Centurion Card - Is it worth it?

[Stephen65]

Richardkopf pretty much got it all covered - each to their own. 125k extra bonus point = a J ticket to Asia - which in itself pays for the card.

I don't see how the capacity to earn another 125K bonus MR points over Plat makes the extra cost of Centurion worthwhile, or is even of much value in itself.

Unless you are absolutely determined on MR points you can get the FF point equivalent at the same MR points for nothing or a small fraction of the price by using a bank issued Amex card as a backup to your Plat Amex.

That's what I do; between my Amex Plat charge and Amex Plat CC I have $300,000 worth of spend at the full rate and then my CBA Diamond Amex gives me another $333,000 spend for nothing (free card) at $1 = 1.5QFF. I use the Plat charge for expenses where I specifically want it to be on the Amex because of insurance, extended warranty or special Amex offers and the CBA card for the rest.

 

[sparoz]

I don't see how the capacity to earn another 125K bonus MR points over Plat makes the extra cost of Centurion worthwhile, or is even of much value in itself.

Unless you are absolutely determined on MR points you can get the FF point equivalent at the same MR points for nothing or a small fraction of the price by using a bank issued Amex card as a backup to your Plat Amex.

That's what I do; between my Amex Plat charge and Amex Plat CC I have $300,000 worth of spend at the full rate and then my CBA Diamond Amex gives me another $333,000 spend for nothing (free card) at $1 = 1.5QFF. I use the Plat charge for expenses where I specifically want it to be on the Amex because of insurance, extended warranty or special Amex offers and the CBA card for the rest.

It all comes down to the total spent. Richardkopf has mentioned it before, but let me explain it more. I have 3 Amex cards (1 personal, and 2 business), and 1 personal visa and a 1 personal M/c to cover places that doesn't accept amex. The amex amount is about 3 million annually. That is equivalent to 250k average per month. If you time your expenses correctly, then you pay all your bills at the start of the cycle. So, in reality that is equivalent to a $500k limit on average. I would probably need more because expenses don't spread out equally each month, and busy months like around Christmas, I will need an effective credit limit of say 700k.

Now, imagine trying to have a 700k credit card approved. Even if an institution approve that sort of limit, it will severely affect your borrowing capacity, because in effect, that is also a loan. Now, some bankers might be able to shed some light to this if this is true or not, but if I am a bank, I would even been more cautious if a business or an individual has numerous high limit credit cards. That is, if you are happy to manage say seven additional cards. The other alternative is to pay the card early, but then you will have to start including the time value of money into account.

So, effectively, because of the spent, the card is actually free because of the value of the MR points. MR is much more flexible than any other FF as it gives me more flexibility on who I can fly with - especially important with a NB like me as I fly pretty much exclusively with points.

So, again, it all depends on ones circumstances on if the card is suitable.

 

[RichardKopf]

I don't see how the capacity to earn another 125K bonus MR points over Plat makes the extra cost of Centurion worthwhile, or is even of much value in itself.

Unless you are absolutely determined on MR points you can get the FF point equivalent at the same MR points for nothing or a small fraction of the price by using a bank issued Amex card as a backup to your Plat Amex.

That's what I do; between my Amex Plat charge and Amex Plat CC I have $300,000 worth of spend at the full rate and then my CBA Diamond Amex gives me another $333,000 spend for nothing (free card) at $1 = 1.5QFF. I use the Plat charge for expenses where I specifically want it to be on the Amex because of insurance, extended warranty or special Amex offers and the CBA card for the rest.

Qantas points have considerably less value to me than some others. The value of Membership Rewards is increased by being able to move points where I want.

Qantas is culling first class on all but the 380, which means LON/SIN/HKG/LAX. It's good for those destinations, but for others, another carrier is needed. Qantas route/aircraft changes over the next few months will retire 6 747s, replacing the mid-hauls with 333s, with no first and coughpy business. In addition, Qantas first SYDBKK requires 180000 points. The same on TG using SQ points costs 140k - a 40k saving. QF first SYDLAX costs 288k points and about $800 in taxes. UA first via SQ points costs 200k plus $200. A saving of 88000points and $600.
Our last trip SYDROM in TG first cost 460k points through SQ. The same on Oneworld would be, at least 768000 points (enough to go SYDTYO twice in J) plus the $1000 tax savings.

