Competition for credit card customers is fierce and card issuers are wooing consumers with an ever-wider array of rewards cards. In fact, some analysts believe we’re in a rewards card bubble.
As rewards increase, annual fees climb, too. The median annual credit card fee is currently around $50, but plenty of cards now come with triple-digit annual fees.
So does the conventional budgeting wisdom that says consumers should opt for no-annual-fee credit cards still apply? Not necessarily. One group in particular, entrepreneurs, may find that high-fee, high-reward cards are a cost-saving alternative to a personal assistant.
Putting a Team Together on a Budget
You’re probably familiar with the basic suite of credit card rewards, including airline miles and statement credits. Those rewards can be great for customers who take advantage of them, but they’re limited by their nature. Once you cash in the points, apply the statement credit or use the miles, you’re no longer reaping rewards. Plus, plenty of annual-fee cards front-load their rewards, offering hefty sign-up bonuses that make it easy to break even in your first year as a card-holder, but harder to break even in the subsequent years.
There are signs that the credit card rewards landscape is shifting, though. As a complement to finite rewards like miles and statement credits, rewards that last all year are helping credit card companies compete for high-income consumers. It’s why some high-end cards like the MasterCard® Black Card™ go beyond the usual rewards to offer 24/7 concierge services. A credit card concierge service can help small business owners, start-up founders and entrepreneurs with anything from booking business travel to getting restaurant reservations for client lunches.
According to salary aggregator Glassdoor, the national average salary for a personal assistant is $27,390. In New York, the average personal assistant salary is $44,000. By contrast, the Luxury Card Concierge™ that comes with the MasterCard® Black Card™ is available to any cardholder, for an annual fee of $495. No wonder some business owners are leaning on the concierge service from their rewards cards rather than adding a salaried member of staff.
In business, time is money. Outsourcing tasks, whether to a salaried member of your professional entourage or to your credit card concierge service, lets you spend more time raising money, pitching clients and recruiting top talent.
It’s Not a Bargain if You Don’t Need It
An entrepreneur who needs a lot of hands-on, in-person support may find that a real live personal assistant is more helpful for growing the business than even the best credit card concierge service could be. A business owner on a tight budget may prefer to get concierge service from a credit card that doesn’t charge an annual fee.
In short, there’s no one-size-fits-all credit card. You can always close a credit card account if you find that the first year’s rewards don’t offset the annual fee, but a little number crunching before you apply for a new card should be enough to ensure that you get good value for the money you spend on annual fees.
For Advanced Users
The higher the annual fee on your credit card, the more important it is to make sure you’re taking advantage of the rewards the card offers. So if you opt for a credit card that comes with concierge service by all means make that card work for you and your business, using the service for securing client gifts, setting up conference calls or arranging travel and accommodations. Don’t be shy about putting your credit card concierge service to work – you’re paying for it.