Premium credit cards are the same as any other card type in terms of how they work. You get a certain amount of credit, and you need to pay a fixed portion of it back every month for a specified period while also paying for all the cardholder fees. Regardless of the issuer, these cards come with the following basic features: high credit limit, hefty annual fees (not always), steep interest rates, and attractive perks and rewards. Depending on the issuer, these cards’ special features can differ somewhat, but they typically come down to the same perks, mainly travel-related. Some of the perks you can get with a premium card include:
- Concierge or personal assistant services for travel bookings or personal shopping
- Access to exclusive airport lounges
- Discounts at airport lounges and on travel purchases (flights, hotels, airport transfers, etc.)
- Discounts at selected high-end merchants
- Rewards on travel purchases, such as air miles
- Rewards or ride-hailing services
- Free checked baggage
- Checked baggage insurance
- Insurance for delayed and cancelled flights
- Worldwide travel insurance
- Rental car insurance
- Roadside assistance for vehicle breakdowns
- Home emergency cover
What Are Premium Card Advantages?
By now, you must have realized that there are plenty of benefits to using a premium card, as long as you can afford one and use it responsibly. Let’s explore the most essential advantages.
High Credit Limits
This card type offers a massive credit limit, which is precisely why it is seen as a status symbol. Minimum and maximum credit limits vary from one issuer to the next, but they’re very flexible. You can borrow several or even hundreds of thousands of dollars. That can come in handy if you regularly purchase various expensive and luxury items that you may not be able to buy with a standard credit card.
Excellent Value for Money
These cards may come with huge fees, but they can save you a lot of money in the long run. That’s because you can get excellent discounts on purchases that would cost you much more with any basic credit card. You can also collect enticing rewards, without which you would need to spend much more on various purchases and services. You can get great value for money if you regularly use all the features and perks.
Perfect for Frequent Travellers
If you’re a frequent traveler and a big spender, applying for this card type can be a great decision. That’s because almost all your perks are designed for travel-related purchases. Exclusive access to airport lounges where you can get food and beverages for free, discounted flights and hotel stays, and travel insurance worldwide are only some of the fantastic travel perks you can enjoy.
Concierge Service
One of the best perks is having your concierge to arrange all your travel bookings. They’re usually available 24/7 and can book flights, airport transfers, hotel accommodations, high-end restaurants, theatre tickets, and more. They can even buy gifts for your loved ones, send flowers, and assist with personal shopping.
What Are the Disadvantages?
Not every credit card is perfect, and the premium type is not an exception. For many people, the following disadvantages might be an instant deal-breaker. However, you may consider them a small price to pay for all the benefits you would receive.
Hefty Annual Fees
Every card in this exclusive category comes with high annual fees. They vary from issuer to issuer but go as high as several hundred dollars for Platinum cards. That’s a steep price tag, but remember, you’re getting all those exclusive perks. You also get a very high credit limit, so the amount you have to pay annually as a premium cardholder shouldn’t come as much of a surprise.
High-Interest Rates
Given that you can get a massive credit line, interest rates can get pretty high, too. Carrying a premium credit card can quickly become incredibly expensive if you can’t afford to clear your balance every month. You could get into massive debt, hurting your credit score and financial future. The value you get from all the rewards wouldn’t be nearly as high as the steep interest.
Available Only to Wealthy Consumers with Good-to-Excellent Credit
A high annual income is one of the criteria for being eligible for this card type. The other is an excellent credit score. If you don’t meet those criteria, you simply can’t get approved.
Should You Use a Premium Credit Card?
This card type is designed for people who regularly spend money on luxurious or expensive items. These cards might be a good choice if you’re a big spender with a high credit limit. Most benefits are travel perks and reward points that can save you much money in the long run. However, you must be a frequent traveler and use those perks to earn enough value. Otherwise, borrowing all the money could get quite expensive. The annual fees and interest rates are steep and can diminish your earned rewards if you’re not a responsible cardholder. If you’re sure that you can afford it, use it regularly, and meet the application requirements, then this card type may be a good fit for your lifestyle.
Bottom Line
Premium credit cards can be fantastic for anyone who leads an expensive lifestyle and travels often. Due to high interest rates and annual fees, they’re costly to hold, but they come with good perks that offer great value for money. Before making any commitments, think carefully about your spending and make the necessary calculations. If you decide to apply, compare different issuers to find the fit for your needs.