About halfway up One Vanderbilt, the tallest building in Midtown Manhattan, American Express’s 17,500-square-foot Centurion New York lounge boasts floor-to-ceiling windows that make the nearby Chrysler Building’s stainless-steel spire feel like it’s within arm’s reach.
“When you step out of the elevator to go into the lounge, it’s dimly lit, and it’s got this Centurion logo on the floor in lights,” said the 38-year-old financial-technology worker. “It feels really like you’re going to something exclusive.”
Customers who pay $5,000 a year for the Centurion Card, better known as the Black Card, can walk into the lounge whenever they please and reserve meeting or event spaces.Everyone else needs a reservation. Platinum cardholders, like Remy, who pay $695 a year, can try to reserve a table through Amex’s concierge service. Those without either card must call a phone number that only works two hours a day.
Remy first tried to book a table by calling on his own but found it almost impossible: “The phone will just ring and ring and ring.” Thanks to the concierge service, he’s visited the lounge five times since it opened last year.
The Centurion New York is the first permanent credit-card lounge outside an airport or event venue. It marks a new phase in a decadeslong competition among credit-card companies to win over big spenders with perks they market as luxurious and one-of-a-kind.
American Express was the first credit-card issuer to open an airport lounge more than 10 years ago, competing with airlines and prompting JPMorgan Chase and Capital One to race to catch up. Now, credit-card companies are creating lounges and exclusive experiences far from TSA checkpoints—at festivals, stadiums and other venues.
View Full Image
The Chase lounge at New York’s Madison Square Garden offers free food, water and soda, and a stand selling memorabilia that lets fans avoid the long lines at other merch sellers. The megabank took over what used to be the Knicks season-ticket-holder lounge last year and renovated it according to its 40-page branding guidelines for interior decor. Chase-blue walls wrap hardwood floors that mimic the basketball court. The lounge’s shelves are stocked with books on sports history and sneaker culture. From the bar’s orange seats, guests can watch a broadcast of the game.
In YouTube videos, guests share tips on the best ways to get into the Amex space at Crypto.com Arena in Los Angeles, where even people with nosebleed seats can snag an armchair with a good view of the game and two drink tickets—assuming they have the right credit card.
Eligible Capital One cardholders get access to hospitality areas at the arenas that host the NCAA Final Four basketball tournament and experiences including private truffle hunting at the International White Truffle Fair in Italy.
Credit-card companies are willing to foot the costs of operating lounges and hosting special events because they need to stand out in an increasingly competitive market. All cards work pretty much the same way, so issuers have to compete on the perception that their little plastic or metal rectangle opens more doors than a rival’s.
“We wake up every day to think about how we can persuade a group of consumers to agree to take a platinum card and pay us a $695 annual fee,” said Howard Grosfield, Amex’s president of U.S. consumer services.
While some cardholders may value travel rewards over statement credits or vice versa, experiences are popular across the board, according to the company’s internal data.
Though exclusive lounges and presales for concert tickets may not directly generate revenue, they play “an incredibly important role in acquiring new customers,” Grosfield said.
View Full Image
After Delta Air Lines bumped Delta SkyMiles Platinum cardholders out of their Delta Sky Clubs earlier this year, the company reported that more credit-card customers shifted toward more expensive cards like the Delta SkyMiles Reserve American Express card, which still granted access and costs $650 a year, $300 more than the Platinum card whose holders got the boot.
The lounge strategy is to attract customers by associating cards with a certain lifestyle, one that is often exclusive, said marketing consultant Dan Wallace-Brewster. At concerts and some other venues, lounges are highly visible, so people outside the cordoned-off area can see what they’re missing. Citi customers who attend one of the bank’s pop-up lounges before concerts by Maroon 5 and U2 leave with branded, memorabilia-filled gift bags and lanyards, turning them into walking advertisements as they circulate among the general public outside the VIP lounge. The lanyards are just mementos that don’t provide access to any special areas on their own.
“It’s about getting the Citi brand out as much as it is giving our customers access,” said Citi executive Anthony Merola.
For more private spaces, such as the Centurion New York, social-media posts of people clinking glasses and relaxing on couches in front of sweeping views of the city skyline offer a glimpse of the view from the top.
“If you were just using your card to buy something and it worked, your friends and family didn’t see that,” said Ed Olebe, president of branded cards at Chase. “If you take your family to one of these special events, or lounge, they see you smiling and they know Chase, or whoever your card issuer is, brought you that experience.”
He said customers who visited lounges were more loyal and used their cards more frequently than customers who used their credit cards only for points.
Last summer, Quashiera Muhammad, 24, went to a free concert at Hudson Yards and sat in the shaded Wells Fargo lounge as a friend’s plus-one. This year, she signed up for a credit card so she could get in on her own. At a concert last month, she wasn’t familiar with the artist, a pop-rock duo called Ray Bull. It didn’t matter. She arrived early to enjoy the snacks.