These examples are not to show that once of us is more correct, but currently, the choice Amex provides makes it considerably more valuable, and better value, than any bank issued cards.

Being able to choose which carrier to move points to, and which to redeem on saved me around 300k points and $2000 in taxes for the 7 first class trips redeemed, last year. I can, through my business, convert the 300k points to $3000 (or use them to fly or stay), but the saving over QF points in 2011 paid for Cent card before any other benefits are included.

I guess we all calculate based on our needs, but you say you get 'full points' on 633000 of spend. Using our Amex card suite, not including bank issued cards, we receive bonus points on 1,200,00. Obviously, we spend more on the cards than you would, but we also earn 283500 more points for the same spend. Those additional points will get me to BKK twice in first class. That alone is worth the price of Cent.

It all depends on 1/ your annual spend, 2/ how much you travel. I doubt there is a single, best answer. I accept that Plat is best for most people, but Cent works for us, in our unusual business card spend.

 

[Stephen65]

I agree that MR points are more flexible than QFF points but I was only giving the latter as an example, you could get a bank issued card that earned krisflyer points instead. While I agree that QF international availability isn't great I can always find a use for 125,000 QFF points a year for domestic J travel.

Paying an extra $3400 over Plat to be allowed to earn 125K MR points when you could with the same dollar spend earn the same number of FF points directly for free on a bank issued Amex card seems very expensive to me.

 

[sparoz]

I guess I can always take another CC for 250k spend a year. As long as it doesn't give me more QFF points - I have enough of those, and don't want another 375000 a year. Not sure any Australian CC gives Asiamiles which is most useful to me. I have family in HK, so KrisFlyer means an extra stop which is a pain.

 

[exp1k]

Stephen65, we are going in circles, I suggested the same on page 4.

My understanding now is that Amex is clearly better for people who spend millions as it is hard to get such a high spending line on any other card without prepaying the monthly bill. Then the Centurion does give 125-150k more points.
On the other hand, there are clearly other ways to earn more points, but this does require prepaying the monthly bill when your spend is too high.

 

[exp1k]

I guess I can always take another CC for 250k spend a year. As long as it doesn't give me more QFF points - I have enough of those, and don't want another 375000 a year. Not sure any Australian CC gives Asiamiles which is most useful to me. I have family in HK, so KrisFlyer means an extra stop which is a pain.

Citibank Select gives Asiamiles at a higher rate than Amex and unlimited.

 

[sparoz]

Citibank Select gives Asiamiles at a higher rate than Amex and unlimited.

May be I should look into adding that card in. Thanks.

 

[RichardKopf]

Stephen65, we are going in circles, I suggested the same on page 4.

My understanding now is that Amex is clearly better for people who spend millions as it is hard to get such a high spending line on any other card without prepaying the monthly bill. Then the Centurion does give 125-150k more points.
On the other hand, there are clearly other ways to earn more points, but this does require prepaying the monthly bill when your spend is too high.

This prepaying accounts before spending the money really makes no sense. It requires that you have $250k-$300k 'loaned' to the bank to earn points.

By using Amex and gaining the cashflow it allows, and keeping my $300k in an interest-earning online account we earn around $15000 in interest, annually. This more than covers any difference between Amex and bank issued cards. As a few of us have agreed, if one has a high spend, no bank cards can offer even close to the value of Amex.

 

[exp1k]

This prepaying accounts before spending the money really makes no sense. It requires that you have $250k-$300k 'loaned' to the bank to earn points.

By using Amex and gaining the cashflow it allows, and keeping my $300k in an interest-earning online account we earn around $15000 in interest, annually. This more than covers any difference between Amex and bank issued cards. As a few of us have agreed, if one has a high spend, no bank cards can offer even close to the value of Amex.

