Play your cards right
Hai Huang, a lawyer who recently emigrated to Hong Kong from Boston and now lives on The Peak, has seven credit cards. Among her trove, she holds a Visa Signature and an American Express Platinum card, and she is keenly aware of which perks come with what plastic.
'I have all the brochures listing all the benefits,' says Huang, who calls the card companies often to complain about any slip-up in service standards and scours her contracts to make sure card issuers are living up to their commitments.
Credit-card savvy consumers out there can rattle off with ease the perk of the major brands. American Express, the granddaddy of prestige cards, has its much vaunted no-credit-limit policy; many high-end cards offer some sort of access to airport lounges (a surprisingly popular perquisite); and all cards have reward-points schemes.
Hongkongers love their high-end credit cards. In a city of high social mobility, they signify income and status, and offer attractive benefits. But they can also come with steep fees, and the costs and rewards do not always stack up.
Even the luxe names radiate aspiration. HSBC has its Premier and Platinum credit cards, Citibank offers an Ultima Visa card, and Standard Chartered has a Visa Infinite card - to name just a few.
Simon Loong, Standard Chartered's head of unsecured lending for northeast Asia, acknowledges that while Hongkongers' status-seeking tendencies partly explain why such services are popular, they also offer tangible benefits. 'Hong Kong customers are very receptive to credit-card products and offers. It's almost socially fashionable to know your perks from your cards,' Loong says.
Standard Chartered is the city's largest issuer of Visa Infinite Cards, Loong says. The card's benefits include bonus points, access to more than 600 'Priority Pass' airport lounges, airport limousine pick-up service and US$1 million in travel accident insurance.
The Citibank Ultima card comes with a promise of 'personal assistants' and private yacht arrangement, along with the more prosaic rights to about 450 airport lounges globally. 'The card imposes no restriction on credit limit or on types of gifts that can be redeemed with reward points,' says Carmen Tse, a Citibank spokeswoman.
The rewards are many. Callister Koh, a group head of human resources at AIA, holds a Visa Platinum card, is a heavy traveller and appreciates the access to airport lounges his card gives him, along with preferred access to car rentals (when supply is tight) and the high credit ceiling of his card. 'I never have to worry about busting my limit when travelling. It gives me a sense of security,' Koh says.
Hans Brasseler, Hong Kong-based chief regional counsel for financial services firm MSCI and an Amex Platinum card holder, says American Express has a concierge service that gets him into restaurants, and a replacement service for lost cards that is 'phenomenal'. 'Within two minutes of calling they cancelled the card and sent me a new card by FedEx in two days,' Brasseler says.
Huang also uses Amex's concierge service, recently to get a table at the French Laundry in Napa Valley, California, reputedly the best restaurant in the US. 'Usually, you have to make a reservation two months in advance, and they were able to get me a table with one or two weeks' notice,' Huang says.
But consumers might notice it's difficult to put a dollar value on the perks of the high-end cards, as their advantages are often about offering access, bumping people to the head of the queue, granting upgrades and late hotel checkouts, to name a few examples. The perks are status enhancing and convenient - but how much are they actually worth?
For all the benefits of premium cards, fees can be steep. The annual charge at Citibank for the Ultima card is HK$8,888, although Citigold customers can get the fee waived.
The annual fee for Standard Chartered's Priority Banking card is HK$2,400, and HK$6,000 for a Visa Infinite card. Standard Chartered's late fees can hit HK$180 for a previous outstanding statement balance of HK$10,000 or less, or HK$220 for above HK$10,000.
American Express charges HK$5,500 per year for its Platinum card. Amex's 'by invitation only' black card (aka Centurion) has a sizeable levy of HK$19,800 per year, after a joining fee of HK$23,800.
American Express also does not cave in on its fees at the first sign of customer unhappiness, as most of the card firms are inclined to do.
Brasseler once asked Amex to waive the annual fee on his Platinum card. He says the representative 'suggested in the politest possible way that, if you can't afford the annual fee, perhaps a Platinum card is not for you'. Brasseler quickly backed down.
American Express also charges a 2 per cent foreign-currency conversion fee (on all transactions done outside the home currency). That's on top of what Amex makes converting foreign currency at rates favourable to the firm.
Even if a credit card firm waives its annual fee, forex conversion fee, late charges, joining fee and other commission, it will still charge a fee to vendors, typically about 2 per cent to 3 per cent per transaction. People do not see this commission, but it is part of the cost.
The annual levy in Hong Kong dollars on Amex's by invitation only black card (aka Centurion)