Home > Credit Cards > The Newest Credit Card You Probably Can’t Get: Magnises

Comments 3 Comments

Here are some questions you don’t normally see on a credit card application: Where did you go to school? Where are your favorite places to dine out and shop? What do you like to do for fun?

In short: Are you cool enough to be part of our club?

That’s exactly what Magnises, the newest luxury card to hit the market, wants to know about applicants. People aren’t applying for Magnises because they’re looking for a new financial services provider — they’re looking for an all-access pass to some of New York’s most exclusive clubs, restaurants and retailers. If you make the cut, you’re basically giving one of your credit or debit cards an influential facelift, from plastic to black stainless steel.

The Perks of Magnises

CEO Billy McFarland, 22, got the idea for Magnises when looking at his credit cards and realizing how little their benefits related to his lifestyle. From his perspective, the rewards of high-end credit cards are sporadic and irrelevant to 20- and 30-somethings, and he wanted something that impacted his day-to-day life, not a list of rewards he might be able to earn a few times a year.

magnises“Let’s make this card more community-based and offer perks that are actually relevant to and enhance your everyday life,” he said. “It’s got the restaurants you love, the clothing stores, the fitness clubs.”

There’s also a clubhouse in Manhattan where Magnises members can hang out, bring clients and network with each other. Another house just opened in Rio de Janeiro. (Magnises, by the way, doesn’t mean or stand for anything — it’s a made-up word with a nice ring to it, McFarland said.)

The Cost of Exclusivity

If you get into the club, which opened in March, the annual membership fee is $250. Given the target audience for Magnises, that’s pretty reasonable.

“It occupies a little bit of the sweet spot,” said Jason Steele, an expert on credit card products and contributor to Credit.com. A lot of high-end credit cards require an annual fee. “There’s a lot of cards at $100 and a lot of cards are at $500.”

The trick is getting accepted: There are about 2,000 Magnises members in New York, but the company receives about 100 applications a day and accepts between 25% and 35% of them. The typical Magnises member is about 28 years old.

Steele said the concept reminded him of events some credit card issuers hold for their elite cardholders, but the Magnises clientele is a different crowd than the typical high-end credit card user.

“This is clearly appealing to a younger demographic who wants benefits that are tailored to their lifestyle, like nightclubs and shopping,” Steele said. “It’s a neat concept. I think this guy has really hit on something, and it wouldn’t surprise me if he’s successful in New York.”

The network will soon expand to D.C., from which Magnises receives the most out-of-town requests, and after that, the next Magnises city will be Atlanta. (McFarland said they have a higher volume of requests from Los Angeles and San Francisco than Atlanta, but there’s a significant demand from Atlanta, and the plan is to eventually expand westward.)

Steel vs. Plastic — Is Magnises Better Than a Credit Card?

Magnises is essentially a steel upgrade for an existing card you have in your wallet. The card data is duplicated in the magnetic stripe on Magnises, so it’s processed the same way as your original card: Merchants still pay the processing fee, and you still earn any rewards associated with transactions on that card. As long as that card is valid, you can use it on Magnises, and if you need to change the account on your fancy status symbol, you can. There’s also a mobile application for it.

Magnises isn’t trying to change the high-end credit card industry, McFarland said. The company is focused on community, rather than financial services. You can also hook up a debit card to your club account, if that’s your preferred payment method.

As exciting as the idea is, most people aren’t cool enough to get in on the Magnises action. Even if you are, you have to be a New Yorker to access the perks, so you’re stuck with traditional credit cards for now. They may not be all-access passes to exclusive locations in the Big Apple, but these cards still carry serious benefits, and not all of them carry expensive fees. Here’s how to pick a good rewards card.

Instead of an impressive social status, you’ll need a great credit score to qualify for the best rewards cards. If you want to rack up benefits with your everyday spending habits, make sure your credit is in good standing before you apply (you don’t want to apply if you don’t think you’ll get approved). You can review your credit data for free, including two free credit scores, through Credit.com.

Keep in mind you should always pay your rewards credit card balances in full every billing cycle, because rewards cards tend to carry higher interest rates than other cards (here’s a primer on APR, if you want to know more), and the cost of paying interest will likely outweigh the value of any rewards you’re earning.

More on Credit Cards:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • ShaStud

    Interesting… Why not..

  • DonTSniffTheBS

    What is a business’s (especially a small business’s) incentive to accept this card?

    • Jessie

      It runs as your normal card that you linked to it. Physically, it’s a hardcopy of an existing credit or debit card.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team