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.
With the COVID-19 crisis, many of the perks associated with travel and concierge services may be less relevant to you now. So if you already have a premium credit card and are thinking of looking for another, or you're considering taking out a new premium credit card, then it pays to shop around and look at the benefits and costs.
By using the Uswitch premium credit card comparison service you can judge whether the benefits are worth paying for, or whether you would be better off with a different kind of reward card or one that gives perks that are more relevant to you.
Premium credit cards have different names, and are sometimes referred to as black credit cards or platinum cards. The principle is the same, and that is that they charge a fee each year in return for perks. Some of these perks aren't generally available, such as a personal concierge service, which is on call 24/7 anywhere in the world.
As some of these ultra-premium cards are only available to people who earn a lot of money, they're seen as a symbol of wealth and status. Whether they're actually worth the money depends on what you want to use your premium credit card for – many premium card holders use them for their perks or the kudos.
The main selling point of premium cards is the exclusive benefits available to cardholders.
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.
However, with business travel drastically reduced, more people working from home, and fewer people travelling for business or leisure, some of these perks may be less appealing than they used to be. You will need to weigh up the annual cost of the card with the amount of use you will get out of the benefits that are attached to it.
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 and can be as high as £500, or more.
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.
If you don't pay your card off in full each month, you may be better looking for an alternative card with lower or zero interest rates.
What should I consider when choosing a premium credit 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's also worth considering how valuable the benefits that come with a premium credit card will be, 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.
If you're interested in perks and rewards you could look at the options available from a Reward Credit card, which gives your benefits in return for spending and loyalty.
A premium credit card isn't really suitable for you if you don't pay the balance off in full every month – you might be better with a card that charges a lower rate of interest on outstanding balances instead.
What is a platinum credit card?
The most exclusive credit cards may have different names – a black credit card or a platinum credit card. It's the company’s name for its most exclusive cards.
Some are only available to people earning more than £50,000 and who are prepared to pay anything from £100 to more than £500 a year for their premium credit card.
However, it can be a bit confusing because not all platinum cards have fees and the names for elite cards depends on the credit card company. For example, Amazon has a Platinum Mastercard that gives reward points on spending, but does not have an annual fee.
The most prestigious credit cards may not have credit limits. In fact for elite and premier credit cards the credit limit will be based on your personal financial circumstances and your credit score, rather than any preset threshold. When looking at which credit card gives the highest credit limit it depends on the person applying for the card.
At the very top end, credit card companies don't publish details on the criteria for being invited to apply for their ultra-premium credit cards. The premium credit card with the highest credit card limit is reportedly the American Express Centurion Card.
It's available only to big spenders and millionaires and is known as the Amex Black Card. It doesn't officially have an upper spending limit for purchases.
The best premium credit card is the one that fits your lifestyle the best. If you have a premium card and regularly use the concierge service and travel perks, then the annual cost may be more than worth the benefits.
However, if you're only considering an elite credit card because of the prestige that it brings, you may be paying a fee for benefits and perks that you barely use.