex added some decadence by introducing its exclusive Centurion card to Canada.
You will not likely see someone waving a Centurion card around in your local Giant Tiger store. Cardholders must be invited by Amex to hold this card, and the annual fee is $2,500 plus a $5,000 initiation charge.
For that, you get a way-nasty jet-black card made of titanium.
"It's hand forged and hand engraved and embossed," said Barclay Hancock, director of American Express Canada's charge card portfolio. "There's no product like this in the world."
At one end of the Amex card lineup is the venerable green card, which was introduced in 1958 in both the United States and Canada. Then there's gold, platinum and the black Centurion card.
One thing all the charge cards have in common is a customer base that, in Amex's experience, does a better job of paying its debts than those who carry credit cards.
Mr. Hancock explained that charge card holders tend to be more careful with debt. "They would be, typically, more financially responsible, more financially astute. They sign up for the card understanding that it is a pay-in-full product."
We're in recession, so some people aren't paying off their charge cards in full. For them, there's a daily delinquency fee of .0822 per cent of their outstanding balance. Keep up the delinquent behaviour and Amex might contact you about switching to a credit card.
Even Centurion cardholders have had their troubles with debt lately. According to recent reports, singer Courtney Love - she of the band Hole - is being sued by Amex over unpaid amounts charged to Centurion and other of the company's cards.
Outside the Amex lineup, charge cards are a rarity these days. Mr. Hancock said he wasn't aware of any competitors in Canada, while in the United States, the market includes a Diners Club offering and some department stores.
One knock on Amex's lineup of cards is that you may not be able to use them at the same range of establishments as Visa or MasterCard. For example, I filled up the car the other day at an independent gas station where Amex was not accepted, but Visa and MasterCard were.
A compensating benefit for using Amex charge cards is that you get 30 days to pay your bills, compared to the usual 21 for most credit cards. Another is that if you ever make it big, you might get asked into the Centurion club.
Centurion occupies the penthouse of the credit card market. To sustain the aura of exclusivity, Amex declines to discuss its criteria for dispensing Centurion cards beyond saying they include income, loyalty to Amex and spending patterns. Word on the Internet is that it takes $250,000 in spending over a year on your current Amex card to rate an upgrade to Centurion.
What are the benefits of this rare and expensive card?
"The biggest thing, absolutely, is service," Mr. Hancock said.
To start with, cardholders have access to a concierge team that stands ready to serve. "In the day to day, it might be things like arranging restaurant bookings, or booking tickets to shows or the theatre," Mr. Hancock said.
Cardholders also have access to what amounts to their own personal travel agency. "You can literally call them, tell them you're going half way around the world and ask them to construct you a complete itinerary, including tours, restaurants, everything."
Other benefits include complimentary hotel room upgrades, access to airport lounges, access to exclusive events, many types of travel insurance and a rewards program.
You also get exclusivity. Visa doesn't offer anything like Centurion in Canada, although Barclays Bank does offer a high-end black card in the U.S. market. It's made of carbon graphite and the annual fee is $495 (U.S.).
Don't bother looking for alternative luxury cards from MasterCard because there are none.
"We don't offer a product that is even close to that category," a MasterCard Canada spokeswoman said in an e-mail.
American Express introduced its Centurion card to Canada at the end of last year, but you probably don't know about it because this card is so exclusive. Here are some details gleaned from Amex and various websites.
Charge card, which means monthly balances must be paid in full
dedicated concierge service, numerous travel perks, a rewards program, protection benefits like travel insurance, retail protection and emergency assistance
No pre-set limit
How to Apply:
By invitation only
How to Qualify:
Rumours unconfirmed by Amex say that spending of $250,000 per year on your existing Amex card will get you in