With These VIP Credit Cards, Who Needs Plastic?

AMEX Black Card
"The very rich ... are different from you and me." So goes the famous quote from F. Scott Fitzgerald. The author was right; for proof, peek inside a wallet.

Most people hold a set of plastic rectangles representing credit and debit cards. But the wealthy aren't most people. These elite spenders often pack spending hardware that's made, quite literally, of stronger stuff.

When in Rome

The most exclusive card on the market derives from an urban legend. Back in the bad old days of the 1980s, rumors started to swirl about a no-limit "black card" issued by American Express (AXP) to only a hand-picked group of its most financially endowed clients.

That card was a figment of someone's imagination. But in the right hands, hot rumor can be turned into free publicity.

So it was with AmEx, which in 1999 created a black-hued charge card, named the Centurion. Ever since, it's been considered by many to be the most desired purchase facilitator available on the market.

Centurion is built of titanium -- all the better to feel the strength of its buying power, apparently. Adding considerably to the snob appeal, obtaining the card is by invitation only. Only an estimated 17,000 people are Centurion holders (compared to 107 million AmEx-branded credit cards in circulation at the end of 2013).

The privileges include 24/7 personalized concierge service, free access to certain airport lounges and a host of other goodies. Holders have to pay an "initiation" fee of $7,500 and an annual fee of $2,500. And that's only the beginning -- in order to keep Centurion, a minimum of $250,000 must be spent on it every year.

Visa's Heavy Metal

Perhaps you prefer your sky's-the-limit card to be made of a more traditional material. In that case Visa's (V) Black Card is built of stainless steel, like an old car or a broadsword.

Like AmEx's faithful Roman soldier, Black Card membership will buy you round-the-clock concierge assistance, travel discounts and rewards and airport lounge access. For globetrotters, one major enticement is that foreign transaction fees are waived when it's used for purchases abroad.
Visa charges an annual fee of $495 for the privilege, and potential holders apply for a Black Card, much like users of the more traditional plastic variety.

Chasing Wealth

Financial-services giant JPMorgan Chase (JPM) forges its exclusive credit card partially with an uncommon metal, palladium. It's so proud of this, it's even named the card after the material.

%VIRTUAL-article-sponsoredlinks%The company's Palladium Visa has the usual expected high-end perks, including that 24-hour concierge service, and airport lounge access. And according to Time, the annual fee is $595, though a spokesperson wouldn't confirm that figure to the magazine and said it the card was geared toward clients who were already customers of the bank's private wealth management and investment bank.

One element that sets JPMorgan Chase's card apart is its "smart chip." This feature is standard for payment cards in countries all over the world -- except for the U.S. This gives it a competitive edge among the well-to-do; no matter how fancy a card, it's limited if it can't be read by payment systems commonly in use abroad.

Swiping in Style

Most card issuers and many financial institutions have their own versions of high-end cards, which share certain similarities. Black is the color tinting both MasterCard's (MA) upper-crust World Elite and the high-end card issued by Coutts, an old British banking house that counts the royal family among its clientele. But neither has the cachet and wow factor of a sleek piece of unusual metal.

In the rarefied world of high rollers, it's not only what you buy, it's the impression you leave as you pick up the check. For that, it's hard to beat those fancy metal cards.

Motley Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends American Express, MasterCard and Visa, and it owns shares of JPMorgan Chase, MasterCard and Visa.

Why Your Bank Thinks Someone Stole Your Credit Card
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With These VIP Credit Cards, Who Needs Plastic?

One reason why Marquis' gas purchases might have triggered a fraud lockdown? Filling their tank is a common first move for credit card thieves.

"Some of the things they look at are small-dollar transactions at gas stations, followed by an attempt to make a larger purchase," explains Adam Levin of Identity Theft 911.

The idea is that thieves want to confirm that the card actually works before going on a buying spree, so they'll make a small purchase that wouldn't catch the attention of the cardholder. Popular methods include buying gas or making a small donation to charity, so banks have started scrutinizing those transactions.

Of course, it's not a simple matter of buying gas or giving to charity -- if those tasks triggered alerts constantly, no one would do either with a credit card. But Levin points to another possible explanation: Purchases made in a high-crime area are going to be held to a higher standard by the bank.

"It's almost a form of redlining," he says. "If there are certain [neighborhoods] where they've experienced an enormous amount of fraud, then anytime they see a transaction in the neighborhood, it sends an alert."

(Indeed, Erin tells me that one of the gas purchases that triggered an alert took place in a rough part of Detroit, which she visited specifically for the cheap gas.)

People who steal credit cards and credit card numbers usually aren't doing it so they can outfit their home with electronics and appliances. They don't want the actual products they're fraudulently buying; they're just in it to make money. So banks are always on the lookout for purchases of items that can easily be re-sold.

"Anytime a product can be turned around quickly for cash value, those are going to be the items that you would probably assume that, if you were a thief, you would want to get to first," says Karisse Hendrick of the Merchant Risk Council, which helps online merchants cut down on fraud. Levin says electronics are common choices for fraudsters, as are precious metals and jewelry.

Many thieves don't want to go through the rigmarole of buying laptops and jewelry, then selling them online or at pawnshops. They'd much prefer to just turn your stolen card directly into cold, hard cash.

There are a few ways that they can do that, and all of them will raise red flags at your bank or credit union. Using a credit card to buy a pricey gift card or load a bunch of money on a prepaid debit card is a fast way to attract the suspicions of your credit card issuer. Levin adds that some identity thieves also use stolen or cloned credit cards to buy chips at a casino, which they can then cash out (or, if they're feeling lucky, gamble away).

When assessing whether a purchase might be fraudulent, banks aren't just looking at what you bought and where you bought it. They're also asking if it's something you usually buy.

"The issuers know the buying patterns of a cardholder," says Hendrick. "They know the typical dollar amount of transaction and the type of purchase they put on a credit card."

Your bank sees a fairly high percentage of your purchases, so it knows if one is out of character for you. A thrifty individual who suddenly drops $500 on designer clothes should expect to get a call -- or have to make one when the bank flags the transaction. If you rarely travel and your card is suddenly used to purchase a flight to Europe, that's going to raise some red flags.

Speaking of Europe, the other big factor in banks' risk equations is whether you're making a purchase in a new area. I bought a computer just days after moving from Boston to New York, and had to confirm to the bank that I was indeed trying to make the purchase. Levin likewise says that making purchases in two different cities over a short period of time raises suspicions.

"I go from New York to California a lot, and invariably someone will call me [from the bank], " he says. Since one person can't go shopping in New York and California at the same time, any time a bank sees multiple purchases in multiple locations in a short period, it's going to be suspicious.

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