Premium credit cards have become more popular in recent years and people sometimes use them as some sort of status symbol. Many premium cards are made of metal and look more expensive these days – but are they worth the money it costs to get one? In this article, we dive into the pros and cons of premium cards.
What is a Premium Credit Card?
Premium credit cards (also known as ‘black,’ ‘platinum,’ or ‘obsidian’ credit cards) are credit cards that offer exclusive benefits and memberships to cardholders in exchange for an annual fee. They are typically only offered to people with a good credit score, earning a high salary who are known to be big spenders and can afford the associated costs. The basic principle for premium credit cards is the same: you borrow by spending on the card and then repay the card company back over time. However, premium credit cards are marketed as ‘worth it’ if you can afford them due to the extra benefits they offer.
In fact, these cards are typically not heavily advertised like other high street credit cards because the amount of people earning the necessary income for approval is smaller. The truth is that most high street banks or card providers do have a premium offering.
What Perks Do Premium Credit Cards Give You?
Premium credit cards can give you numerous perks but here are some common ones offered on high end premium credit cards:
- Global travel insurance that covers the whole family (if tickets are booked on the card)
- Exclusive access to some airport lounges worldwide
- Rewards and points for spending, often in the form of airline miles
- Private concierge or personal assistant services that can be used to book restaurant reservations, holiday travel plans, or shopping for gifts or personal purchases
- Rental car breakdown or damage insurance coverage (if the rental car is booked on the card)
- Exclusive presale ticket access to events
- Special discounts curated to your spending habits extended through partnerships with other companies
There are a few other advantages of premium credit cards: higher limits for bigger purchases and good value for the money spent if you make a point to use all of the benefits.
The perks offered by most premium credit cards vary extensively so it’s best to check with the individual offering to see what perks are available.
What is the Catch for Premium Credit Cards?
You may be wondering, what is the catch for premium credit cards? The answer: they’re expensive and have restrictions on who can gain approval. Here is a list of common drawbacks for premium credit cards:
- High annual fee – typically over £200 per year
- High interest rates – if you cannot pay your balance off each month it is best to avoid premium cards
- Risk of paying double for some benefits
- Risk of not not using the benefits that you are paying for via annual fees
- High annual salary and excellent credit score required for approval
The truth is, most premium cards are designed for high income people who frequently travel. If you do not fit these categories, it may be better to opt for a different type of card that provides benefits where you need them.
What Are the Best Alternatives to Premium Credit Cards?
We’ve got you covered with our comprehensive credit card guides!
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