Even The Rich Can't Get Credit These Days

All of the talk today when it comes to the economy is the "frozen" credit market. $350,000,000,000 of money from our taxes hasn't seemingly done anything to slow down the foreclosure rates as U.S. banks are simply using the free government money to cover the butts while loaning to basically nobody.

I was told of a local "agent" who offered to put $1,500,000 down on a $3,000,000 home with a bank that he and his clients have over $30,000,000 in deposits with and a long standing relationship and he was rejected. He makes many millions of dollars per year and thankfully pulled a solid eight figures out of that small bank. Perhaps they will go out of business as they certainly deserve to suffer.

During my wedding, I got a Citibank American Airlines credit card as American and United are the two best airlines to fly on out of Los Angeles if you like to fly (upgrade) to First Class. I racked tens of thousands in spending which I responsibly paid down to a zero balance. Without notice my credit balance was dropped from $35,000 to $6,800. I asked Citi - a company I have a seven figure mortgage (man, I can't wait to pay that monster down/off) - to increase the limit as I just used 60k of the 90k miles I have in my American Airlines frequent flyer mile account and they plain refused. I told them of the business I send them for my mortgage and three different people up the food chain could care less. Like the agent above - I pulled my business and canceled the card on the spot. I don't care what it does to my FICO score. I can't do business with Citibank if that is how the treat a customer like me.

My good friends has one of those American Express "Black" or Centurion cards that supposedly have no limit. Guess what - they DO have a limit. His was $250,000 and he spends a TON on the card with his business for which he, of course, pays off in one month. AMEX dropped him to $120,000 which still seems high but when you are buying millions of dollars in parts from every corner of the world - its a major pain.

Both my buddy with the Black Card and I in the past week have had our zero balance home equity loans "frozen" by the bank that issued them citing a drop in home value. Both homes have more than four times the amount of the equity line in home equity on the worst day but seemingly everyone in Southern California are getting these cutbacks.

The moral of the story is no matter what your income, FICO score or borrowing power - do not forget what these greedy banks have done to the U.S. Economy and to you as a consumer. Punish them whenever possible by pulling your business and or paying off your debt. In the mean time, the people who spend the most in the economy are less and less able to spend anything because the banks are sitting on the free money they got from Congress specifically to free up their lending.

AMEX and Sentient Jet Team Up With The Business of No

I stopped using my American Express Card a few years back when after spending over $140,000 for that callendar year the company refused to offer me a "black" (Centurion) card as the standard was $150,000 in yearly spending (its now over $250,000 reportedly). I informed a Sr. vice president of customer service at AMEX that I was getting married the next year and had a home in Los Angeles that I was fully renovating and that I would gladly pay their $4,000 fee for the card. Even with $100,000's of pending spending in the near future I was denied the card therefor I moved my business to Chase who has both a business and personal card that gives me valuable United Airlines miles. I have racked up nearly 1,000,000 since then and have cancled all but one of my three AMEX cards as I don't want to lose the 590,000 AMEX rewards miles. Overall I am very happy with my decision to cut my AMEX spending down to a mere few $100 per year.

This week I received a glossy printed book about my many options for AMEX miles and over a luxurious, Jared-inspired Subway six inch "club on wheat" I read through the book. I have always thought the best value in credit card miles is to use them for flight upgrades. You can spend $700,000 and get a $4,000 watch if you like but you can also buy a $1,500 coach ticket from Los Angeles to London and upgrade it with 50,000 miles to a $17,000 business class ticket thus getting a lot more value for your miles if your are inclined to fly in Business or First Class.

Towards the back of the brochure was a promotion that caught my attention. An attractive couple were stepping out of what looked to be a Challenger 300 private jet featured on a right-facing page. The copy on the promo said that AMEX has "flight experiences starting at 500,000 miles with partners like Atlantic Aviation, Delta (private) and Sentient Jet. With an upcoming trip from LA to Pebble Beach in December, this got me to put my cardboard-tasting sandwich down and call the 800 number. I just had to know what my 500,000 miles got me. I didn't expect much but anything helps right?

At my new offices I have phones that count off the time you are on the phone. It was 19:45 on hold with AMEX before someone picked up. The person quickly realized I needed to be handed off to the "land and sea" department and waited on the line with me until I got to a woman to help me. The problem is - she couldn't pronounce Sentient Jet let alone explain to me what the program was with the charter and jet membership company. At around 32:00 into the call - she transferred me to Sentient Jet.

A minute later, I had a guy on the phone who knew a LOT more about private jet travel and he needed to have someone get me a quote for my trip on a shorter basis and or see how my 500,000 miles would pay for part of one of their "membership cards" which I assuredly would be adding tens upon tens of thousands of dollars to. This gentleman, who sells one of the world's most fantastically luxurious commodities on the planet Earth, said he would have someone get back to me the next day with a full quote for both options. He took down all of my info - specifically about the trip up to Monterey, the airports, the aircraft I might want to use etc...

Its been five days with no return phone call or follow up from Sentient Jet.

In America, you can outsource your customer service to Bangalore or New Delhi or you can keep it right at home but as long as you don't know how to close and or don't care if you close a qualified client - the results will always be the same and those results are not good. When the economy is booming or during difficult times like now, truly qualified clients are hard to come by and when you get them on the phone - closing them should be a company's top priority. AMEX walked my business because of their ultimate arrogance and Sentient hasn't made much of a statement about how much they want my future business or my up-sell to their $50,000 membership card. Even in the straosphere of luxury, you still can find companies mired in the Business of No.

