Are all the benefits that come with premium credit cards worth it? Our guide can help you decide if it’s best for you
Having a premium card has long been a powerful status symbol, and it’s no surprise with the extensive benefits cardholders enjoy, from concierge services, to access to exclusive airport lounges.
So if you’re looking for a card with prestige, then a premium credit card could be the way to go.
If you’re looking for a few simple rewards or maybe even some cashback, then look at rewards credit cards and cashback credit cards.
What are the benefits of a premium credit card?
The main selling point of premium cards is the exclusive benefits available to cardholders.
These will vary depending on the card you choose, but may include:
- A high credit limit
- Comprehensive worldwide travel insurance for you and your family
- Breakdown cover or roadside assistance
- Reward or loyalty points, which you can exchange for a wide variety of goods and services, including flights.
- A concierge or personal assistant service, available 24 hours a day to help you arrange almost anything.
- Access to exclusive airport lounges worldwide.
For some people, particularly those who travel frequently, these benefits can be very appealing – saving time and making life a little easier and more comfortable.
Disadvantages to premium credit cards
The added extras and personalised service that you get with a premium credit card doesn’t come for free – with most premium cards you pay an annual fee, usually of around £250-300, although this varies.
The APR on premium credit cards can also look very high – often around the 50% mark.
This is because the annual fee has to be shown as part of the APR under Consumer Credit Act regulations.
So if the standard APR for purchases was 16.8%, for example, and the card had a £250 annual fee, the APR would have to be shown as 51.8% taking the fee into consideration.
Things to consider when choosing a premium card
Some of the very high-end premium credit cards are available on an invitation only basis, while others specify a minimum income that cardholders must meet.
Most premium credit cards will insist on a strong credit history, so it could be worth checking your credit report before you apply.
Some premium cards are actually charge cards. These differ from credit cards, in that they allow you to spend interest-free credit, but you must pay your balance in full every month.
However, they do not allow you to borrow money in the same way as a credit card.
It is also worth considering how valuable the benefits that come with a premium credit card will be to you personally before you sign-up and start paying the annual fee.
Premium cards can be great value for money if the benefits are relevant to you and you will make the most of them, otherwise, a standard credit card may be a more economical option.