Daily Money - Harry Styles and I have this in common

Hi y’all —

Happy Valentine’s Day! If I could, I’d send each and every one of you a handmade card with a sappy note about how much I love you for subscribing to Dollar Scholar.

Unfortunately, I don’t have enough stamps. So instead we’re going to talk about a different type of card: the payment kind.

For most of my life, I only ever had debit and credit cards made out of plastic. I thought nothing of it (I was more focused on my panda, RIP). When I got my Chase Sapphire Preferred last year, though, I was surprised to discover the card was metal.

In my mind, credit and debit cards made of metal are reserved for the elite. Metal cards get perched between Harry Styles’ teeth at the pool, not tucked into my $20 Amazon wallet. But suddenly I’m part of the club. And although having a metal card does make me feel fancy, I’m not sure what I did to deserve it — or what determines which card materials are used in the first place.

Why are some credit cards metal?

Let’s start with a brief history lesson. Decades ago, before they were widely available, charge and credit cards tended to be made out of paperboard or celluloid. The landscape changed in 1959, when American Express became the first lender to introduce a plastic version for better durability and data capture. Magnetic stripes were developed soon after, and the industry standards were set.

Today, the International Organization for Standardization manages specifications for payment cards (like height, width and thickness), according to James Sufrin, the North America senior vice president for payment services at IDEMIA. As a result, most cards are made of PVC, which works well because it’s resistant to water and wear.

But as time has gone on, Sufrin says, card issuers, banks, credit unions and fintechs have started to look for “opportunities to enhance their customers’ experience.” Their solution? Changing the substrate, or material, people’s cards are made from.

“The card is the issuer’s brand,” he adds. “It’s really important that whatever that customer gets reflects what the issuer wants that brand and that brand image to be.”

Take American Express, for instance. In 1999, the company debuted its titanium Centurion Card, which has secret requirements and extravagant perks. The intended vibe was exclusivity, a quiet I-have-this-and-you-don’t message broadcast to others. As one cardholder wrote in the Financial Times: “Word gets around. People ask to see this thing. So the first thing you buy with your black anodized titanium credit card is social cachet. Tick.”

Not all lenders want to promote that posh image, though. Some take a different approach, offering metal cards to the general public.

Sufrin points to the 2016 launch of the metal Chase Sapphire Reserve as the moment the metal-card trend “caught fire.” Within days of its reveal, the cards became so popular that Chase ran out of the metal it needed to make them.

To be clear, these companies aren’t issuing metal cards out of the goodness of their hearts. They want to see it reflected in their bottom line, and Sufrin says they all have research that backs up their manufacturing choices. Some have found that customers don’t feel PVC is rigid enough; others are truly convinced that offering metal cards drives more usage.

Their goal is to be what’s called “top of wallet” — the card customers reach for most often. And tbh, the hype helps: In a 2022 survey from CompoSecure, 70% of respondents said they’d select a financial product with a metal card if all else was equal. A separate analysis by IDEMIA found metal cards were particularly popular with Gen Zers and millennials.

"In other words, the customer segments that will dominate future global spending want to pay with metal cards," the IDEMIA report reads. "This has not gone unnoticed by challenger banks."

Upticks in demand and advances in technology have increasingly made metal cards more common. At the same time, lenders are learning that the top-of-wallet status they're seeking isn’t only unlocked by metal.

Sufrin says he’s had to field requests before from brands that wanted wooden or glass cards — yikes — and, more recently, has seen interest in biodegradable and eco-friendly cards pick up.