The flames of April’s Fyre Festival have begun to die down, but the reputation of the failed fest’s co-founder was singed years before by an elite card that wasn’t what it seemed.
Though some stories in 2014 about Billy McFarland’s Magnises card called it a credit card, it was more of a lifestyle brand aimed at monied millennials looking for a good time. The card, like the festival, didn’t deliver.
And what does this have to do with banking and credit cards? The lesson of the Fyre Festival fiasco and the Magnises missteps is: Don’t trust just anyone with your money.
At the Fyre Festival, a luxury version of Coachella, ticket buyers received none of the advertised splendor of first-class accommodations on a Bahamian island. Instead, they found themselves left hungry and abandoned at the airport. Now the Fyre Festival lawsuits are flying.
If only Fyre Festival-goers had heard of the Magnises card, maybe they would have avoided the whole mess.
The Magnises card was pitched by McFarland and a bevy of beautiful young people. In the beginning, Magnises kinda sorta resembled the AmEx Black Card, though the Magnises card’s terms and reviews for the card were overwhelmingly awful.
Instead of requiring a high income and an excellent credit rating (as would be needed to obtain a genuine elite credit card offered by a responsible financial institution), all you need to own the Magnises is $250, paid annually. In exchange, the company promised the Magnises would open doors to exclusive experiences, such as VIP entry into parties and discounts at concerts and sporting events.
OK, so what if people want to drop their cash on such a card like that? It’s their business, and if it pays for a cool soiree, everyone’s happy. But reviews for Magnises are far from magnificent because cardholders did not get what they paid for.
Just a few Magnises reviews from Yelp:
“Buyer beware. The complaints are real… lots of same experiences where they promise you a ticket, cancel last minute then have issues refunding your money.”
“I implore you to avoid doing business with this company on any level and am completely embarrassed to have been swindled by this myself.”
“This company is a total scam. It is a miracle how they are still in business – it is only a matter of time before someone presses criminal charges against the owner of this company.“
Therefore, before signing up for any hot new card – credit, debit or prepaid – heed these three warnings and tips:
1. Don’t be influenced by influencers.
McFarland and Co. hired celebrities and models to promote the Fyre Festival and to pepper the Magnises’ ads and website with beautiful people. Remember, though, they’re getting paid to play. Be skeptical when you see social media posts gushing about how glorious a piece of plastic is. The Federal Trade Commission is now cracking down on unethical influencers.
2. Don’t rush in till the bugs are worked out.
The RushCard, developed by hip-hop entrepreneur Russell Simmons, helped people with low incomes because the prepaid card’s fees were relatively low. Unfortunately, some serious systems errors made it impossible for tens of thousands to access their funds for weeks in 2015. Earlier this year the Consumer Financial Protection Bureau levied $13 million in penalties for the RushCard outage, and rival prepaid card company Green Dot announced it had agreed to acquire UniRush.
3. Weigh the benefits against the costs.
When you get more than your credit card’s annual fees in rewards and perks, that fee is fine. Get a lot more back from your card and you come out way ahead. But less is never acceptable. Carefully read over your credit card’s – or prepaid card or debit card – terms and apply for a product only when it makes sound financial and lifestyle sense for you.
Finally, remember that class can’t be bought. If you desire elite status, get it the old-fashioned way. Earn it. It takes time and effort to create a credit history that translates into a high credit score. A perfect credit score is even possible. With a score in the upper echelons, you can qualify for an array of premium credit cards that reward you for having excellent credit.