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Titanium takes upscale
credit cards even higher
By Lucy
Lazarony • Bankrate.com
 WILMINGTON,
Del. -- First came gold. Then came platinum. Now, say hello to the
titanium card.
 While
many people are still struggling to decipher the difference between
the platinum card offers flooding their mailboxes and the gold cards
they have used for years, here comes First
USA's titanium card with yet another set of "exclusive" privileges
and benefits.
The
most appealing feature of the card may be its annual percentage
rate, an impressive 9.99 percent. But people who regularly pay off
their balances may be hard-pressed to find a benefit from the titanium
card. In addition, those who pay late on their titanium card will
be sorry: late fees and penalties are substantial.
Stepping
out of the crowd
"It's
trying to one-up the platinum pitch," said Bruce Brittain, president
of Atlanta-based Brittain Associates. "It's an attempt to push yourself
out in front of the crowd because the crowd is sending credit card
solicitations to everyone."
In
1997, 40 percent of the three billion credit card offers mailed
out were for platinum cards, according to BAI Global, a Tarrytown,
N.Y., market research firm.
Titanium
cards, which have been test marketed by First USA, a unit of Banc
One, since the fourth quarter of 1997, are looking to eclipse the
exclusivity and privileges associated with platinum cards.
Do
they measure up?
How
do they stack up? First, the titanium card's 9.99 annual percentage
rate and no annual fee certainly will appeal to bargain hunters.
It also boasts a credit line of $5,000 to $100,000.
As
for privileges, it allows a cardholder to save as much as 30 percent
on products and services from 2,500 merchants including Amoco, Hyatt
Hotels and Jiffy Lube. It also includes complimentary auto rental
insurance, $100,000 travel accident insurance, a 20- to 25-day interest-free
grace period and a warranty service.
"Anything
lower than 10 percent is a good interest rate and, with these other
features, it's a good card," said Marcia Waite, vice president of
MarketIQ,
a Fair Haven, N.J.-based company that tracks credit card offers.
Good,
but not groundbreaking
Indeed,
good, but not groundbreaking, is how many experts view the titanium
card.
"It's
a product line extension, not a new product line," said Jim Accomando,
president of Fairfield, Conn.-based Accomando Consulting. "The new
and improved platinum card is now called the titanium card. It has
a few new enhancements unique to titanium."
One
such enhancement is called "at your service," which encourages cardholders
to e-mail First USA with questions about everything from wedding
plans to financial plans. A response is guaranteed within two days.
This feature is a new twist on the concierge services available
with many platinum cards.
The
titanium card also includes a rewards program targeted toward customers
who carry a balance from month to month. According to a First USA
spokesman, cardholders earn one point for every $100 they carry
on the card per month, excluding any fees and finance charges. The
rewards include everything from home electronics to sports equipment
to vacation getaways.
It
takes a lot to get a little
But
cardholders better be patient, because it could take a while to
earn that dream reward. For example, a customer would need to carry
balances totaling $60,000 to earn the 6,000 points necessary for
a Sony Sports Walkman.
While
titanium's low APR and no annual fee alone will appeal to people
who tend to carry a balance each month, Brittain said he could find
little in the card that would appeal to people who pay off their
balances each month.
"For
someone who's a convenience user, this card doesn't really offer
much," Brittain said. "If you carry a balance, this is not a bad
deal. As long as you're careful to follow the rules."
The
small print
He
pointed that as with many low-rate cards, the titanium card's late
fees and penalties pack a wallop.
The
titanium card has a $29 late payment fee and a $25 over-the-limit
fee. If a payment is received late twice in six months an adjusted
rate of 19.99 percent slams into effect. If a customer fails to
make payments for two consecutive months, an eye-popping rate of
22.99 percent is applied to all balances.
"In
those situations," Brittain noted, "the titanium color of the card
doesn't do you any good."
-- Posted: May 8, 1998
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