Who Should Get A Black Card? Probably Not You!

Visa Black Card CommercialThere once was a time I was rich, but never famous as I traveled internationally four times a year for business. Each destination hosted loads of other folks who wanted to learn about the next money making idea in the global financial markets. With me was an American Express corporate card where I could expense relatively freely to the tune of ~$50,000 a year. The card provided travel insurance, access to airport lounges, concierge services, and more. 50K may sound like a lot, but that’s nothing compared to the hundreds of thousands in expenses I hear from some Black Card spenders!

I don’t have much coming in anymore, but I do have a lot of freedom. It’s a tradeoff many will take at some point in their lives. Given my desire to simplify things, I’ve only got one personal credit card, which is the Barclaycard Arrival World MasterCard with no annual fee. There’s no annual fee and all my spending is concentrated here to maximize my rewards points.

Since we live in the land of consumerism where we want things and we want them now, I thought it’d be a good idea to do a post for all you Black Card aspirees out there. Some get Black Cards just for its status symbol. Meanwhile, other people are a little less vain and use their Black Card for better access and service. Whatever the case, I’d like to introduce my guidelines for those who can and should not get a Black Card.

SHOULD YOU GET A BLACK CARD? LET’S SEE IF YOU QUALIFY

* High income individuals. Given the official definition of a middle class income is up to $200,000 per individual, only people with income of $200,001 and above are allowed to have a Black Card according to the powers that be. In fact, anybody with income of less than $200,000 should probably not have any card with an annual fee of greater than a couple hundred dollars a year!

* High net worth individuals. Having a high income is not impressive if you can’t match it with a robust net worth. If you don’t have a net worth at least 3X your income, then please reconsider getting a Black Card. In this scenario, the definition of robust is at least $600,000 based off a $200,000 annual income. Higher the better obviously.

* Responsible people. When you have a Black Card, you will have an urge to use your Black Card. You can very easily blow a whole in your finances given the naturally larger line of credit that comes with such a card. Responsibility can be measured by a credit score of 760 or higher. After all, the average credit score of a rejected mortgage applicant is 729. Those who demonstrate the historical ability to pay their bills on time are target candidates.

* People who aren’t in consumer debt. If you are already in consumer debt, then you are acting foolishly if you are even considering apply for a Black Card. Potentially adding even more debt is not a smart thing to do because credit card interest rates are some of the highest debt rates around. Even if you don’t plan to add on more consumer debt, it’s a good idea to resolve current debt problems first.

* People who pay a premium for convenience. When you are rich, you are willing to pay someone to mow your lawn, clean your house, and change your oil. Funny enough, middle income people do this already! But, that’s why they will stay middle income because the time not spent mowing a lawn is used to sit on the coach and watch TV. Rich people are better at utilizing their time to generate more income. They appreciate services that lead to better lifestyles. Black Cards almost always come with annual fees which can be a hurdle to cross if you don’t utilize the card enough. A $500 annual fee means you need to roughly get at least 50,000 in rewards points to just break even.

* People who expect to be saved. Here’s an interesting one. Let’s say you make less than $100,000 and have a net worth of less than $200,000. You have no business owning a Black Card with a large annual fee. But, let’s say you expect to be taken care of by your parents, the government, or spouse, then maybe you’ve got an argument! Your saviors might drop you in the future, but for now, you can milk them for all they’re worth.

* People who look as good as the models in the picture above. Let’s be real. If you are hot, life is good. People will treat you better. They’ll give you the benefit of the doubt, let you make more mistakes than the average person, and want to take care of you as long as you stay hot. Good looking people get away with murder, so why not enjoy spending a little more?

If you qualify for at least six out of the seven items above, you are ready to get yourself a shiny new Black Card! But, let’s be honest, you probably don’t qualify.

CREDIT CARD RECOMMENDATION ALTERNATIVES

Barclaycard World Master Card: If you are an avid traveler and looking for a travel rewards credit card, you can sign up for the Barclaycard Arrival World MasterCard with no annual fee with double the points on travel and dining and 20,000 signup miles ($200 value). Barclaycard offers $200,000 in automatic travel accident insurance, reimbursement for expenses if your bag is lost or delayed, trip cancellation coverage, and $0 fraud liability.

Discover Credit Card: Are you looking for the best credit card for balance transfers, flexibility, and rewards? Check out the benefits of the Discover it® credit card and maximize your purchasing power. You can earn 5% cash back rewards without any annual fees, over limit fees, or foreign transaction fees. And did you know Discover has been ranked #1 for customer loyalty for 17 years in a row? Discover it cards are accepted at over 9 million merchants nationwide and their U.S. based customer service team is available 24/7. Just remember to spend within your means!

