By Adam Jusko, ProudMoney.com, firstname.lastname@example.org
I learned recently that Black Card LLC, which issues the Mastercard Black Card (as well as two other “luxury” cards), is suing Visa, Chase, and Capital One, accusing those companies of conspiring to hurt Black Card’s business in order to gain a competitive edge in wooing affluent customers.
Is it true? I don’t know. But, to me, if you are going to sue your competitors and claim they’ve conspired against you to corner the market on “luxury” customers, it would help your case if you had a superior product that was being obviously squelched by dirty competitor tactics. That’s why I’ve decided to pit the Mastercard Black Card vs. the Chase Sapphire Reserve to see how the Black Card stacks up. Is it a better card that’s been outfoxed and outspent by its deep-pocketed rival? Let’s compare…
Both of these cards charge a hefty annual fee, with the idea that the benefits will more than make up for that payment. Specifically:
- The Mastercard Black Card charges a $495 annual fee.
- The Chase Sapphire Reserve has an annual fee of $450.
Similar, though the Sapphire Reserve is a bit cheaper.
Yearly Travel Credit
In the world of high-end travel cards, the size of the travel credit is important, because, assuming you travel enough to qualify for the credit, it can be seen as directly canceling out part of the annual fee. In comparing these cards we see that:
- The Mastercard Black Card offers a $100 annual credit against your airfare spending with the card.
- The Chase Sapphire Reserve offers a $300 annual credit against travel purchases made with the card.
If you buy the idea that subtracting the travel credit from the annual fee is a good way to assess a card’s other strengths, then the Mastercard Black Card’s effective annual fee would go down to $395 ($495 annual fee minus $100 travel credit) while the Chase Sapphire Reserve’s effective annual fee goes down to just $150 ($450 annual fee minus $300 travel credit). The Chase Sapphire Reserve is much stronger on this count.
On the surface, doing an apples-to-apples comparison is somewhat difficult here. Let’s look at what each offers and see what we think…
- The Mastercard Black Card offers 1 point per dollar spent with the card. If you’re thinking that sounds paltry, it is not — when you redeem those points, they are worth 2 cents per point if used toward airfare, or 1.5 cents when used toward a cash reward. In other words, think of it as a 2% rebate if used on airfare or 1.5% if cash back.
- The Chase Sapphire Reserve offers 3 points per dollar on travel and dining purchases, and 1 point per dollar on any other purchases made with the card. Like the Black Card, the value of each point depends on how you use it. You can get a 50% premium on your points when you use them for travel purchases through the Chase Ultimate Rewards travel portal, making each point worth 1.5 cents. If used any other way, the points are worth 1 cent each.
There is no clear-cut winner here, though in most cases we believe the Chase Sapphire Reserve will win the day. Two examples:
- If you spend $10,000 in a year with the Mastercard Black Card and use the 10,000 points you earn toward airfare, those points would have a $200 value toward airfare. If you spend that same $10,000 with the Chase Sapphire Reserve, with half of that spend being dining and travel, you would earn 20,000 points. If used toward travel, those points would be worth $300. In this example, the Sapphire Reserve nets you 50% more than the Black Card. (Alternately, if the points were used for cash, the Black Card would net you $150 and the Sapphire Reserve would earn $200.)
- Again, if you spend $10,000 in a year with the Mastercard Black Card and use the 10,000 points you earn toward airfare, those points would have a $200 value toward airfare. If you spend that same $10,000 with the Chase Sapphire Reserve, but only $1500 is spent on travel/dining purchases and $8500 is spent elsewhere, you would earn 13,000 points. If used toward travel, those points would be worth $195, a shade lower than the Mastercard Black Card. (Alternately, if the points were used for cash, the Black Card would net you $150 and the Sapphire Reserve would earn $130.)
So, we can create scenarios in which either card might have the upper hand. However, for people that travel with any regularity, we believe the breakdown between travel/dining purchases vs. other card purchases is likely to be closer to the first example than the second. In other words, we believe most cardholders would do better in rewards earned with the Sapphire Reserve than the Mastercard Black Card.
This one’s easy…
- The Mastercard Black Card does not offer any potential bonuses for new cardholders based on initial spending.
- The Chase Sapphire Reserve offers a potential bonus of 50,000 points if you spend at least $4000 with the card in the first three months. While that is a high spend, the reward is big — worth as much as $750 (if used toward travel) and at least $500 (if taken as cash back).
Airport Lounge Access
Both cards offer the same Priority Pass Select program, which gives you access to a large network of airport lounges and airport restaurant vouchers across the United States and the world.
This one is also easy…
- The Mastercard Black Card does not have any travel partners with which you can transfer your points in order to boost your points/miles in those programs.
- The Chase Sapphire Reserve offers a number of airline and hotel partners including United, Southwest, JetBlue, Marriott, Hyatt and more.
Being able to transfer points in this way is important to many frequent travelers. Chase clearly wins here.
- The Mastercard Black Card promises “Throughout your membership, receive Luxury Gifts from some of the world’s most iconic and recognized brand names.” However, it also states “The gift program has no predetermined schedule or frequency.”
- The Chase Sapphire Reserve does not offer any “luxury gifts.”
This is actually a place where the Black Card could differentiate itself, but it only makes the vaguest of promises that you get some sort of unknown luxury gift at some unknown time. It’s understandable that they might not know what the luxury gifts will be in the future, but how about telling us what some of the past gifts have been so we can see if this is really a perk or just lip service?
As I said at the beginning of this article, Black Card (the company) might have a better case against Chase, Visa, and Capital One if it had a superior product that was being suppressed in the market. And, who knows, perhaps it could make the case that anti-competitive practices have stopped it from providing stronger benefits. But, as the above comparison demonstrates, the Mastercard Black Card has a higher annual fee than the Chase Sapphire Reserve while clearly delivering an inferior offering when it comes to the perks that affluent cardholders are likely to want most. While it proves nothing in terms of the specifics of a lawsuit, it is very difficult to see why anyone would choose the Black Card over the Sapphire Reserve based on the merits of each card.