This week I explore the concept behind a new wellness-focused credit card called Ness, including the way it plans to capitalize on growing wellness expenditures. Scroll down to use Glossy+ Comments, allowing the Glossy+ community to join discussions around industry topics.
As the wellness industry creeps into almost every facet of life and lifestyle, a new wellness-focused charge card aims to capture some of those related consumer expenditures.
The card, called Ness, is a points-for-rewards-based card. It offers six points for every dollar spent on a health or wellness item and two points on every other type of purchase. Charging an annual fee of $399, Ness offers approximately $1,700 worth of annual perks and credits including a $250 “healthy credit” to spend at various health and wellness merchants, plus $100 to use at HigherDose and $180 for Glamsquad. Ness soft-launched approximately a year ago and will remain invite-only for friends and family until its public launch later this month. At that time, anyone will be able to apply for the card.
“We believe that health and wellness, not travel, is now the No. 1 lifestyle identity,” said Derek Flanzraich, founder and CEO of Ness. “So, why use a travel credit card?”
Before Ness, Flanzraich founded the wellness-focused media company Greatist in 2011. It was acquired by Healthline in 2019 for an undisclosed amount. As a child, Flanzraich struggled with weight and health issues and felt the culture of the time did not empower people to meet individual health and wellness goals. With Ness, he’s hoping that wellness becomes more accessible and helps support a personal positive flywheel effect of taking care of oneself.
“No matter how friendly and accessible you make health and wellness, it’s expensive as hell for most people,” he said. “Ness has a very big vision: To build like the next great consumer credit card company.”
The credit card landscape has long been dominated by travel rewards cards like Delta’s tie-in with Amex, as well as Chase Sapphire and Capital One Venture Rewards. Try Googling “best rewards travel cards” to see more than 180 million results. And an entire ecosystem has developed around credit cards and travel, including dedicated publications, credit card-specific airport lounges, and perks like reimbursements on TSA Pre-Check. Essentially, Ness is David up against the Goliath of travel-based credit cards. According to Accenture, despite 66% of global consumers feeling financially squeezed, 80% said they plan to maintain or increase spending on health and fitness, both products and services, in 2023.
And Americans love credit cards. According to consumer debt data from the Federal Reserve Bank of New York, Americans have $986 billion in credit card debt, as of the fourth quarter of 2022. That’s the highest total since the New York Fed began tracking this data in 1999. According to LendingTree, the national average debt for an individual cardholder is $7,279. It’s important to distinguish that Ness is not a credit card but rather a charge card, meaning that the full balance must be paid off every month to avoid a $39 penalty fee. However, users are not subjected to interest. The American Express Centurion Card, known as the “Black” card, is another notable charge card. The Ness Card is issued by The Bank of Missouri under a license from Mastercard and serviced by Ness Well Financial, LLC.
“We’re out to build a long-term relationship with people tied to their health. That is not easy to do,” said Flanzraich. “We’re not reinventing the wheel regarding a consumer credit card — our card works like other cards. The difference is why you are using it, how it makes you feel when you use it, and what actions it drives you to take.”
Sara Rathner, a senior writer for Nerdwallet, said there has been an increase in specialized cards like Ness in recent years as fintech companies try out new concepts via a waitlist to see if there is customer traction. Not all succeed, however. Another wellness-based credit card, called Paceline, offered 2.5% cash back for wellness purchases. It connected to the Apple watch to keep track of users’ fitness, and users were incentivized to stay active to double their cash-back rewards. It launched via a waitlist in March 2022 but never debuted to the broader public and was officially removed from the market in February.
“Sometimes these cards are part of a trend, and if the trend dies down, then the value proposition of the card kind of follows,” said Rathner. “Other times, it’s not that the company is capitalizing on any particular trend; the card just does not resonate with consumers.”
Because Ness is catering to and targeting wellness-obsessed millennials and Gen Zers, it also butts up against the existing popularity of debit-based buy-now, pay-later services like Afterpay and Klarna. In the wake of the 2008 financial crisis and legislation like the 2009 CARD Act that provided more consumer protections, younger people started to rely more on debit than credit. But BNPL services, while still popular, have faced several troubles, including a decline in stock or share value, lawsuits, layoffs, and massive debt. Flanzraich said the Ness team feels the charge-card element may be more attractive to some people, especially since the business model is not based on encouraging debt and charging interest. While not a strategic choice to differentiate Ness, Flanzraich said he’ll be pleased if it proves an advantage.
He declined to share how many people are currently using the card or have joined the waitlist. However, get shared some of the spending behavior patterns of cardholders: The most accessed benefits include the $80 quarterly statement credit for Jones Road Beauty and the $200 annual statement credit toward Exhale Spa. The most redeemed rewards include $40 for a Canopy air-care purchase and $50 for an Aesop purchase. The most-viewed rewards have been a $1,000 shopping spree at Erewhon, a full-body CAT scan from Prenuvo health company and a $500 credit for a self-care day in NYC.
Ness focuses its rewards on companies that will prove popular among its cardholders. However, not all of the featured brands are official partners or endorsers of Ness. Exhale Spa and Jones Road Beauty are official partners, and offer varying discounts in exchange for the card driving more consumers to their brands. Flanzraich said Ness will announce additional corporate partnerships and a celebrity ambassador soon.
The first generation of Ness comes with a $399 annual fee, on par with established cards like Capital One Venture X Rewards, at $395, and American Airlines’ Citi AAdvantage Executive World Elite Mastercard, at $450. Flanzraich concedes that such a high fee is the opposite of making wellness accessible. He referred to the Ness card as the “Tesla Roadster,” the electric vehicle company’s first car model because it’s a premium product in a new space that is out to prove the concept works and is desirable.
According to LendingTree, 24% of Americans possessed at least one credit card they did not use as of the second quarter of 2022. Flanzraich said that, from a business perspective, focusing on more affluent consumers who can manage the $399 annual fee and who actively spend on health and wellness is necessary. The long-term vision is to offer other versions of Ness, with lower or no annual fees, with the first planned for 2024.
Because of the expansive definition of “wellness,” it can be hard to accurately determine how much people spend on average. A survey of 1,400 people from the beauty industry publication StyleSeat found that Americans spend an average of $110 a month on beauty, fitness and wellness. Meanwhile, McKinsey research estimates that Americans spend more than $450 billion on wellness products and services every year, growing by more than 5% annually.
“The card can be lucrative, but only for those who spend several hundreds of dollars monthly on wellness products or services,” said Jill Gonzalez, a credit card analyst at WalletHub. “As a general rule, the more focused a card is on a specific market segment, the more difficult it is for users to reap its rewards. Overall, the Ness card is very expensive, and unless your purchases are focused solely on health and wellness, you might be better off with a regular rewards credit card.”
In the lead-up to its public debut, Ness has built an online publication called “The Nessie,” in the guise of Wirecutter for wellness, to capture SEO and drive traffic. It also has a wellness newsletter called “Sightings” published via email twice a week. Official brand partners also plan to share the launch news with their customers. And of course, Ness will work with influencers to show the card in action.
“[Credit and charge cards] are a highly personal decision, and you want to think about the cost of the card compared to the value of the rewards you receive,” said Rathner. “And you should recognize that just because a card sounds cool or trendy, that doesn’t necessarily match your spending style.”
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