Abstract
This report examines the recent emerging segment of super-premium credit cards
in the U.S. These cards are defined by Mercator Advisory Group as having the
following characteristics:
- Annual account spending of $50,000 or more
- A significant accountholder relationship with the issuer or co-brand
partner in terms of spending or assets
- An exceptional level of rewards and service benefits to the cardholder
- Prestige positioning of the product/account
- High likelihood of a significant annual fee
Super-premium cards are just beginning a new push into the top U.S. affluent
segments, and present an opportunity to attract highly desirable customers, or
just as importantly, to retain their business. With the new bank card-enabled
products of the World Elite MasterCard and Visa Signature Preferred, there may
be opportunities to upgrade existing card programs or accounts, as well as the
emergence of a new and exclusive version of co-branding through existing
financial, retail, and service relationships. These relationships provide the
basis for identifying and qualifying prospects, as well as providing a
"stickier" relationship than a card alone might provide.
Highlights of the report include:
- 1. The target market for super-premium cards is a mix of overlapping
asset, rich, high income, and high spending households.
- 2. Of the estimated 3.3MM households spending $50,000 or more on credit
cards annually, just 1.8MM have incomes over $200,000, indicating the
importance of near-premium cards for mass affluent high spenders.
- 3. The introduction of World Elite MasterCard and Visa Signature Preferred
products has created a new platform for issuers to compete in the
super-premium segment along with American Express Platinum and Centurion.
- 4. Recently introduced programs concentrate on financial institutions'
relationship programs, high-end co-branding partners, and private jet partner
programs.
- 5. Estimated penetration of super-premium products in the target segment
households is currently low, suggesting new issuing and upgrading
opportunities for issuers with an appetite to pursue these narrow segments.
Ken Paterson, Director of the Credit Advisory Service at Mercator
Advisory Group and the author of this report comments that, "That the
historical record of bank card issuers in maintaining exclusivity is somewhat
checkered, as Gold and Platinum products became commoditized, no-fee offerings
in pursuit of broader marketing goals. The current generation of
super-premium bank cards offers hope that their targeting guidelines will
establish and then maintain their exclusivity, which will be critical in
competing against American Express' entrenched and successfully maintained
presence in the super premium segments."
The report is 30 pages long and contains 16 exhibits
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