A real T-shirt-and-jeans kind of guy, Peter H. Shankman certainly doesn't look like a high roller, but American Express Co. (AXP) knows better. After he was snubbed by salesmen at a Giorgio Armani boutique on Fifth Avenue in New York recently, the 31-year-old publicist -- who was made available to BusinessWeek by AmEx -- saw "an unbelievable attitude reversal" at the cash register when he whipped out his black AmEx Centurion Card. In June, a RadioShack (RSH) cashier refused the card, thinking it was a fake. "`Trust me,' I said. `Run the card,"' recalls the chief executive of Geek Factory Inc., a public-relations and marketing firm. "I could buy a Learjet with this thing."
An exaggeration, perhaps. But AmEx' little black card is decidedly the "It" card for big spenders. Launched in late 1999, Centurion is given out by invitation only to customers who spend at least $150,000 a year on other AmEx cards and meet other requirements. The chosen cardholders pay an annual fee of $2,500, raised from $1,000 two years ago.
Although AmEx has spent zilch on promotion, some would-be customers go to absurd lengths to get what they see as a must-have status symbol. Hopefuls have written poems to plead their case. Others say they'll pay the fee but swear not to use the card -- they want it just for show. "Every week I get phone calls or letters, often from prominent people, asking me for the card," says AmEx' head of consumer cards, Alfred F. Kelly Jr.
Who, he won't say. In fact, AmEx deliberately builds an air of mystery around the sleek card, keeping hush-hush such details as the number of cards in circulation. Analysts say AmEx earns back many times what it spends on perks for black-card customers in both marketing buzz and fees.
The card is now being flattered by imitators. In April, Merrill Lynch & Co. and MBNA Corp. launched a black-colored Visa card with a credit limit of up to $250,000. The card offers bonus points that can be used to pay for brokerage charges -- or a night at the Ritz. "Our goal wasn't to come out with a me-too card," says Peter Barsoom, director of card payments for Merrill Lynch. "Our clients needed a better card in their wallet." J.P. Morgan Chase & Co. also is sizing up its own version. Says Jamie Dimon, the bank's chief operating officer and president: "We may want to try to outdo that at some point."
Basic services on the Centurion card include a personal travel counselor and concierge, available 24/7. Beyond that, almost anything goes. Feel like shopping at Bergdorf Goodman (NMG) or Saks Fifth Avenue (SKG) at midnight? No problem. Traveling abroad in first class? Take a pal -- the extra ticket is free.
The royal treatment often requires elaborate planning. One AmEx concierge arranged a bachelor party for 25, which involved a four-day trip that included 11 penthouse suites, travel by private jet, and a meet-and-greet with an owner of the Sacramento Kings basketball team. The tab was more than $300,000.
How did Shankman, who says his firm has no business dealings with AmEx, earn his card? All the travel and entertainment charges he racks up hosting his clients prompted AmEx to send it to him. It arrived in December, along with a 43-page manual. Recently, Shankman sought reservations for Spice Market, an often-overbooked restaurant in Manhattan, to impress a friend. He called his concierge. "Half an hour later it was done," says Shankman. Membership does have its privileges.
By Mara Der Hovanesian in New York