“I’m not big on inclusivity,” she said. “I like exclusive things.”
Millennials’ choice
Most credit-card rewards like cash back or airline miles tend to be underused. Americans had more than $33 billion worth of unused credit-card rewards at the end of 2022, according to the most recent federal data available.
By contrast, lounges, private events and concert presales tend to sell out quickly, industry executives said.
Capital One has added more event-related perks to its rewards program to keep up with demand, said Lauren Liss, the bank’s head of premium products, experiences and rewards. Customers, including those who pay $395 a year for the bank’s Venture X card, can sign up for experiences, which cost extra. The truffle-hunting trip is $3,200 a person, including a pasta-making class with Michelin-starred chef Ugo Alciati and lodging. For $1,000, cardholders can buy a seat at Wiederhoeft’s runway show during New York Fashion Week and a private after-show dinner with the designer. Travel costs are not included in either package.
View Full Image
Capital One’s Taylor Swift ticket presale harnessed a particularly devout fan base to showcase cardholders’ perks and lure new customers. Focusing on experiences is also a way to cater to younger consumers who spend more on travel and dining than material possessions. Amex said people under 35 years old accounted for more than half of newly opened consumer Platinum and Gold cards in 2023.
Citigroup cardholders could buy tickets to events like Lady Gaga and Usher concerts before the general public. Those early ticket sales rose 88% from 2022 to 2023, according to the bank.
Once customers purchase a concert ticket, Citi tries to persuade them to spend more on the card by reminding them of complementary rewards, like triple points for dinner after the show on the bank’s Strata Premier card.
Toilets that flush
Maddie Hasiewicz considered paying an extra $330 a person for “General Admission Plus” passes to the Lollapalooza music festival earlier this month. She decided to take advantage of the Chase Sapphire Reserve Lounge instead. Inside the air-conditioned lounge, cardholders had access to free refreshments, couches and cocktail tables with direct views of the main stage and toilets that flushed, rather than the portable kind—luxuries in the early-August Chicago heat.
Throughout the day, staff walked around with trays of finger sandwiches, prosciutto-wrapped melon and taquitos. During designated happy hours, attendees got tokens for free drinks at the private bar.
Since users of the $550-a-year card were allowed to bring only one guest to the lounge, she spent $75 to add her fiancé to her account before the festival. That way the two of them could get in, along with her sister.
View Full Image
“I told him he needed to upgrade,” she said between sips of a complimentary Stella Artois. “With perks like this, the annual fee pays for itself,” she said.
Some of the lounges have become so popular, they’re now destinations in their own right. Chase opened a floating Sapphire Reserve lounge on the Seine river during the Paris Olympics to give cardholders a place to wait between events. Some gave up their tickets and instead watched TVs in the lounge, the bank said, citing customer feedback.
Crowded out
But lounges’ popularity could be their downfall when exclusivity is a major part of the appeal, and lines are already a problem at airport lounges.
Chase limits lounge capacity. At Lollapalooza, some unlucky concertgoers said they waited outside the bank’s lounge for hours before giving up.
“Just like with an airport lounge, you can’t open it up beyond capacity and try to make a few more people happy because then it sort of collapses on itself, and nobody has a great experience,” said Olebe.
New York Knicks fan Allen Cruz reserves his spot in the Chase lounge at Madison Square Garden before he buys actual game tickets. Reservations open for each event a month in advance and usually fill up within minutes.
“You have to be diligent,” he said.
He arrives as soon as doors open for “lounge out” time an hour before tip off, he said. He estimates the free food and drinks at the lounge save him about $50 a game. The lounge buffet offers a rotating mix of stadium staples like chicken tenders and mozzarella sticks and cocktail bites like Bloody Mary shrimp shooters and spring rolls.
Some cardholders say the novelty of perks is wearing off. Jon Choi has more than a dozen credit cards and has used them to enter lounges, access ticket presales and score reservations at hot restaurants.
“It feels more like a coupon book,” said Choi, 34 years old, who works at Amazon.com and lives in Seattle.
Companies rely on customers to brag on social media about their experiences, but showing off a place can threaten its exclusivity. Ian Johnston, who has a Platinum Amex, posted photos of his visit to the Centurion New York last year on Instagram. The slideshow of images, shared with more than 28,000 followers, featured his dinner and the lounge’s views.
Johnston, who travels a lot for his job as a TikTok program manager, said he worries the Centurion could meet the same fate as some airport lounges.
“I don’t want to promote it too much because I don’t want to wait in line,” he said.
Write to Imani Moise at imani.moise@wsj.com and Katherine Hamilton at katherine.hamilton@wsj.com