Check Your Credit Score: Take a moment to check your free TransUnion credit score through GoFreeCredit.com, a company I trust. 30% of credit reports have errors, which could put a serious hamper on your refinancing or new loan borrowing abilities. I had a $8 late payment I didn’t even know I owed crush my score by 100 points come up during my last refinance. The average credit score for rejected mortgage borrowers has risen to 729 due to more stringent lending requirements. Do you know what your score is?

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Benjamin says

    I know a 28 year old woman who only makes around $70,000 a year who has a Black Card. She loves to spend money on electronics and travel. Guess what her net worth is? Less than half her income at around $33,000! She needs to literally spend 100% of her after tax income every year on the card just to cover the annual fee!

    Unless she finds “a savior” as you call it, she’s going to be working for a very looong time.

  2. Jon says

    I could see if you were at a point in your life where time was far more scarce than money than the $500 annual fee could be worth it if it really did save you time. If I ever get there I think my cheapness will prevent me from paying for something ($500 annual fee) that I can get for free (credit card accepted in all the same places with no fee).

  3. Untemplater says

    Ha wow a $495 annual fee?! Now that’s steep. That’s actually more than what I spend on my credit card some months combined. All of my current credit cards are 0 annual fee right now which is nice. I suppose for those who are making big bank and are responsible it’d be fun to have a black card and see what the luxury gifts are, but I’m sure they aren’t really “free” gifts with the fee so high. I didn’t realize that black cards are made from carbon too. Next time I’m in a high end store (which is practically never) I’ll have to look and see what types of cards people are paying with. It’d be fun to say I’d seen someone pay for a purchase with one.

  4. Jacob says

    I have a Visa Black Card because I travel about 100k miles a year and like the service and extra travel insurance. My income is over $350,000 so the $495 annual fee doesn’t bother me bc I get probably $2,000+ in benefits.

    I agree with you the income and NW requirements. Probably not worth it if you don’t travel much and make less than $100,000.

  5. Kim@Eyesonthedollar says

    I’ve always wondered about the elusive black card. Aside from the luxury gifts, how much different is it than the Chase Sapphire? I just got one, and it’s heavier than any card I’ve ever had. I’ll have to check and see what it’s made from.

  6. Financial Advice for Young Professionals says

    Unless this card is gonna help you get laid, there’s no way in hell it makes sense for anyone. You can get all these services and more from a Chase Sapphire or an AMEX Gold for way less money. I don’t see any benefits listed above that are that special. If I’m rich, I’ll just tip everyone a $20 :)

  7. krantcents says

    Although I qualify (5 out of 7), I would never pay the $500 fee. Perhaps it would be beneficial for American Express to just give it to me. I will do fine without it though and I am okay with that.

  8. Romeo says

    Yeah. Doesn’t sound appealing to me, either. I guess it’s just one of those things that fits the montra, “when you have money, spend money.” I would figure that someone who earns more than $200,000 a year can simple abstain from using credit cards altogether, regardless of the insignificant rewards that are given to black card users.

    • Financial Samurai says

      Someone who makes $200,000+ a year is not much different from someone who makes $50,000 a year given most people don’t save more than 20% of their after tax income.

      $200,000 is also not that much in big cities such as SF and NYC. It really is about convenience when you have such a card.

  9. Benny says

    The Visa Black doesn’t seem appealing at all even if I made enough to justify. I could put my spending on other cards and get more benefits from it. And it has a foreign transaction fee? Not cool.

    Also they try to make it exclusive. Well by sending out promos to talk about it (I’ve gotten it in the mail before) it makes it not as exclusive as they try to make it.

  10. Less Job More Income says

    I run in the Internet Marketing circles and a lot of my colleagues view the Black Card as a badge of honor. I’ve had months where I’ve spent $10-20k on pay-per-click fees but would never have put that on a credit card. I’m 100% cash liquid in my online marketing business and it offers peace of mind like nothing else. I view the Black Card as nothing but a status symbol by those who want to look like celebrities (poppin’ bottles or whatever the kids are doing nowadays).

    Me, I’m a 37 year old father of two who is trying to make enough money so my kids don’t have to take out loans to go to college. I could care less about status symbols. Okay, that’s the end of my rant

    • Financial Samurai says

      What exactly is the “Internet Marketing Circles”? For example, I’m ont he internet and I market several recommended products, including my book. Does that make me an internet marketer? Just wondering what the definition is. Thx.

  11. Krista says

    Got an offer for a Visa Black card in the mail… I assume it’s my credit rating that did it. Still, I got that credit rating because I’m not stupid about my finances. I’m not going to waste a $495 annual fee on a credit card. I don’t travel that much so the travel benefits are pretty much useless to me. I’ll stick with my Discover IT card, or my American express Fidelity card, neither of which have annual fees, and continue raking in the cash back.

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