Right, but you have to pay tax on the interest while points are tax free. If lots of your spend is overseas, then Citibank gives you fee free transactions (a savings of 3% on your overseas spend, which might be more than the lost interest on the 300k deposit) plus you earn 3.33 SQ/CX miles per dollar.
It depends on the situation, but I would not disregard this possibility outright.

 

[exp1k]

In summary: Centurion for domestic spend and Citibank Select for overseas spend. If the monthly overseas spend is higher than the monthly credit line, then in my opinion it is worth prepaying the difference.

 

[Stephen65]

You also have to be careful putting cards into credit before a big spend as many CC reward program rules specifically exclude you from earning points if your card has a positive balance. Whether this is actually enforced I don't know.

It's true that you can get a larger credit limit effectively on Amex charge cards than on bank cards so this is an advantage of Amex if you need to make large payments but you can do this on any Amex charge card - somebody who spends enough on their green charge card can have a higher limit than any Centurion user.

Over time I've used this to work my Plat charge limit up to the extent where I can cover an entire BAS if I want on it but then I am only paying hundreds of thousands in tax and not millions. If you have millions to spend then you're in a different kind of world when it comes to finding the best cards.

 

[sparoz]

Right, but you have to pay tax on the interest while points are tax free. If lots of your spend is overseas, then Citibank gives you fee free transactions (a savings of 3% on your overseas spend, which might be more than the lost interest on the 300k deposit) plus you earn 3.33 SQ/CX miles per dollar.
It depends on the situation, but I would not disregard this possibility outright.

I am sure we have ways to manage our cash flow into non-deductible debt somewhere. The citicard sounds good, except it would be limited by the credit limit. Any non-wage earner with a good accountant earns only 80k/year which is below the threshold. With a 50k limit, it might be worthwhile - that's another 200k asiamiles.

 

[Stephen65]

One thing I don't like about Citibank is they are very intrusive in terms of wanting financial data. I put up with it to get my Citibusiness Gold card because I like the high Visa earn rate but after having it for a year, putting a lot through it and paying it all off on time I thought I might bump the limit up. At CBA they would be begging me to increase my limit in those circumstances but Citibank wanted to do a financial proctology exam on me so I decided I couldnt be bothered just for a limit increase.

 

[exp1k]

I am sure we have ways to manage our cash flow into non-deductible debt somewhere. The citicard sounds good, except it would be limited by the credit limit. Any non-wage earner with a good accountant earns only 80k/year which is below the threshold. With a 50k limit, it might be worthwhile - that's another 200k asiamiles.

I didn't know the Sunshine Coast has that much in common with Italy or Greece

 

[sparoz]

You also have to be careful putting cards into credit before a big spend as many CC reward program rules specifically exclude you from earning points if your card has a positive balance. Whether this is actually enforced I don't know.

It's true that you can get a larger credit limit effectively on Amex charge cards than on bank cards so this is an advantage of Amex if you need to make large payments but you can do this on any Amex charge card - somebody who spends enough on their green charge card can have a higher limit than any Centurion user.

Over time I've used this to work my Plat charge limit up to the extent where I can cover an entire BAS if I want on it but then I am only paying hundreds of thousands in tax and not millions. If you have millions to spend then you're in a different kind of world when it comes to finding the best cards.

This is true but it comes back down to if you can hit your cap even including other cards in your portfolio. If so, you might as well get the Cent as it is already paid for by the extra MR points. You just get the other benefits for free.

 

[sparoz]

I didn't know the Sunshine Coast has that much in common with Italy or Greece

- I wish I can just do a lol reply

 

[RichardKopf]

Gentlemen, it's midnight. Let's go to bed!

 

[cove]

That last post might presume that there is one cluster of Centurion card holders in the world. Has anyone priced the US version of this card and checked the differences in benefits?

 

[RichardKopf]

That last post might presume that there is one cluster of Centurion card holders in the world. Has anyone priced the US version of this card and checked the differences in benefits?

Yes, there are many thread in other forums comparing the dozen, or so, Centurion cards around the world, but Australians can't get a US card, unless they reside in the US. Th US card has a 5000 joining fee plus a 2500 annual fee. The benefits are more valuable. Recent Xmas gifts to holders have included a Tumi carry on filled with gifts such as video recorders.