Merrill Lynch Octave review: Details on the newest member of the exclusive cards club

First things first: Most people won’t qualify for this card. It’s an invitation-only product for high-net-worth clients who have $10 million in assets with Merrill Lynch.Merrill lynch octave card

Just curious? Let’s take a closer look at what this card offers – and how you can get some of its fancy benefits for a lower cover charge.

The basics

The Octave is an American Express-branded card (American Express is a CreditCardForum advertising partner).

The annual fee is $950 (high indeed, but a bargain compared to the similarly exclusive American Express Centurion). Foreign transaction fees are waived.

The card is black (the color of choice, it seems, for exclusive cards and for cards that want to look exclusive). To see what it looks like, check out the shots one of our forum members posted here.

The benefits and rewards

Hat tip to MileCards for posting a run-down of the card’s benefits.

This card gets you:

  • 2.5 points per dollar spent. Via Merrill Lynch’s rewards program, you can redeem those points for cash back into an existing account, a statement credit, travel, experiences, gift cards and more.
  • $350 travel credit OR Delta SkyClub Executive Membership ($650 value). Each year, you get to pick one or the other. Executive SkyClub membership allows you to bring up to two guests into the lounge with you for free. For comparison, the lower tier (Individual membership) requires you to pay $29 per guest.
  • 20 percent off base fare for up to two round-trip airline tickets in coach every year. Plus you get an unpublished amount of “savings” on qualified international flights.
  • Savings on private jet flights.
  • A waiver for the Global Entry application fee: When you apply for the Global Entry program (which expedites your re-entry into the U.S. when going through customs), get the $100 fee waived via a statement credit.
  • Airport concierge service.

Worth it?

Whether a card is worth the annual fee is beside the point when it comes to high-end cards; much of their appeal comes from their reputation as status symbols, and you can’t really attach a cash value to that.

However, we can take a look at its rewards program. You get 2.5 points per dollar spent. If you redeem for travel on certain airlines, those points have a lot of potential:
Merrill lynch octave

Redemptions for American Airlines, British Airways, Delta and United flights start at 25,000 points for tickets of up to $500. That means your points have the potential to be worth 2 cents each – a 5 percent return on spending. For other carriers, your points are worth 1.7 cents each, for a 4.25 percent return on spending.

That’s a great rate of return, but keep in mind that $500 is the magic number here. Go below that, and your points are worth less. Go above it, and you’ll need to pay for rest at a 1-cent-per-point value:
Merrill lynch airfares above $500

As you can see, if you redeem your points for travel on specific airlines very strategically, you can get a lot of value. Plus, some of the card’s other benefits chip away at the annual fee: If you make use of the $650 worth of lounge access, book two $350 domestic tickets at 20 percent off and apply for Global Entry, the card provides $890 in value its first year.

How to get similar benefits on other cards

Don’t have $10 million to invest with Merrill Lynch? Private jet discounts probably aren’t that useful to most of us anyway. Besides, you can replicate some of the Octave’s perks with these open-to-the-general-public products.

American Express Platinum ($450 annual fee): The American Express Platinum gives you an Individual membership to the Delta SkyClub, as well as access to Airspace and Centurion lounges. There’s also no need to choose between getting lounge access and getting a travel credit — each year, you can pick an airline and request statement credits (up to $200) for things like checked bag fees and in-flight food. Finally, this card also reimburses you for Global Entry.

U.S. Bank FlexPerks Travel Rewards ($49 annual fee, waived first year): Like the Octave’s redemption scheme for flights? You might like this card (which you can get as either a Visa Signature or an American Express): 20,000 FlexPoints get you a ticket of up to $400 on 150 airlines. In other words, you can get up to 2 cents in value for each point. Even better, you can preserve that elevated value if you go above $400. Thirty thousand FlexPoints get you a ticket worth up to $600, and 40,000 FlexPoints are worth up to $800. Your value might wane if your ticket price falls between thresholds, however.
In addition, the card gives you a $25 airline allowance each time you redeem, good toward baggage fees or in-flight food.

Chase Sapphire Preferred ($95 annual fee, waived first year): If you like the idea of flexible redemption options and extra perks for travelers, this card may fit the bill. The Chase Ultimate Rewards program has a suite of options for redemption, from gift cards, to cash back, to travel. With a 20 percent discount on travel (when you redeem through Ultimate Rewards) and the ability to transfer your points into airline and hotel loyalty programs, you can squeeze a lot of value out of your rewards. Plus, the card gives you primary rental car insurance (most other cards provide secondary coverage, which kicks in only after your regular insurance pays out).

Updated Feb. 5, 2015

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$950-$350 air credits= $600

At 5% back on everything, you’d need to spend just $20k to break even compared to a 2% card. And that’s without any of the 20% discounts on coach airfare. Pretty solid.