I am sure there is someone who wants to earn my business for this flight even if its United Airlines. Perhaps I should save the money and buy stock in companies who are in the Business of Yes? How is Berkshire Hathaway stock looking these days?

United Front on Bad Customer Service (Chase Bank)

My last post was about American Express and their arrogance/stupidity with their benefit-deprived Black Card but the other credit card banks are not unfortunately much better.

Instead of a Black Card from Amex, I ultimately chose a United Platinum Visa from Chase Bank which gets me miles on an airline with a hub in Los Angeles which has helped me be able to get upgrades for most of the flights I have traveled on in the past three or four years. My AMEX miles are still sitting in their account with it being literally impossible to redeem. Trust me, I tried to use them. Those 750,000 miles are plenty to buy my wife and I a first class trip to Paris and one call to Delta (Amex's biggest mileage partner) got me flights stopping in Salt Lake, Atlanta and then on to Paris thus adding 6 to 8 hours onto an already intolerably long flight. They were blacked out on the direct flight from LAX to de Gaulle in Paris. The last time I tried to book flights to Maui on Delta (they have 2 a day from LAX non-stop) the agent had me leaving LAX at 6 AM going to Salt Lake, connecting to Honolulu and then being stranded there needing another flight. What a great solution. I flew on United and used miles to upgrade.

Today I got an email offer from Chase Bank to upgrade my card to the Gold level. While I have platinum card from them (whatever that means) yet they are touting double miles, no mileage blackout dates (see nightmare above) and other perks. They provided a web link from the email that that was broken. They offered an 800 number and I have been on hold for 31 minutes and counting waiting for them to answer. Their first level customer service girl was "going on her break" and didn't have any idea how to help me. This wait - which is more of a war now and I am curious to see how long the wait would be - may not be over anytime soon. Note: they sent the offer by email but offered no way to correspond by email to take the offer.

All advertising in my opinion boils down to Cost Per Acquisition of client meaning you spend all the money you spend on advertising and marketing to ultimately get quality leads and from those leads you close whatever percentage you can. If you spent $1,000,000 on email campaigns - wouldn't it be nice to know you closed X number of upgrades and each cost you Y per customer? In this case - I was interested customer who is packing significantly above 800 credit. The email got me on the hook and that is where I died as a lead. There was no reasonable way convert and that is a waste of their money and my time.

Ultimately, it was 37 minutes before I got someone on the phone from Chase who explained to me that the Gold card is really a downgrade over the Platinum card I have and that the offer is only for my personal card and not my business card - where I book most of my travel anyway. Brilliant.

Its nice to know AMEX doesn't own a monopoly on moronic marketing and bad customer service. While unquestionably arrogant - at least AMEX picks up the phone faster than 37 minutes.

AMEX's Black Card Is Really A Black Mark On Their Customer Service Record

I understand the martkeing magic of the red velvet rope. The idea that one cant get into Studio 54 or Sykbar only speaks to your human instinct to truly lust after what you can't have. Once inside, you will rationalize the $22 crappy martini and even think the $3,000 a night hooker/actress/real-estate-agent might really "like you" when she over heard you talking about the movie project you have "in development".

American Express suffers from the same velvet rope malady with their lofty Centurion or "black card". Originally offered to their biggest spending clients who spent $150,000 or more per year (its reportedly $250,000 per year in spending now to be invited to get a Black Card) - the card quickly because a status symbol for the very wealthy around the world. Amazingly the card card comes with as much as $4,000 in fees yet the perks of the card (other than the status of plunking it down to pay for your $800 bottle of Cristal via "table service" in San Tropez) are few as well as being avaiable from other companies for far less money.

When the standard for getting a Black Card was $150,000 per year in spending and a $2,500 fee - my company spending was $140,000. My father convinced me to get an AMEX card before I went to college as I wouldn't spend beyond my means as most college kids do - and his advice was excellent as ususal. As my company and spending grew I got a gold card from Amex and ultimately was invited to get a $400 per year platinum card - which I still have today. I was a loyal AMEX customer for more than a decade thus accumualting points to use for a trip someday (note: AMEX has no meaningful relationship with any of the LA-based airlines like United or American Airlines) to somewhere exotic.

Knowing I was spending a lot on my company, that I was about to renovate a home and that I was going to get engaged thus needed a ring and the full Hotel Bel Air wedding - I called Amex to ask for a Black Card. The level of "the Business of No" I got was astounding. Note: I was $10,000 away from their spending limit at the time and was poised to spend hundreds of thousands more dollars and they told me absolutely no on the black card. I went back and forth with one seniour customer service person who tried to help me but to no avail.

Can you imagine what it costs to earn a client who spends strongly both for his company and personally as well as has a merchant account? Imagine the three percent fees disappearing because that's just what they did. I canceled all but one of my AMEX cards (they can be good overseas) for which I use to maintain the miles I can't find a way to use to go anywhere. I signed up for a United Airlines card which has no prestige whatsoever other than the fact I use the miles I get from it to ALWAYS fly first class on every trip I make on the airline. I am still trying to book a flight to use my Amex miles on one of their partner airlines like Delta. Delta tried to get me to fly to Paris with connections in Salt Lake City, Atlanta and then to Paris. Right.

Warren Buffett should bitch slap the CEO of American Express during his once a year during his once-per-year meeting. There is a reason why you walk into a restaurant and they say "I am sorry sir, we don't take American Express" That's because they too have been screwed or insulted. American Express needs to lean the Business of Yes to retain the wealthy clients of the future.