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Premium credit cards

Premium credit cards

Premium cards are only offered to high earners with strong credit scores, and can be seen as a status symbol. They also tend to come with great reward schemes. If you think you may be eligible, find out more about some of the advantages and what to watch out for.

Anelda Knoesen
From the Money team
minute read
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Posted 13 JANUARY 2020

What is a premium credit card?

A premium card is similar to a standard credit card but it comes with an annual fee, in return for some great perks and benefits. Often referred to as black or purple credit cards, they tend to be reserved for big spenders with high incomes.

What are the benefits of a premium card?

The main benefits of having a premium credit card is the rewards they offer. These include:

  • Travel benefits: these can include access to exclusive airport lounges, worldwide travel insurance and other concierge services that  provide services like booking travel and accommodation. Your premium package may also include air miles that you can build up with each purchase and use for free or discounted flights.
  • Lifestyle benefits: they can have generous rewards schemes that give you points for shopping at particular retailers. Other benefits can include breakdown cover and home emergency cover.

Who can get a premium card?

Premium cards are only usually offered to those with a high credit rating. To be eligible you’ll need to be earning between £40,000-50,000 or more, although it will vary between providers. However, even if you qualify for a premium card, unless you can afford to use it regularly to benefit from the perks, a cashback card or use abroad card might be a better option for you.

How much do premium cards cost?

Premium credit cards all come with an annual fee, which will vary depending on the card and benefits package you have. Annual fees can vary from £100 to as much as £700, so it’s important to make sure you’re making full use of the benefits.

APR rates are often very high for premium credit cards but this is because it takes into consideration the fees you pay. For example, the actual interest rate for your repayments could be around 15-20%, but the APR shown could be 50% as it includes the annual charge you pay for the card.

What do I need to watch out for?

There’s rarely a 0% introductory period with a premium card and APR rates can be very high. So if you’re not someone that pays off their balance in full every month then a premium card might not be for you.

Premium credit cards often come with high credit limits so you should be careful as it can become harder to make your minimum repayments when you borrow more.

Take into consideration how regularly you’ll use the perks available for a premium card. You may be able to find some of the perks, such as travel insurance, cheaper elsewhere. Or, you may already have them.

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