Are you looking to do some high-end spending? A premium credit card is usually associated with high-end earners and is often, at times, seen as a status symbol.
Premium credit cards come with a wide variety of perks and exclusive benefits.
However, they require an annual fee to maintain, and you must meet the requirements to be eligible for one.
In this article, you'll learn all about premium credit cards and the difference between premium and regular credit cards, and all the perks that come with a premium card.
What are Premium Credit Cards?
A premium credit card is an exclusive type of credit card, sometimes known as a black or purple credit card. They're typically aimed at people with a higher income who are big spenders.
Premium credit cards work like any other credit card; you use a credit limit to make purchases and pay back the balance each month. However, with a premium credit card, there are high credit limits and annual fees, and you earn rewards points and other exclusive perks.
Most premium credit cards tend to have a minimum annual income requirement, and you'll need an excellent credit score. Requirements will vary depending on the credit card provider.
A Premium Card Example: American Express Preferred Rewards Gold Credit Card
American Express Preferred Rewards Gold Credit Card
Min. Credit Limit
Representative % APR (variable)
74.2% APR
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Earn 20,000 Membership Rewards® points when you spend £3,000 in your first three months of Cardmembership.
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Priority Pass airport lounge access.
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Annual Fee £160 (£0 for the first year).
Representative Example – If you spend £1,200 at a purchase interest rate of 30.0% p.a. (variable) your representative APR will be 74.2% APR (variable). Your APR and credit limit may vary depending on your circumstances.
This premium credit card rewards its members greatly with 20,000 membership reward points when they spend £3,000 in the first three months of card membership. You're rewarded with exclusive perks, points, and other benefits, such as transferring membership points to airline loyalty programmes. This premium card example shows a competitive annual fee, but a high APR rate but it rewards holders handsomely.
How Premium Credit Cards Work
You use a premium credit card like a standard credit card but have a higher credit limit and are rewarded with more perks.
You have to pay an annual fee to keep using your premium card, and there are usually more eligibility requirements than what you'd find with a standard credit card. Rewards are a huge selling point for premium credit cards.
Rewards will differ between credit issuers. The rewards you can expect:
- Welcome bonus.
- Access to exclusive airport lounges.
- Vehicle breakdown cover.
- Personal assistance services when booking dinner reservations and holidays.
- Worldwide family travel insurance and other travel benefits.
- Reward or loyalty points and air miles.
- Advanced tickets for events.
- Shopping vouchers and discounts.
To make a premium credit card worth having, it's best to utilise as many rewards as possible to make the most of it.
The Benefits and Drawbacks of Premium Credit Cards
Some benefits and drawbacks come with most credit cards, especially premium cards.
Benefits
✔️ You can take advantage of a high credit limit. Usually, credit limits are higher on premium cards than regular ones.
✔️ Good value for money if you utilise all the benefits.
✔️ If you're a frequent flyer, a premium credit card is ideal because many perks are travel orientated.
Drawbacks
❌️ Annual fees can be expensive, starting from £200 or more.
❌️ High-interest rates can make paying back the balance more expensive.
❌️ You usually need a high annual salary and an excellent credit score to be accepted.
The Difference Between a Premium and Regular Credit Card
Although premium cards work the same as a standard credit card, some key differences make a premium credit card stand out.
Traditional credit cards run on the MasterCard and Visa payment networks, premium credit cards have these payment networks and additional ones like AMEX.
There are key differences between premium and credit cards:
- Annual fees: standard credit cards usually don't have annual fees.
- Credit limit: credit limits are determined the same way by checking your credit file, but typically premium cards have a higher credit limit than regular credit cards.
- Eligibility requirements: you can get a standard credit card with a good credit score, even a bad credit rating. A premium card requires an excellent credit score and a high salary, starting from £50,000.
- Rewards: standard credit cards usually only offer rewards such as cashback. However, a premium credit card offers more exclusive rewards, airport lounge access, travel insurance, reward points and more.
Alternatives to a Premium Card
If you're unsure if a premium credit card is for you, there are a few alternative options you can look into if you're keen on being rewarded for using your credit card.
Alternative options to premium cards:
- Travel credit cards: if you want a card just for travelling, you can apply for a travel card. You may find they have better rates for spending abroad.
- Cashback credit cards: some credit card issuers offer a cashback reward system; this is ideal for making the most of spending.
- Reward credit cards: you can apply for a rewards credit card; these allow you to earn points whilst shopping, gain air miles, and other rewards you may find handy.
Final Thoughts on Premium Credit Cards
A premium credit card is a great way to be rewarded for spending, and it gives you a high credit limit so you can spend comfortably. All premium cards on the credit card market have their own reward system and requirements. You must pick a card that allows you to make the most of the rewards available.
As well as a high credit card balance, there are other factors you should consider, ensuring you're making the right choice and that the premium card suits your needs the best.
Factors to consider when planning to take out a premium credit card:
- Cost of repayments: before you apply for any exclusive credit cards, ensure you can afford to make the repayments each month.
- Annual fee: annual fees can be hefty but vary between exclusive credit cards, so ensure the rewards are worth the fee.
- Types of benefits: picking a card just because it has many rewards isn't a good idea. You should look to make the most of the rewards and choose the ones you will put to use.
- Doubling up: check that your current credit card doesn't offer the same benefits. A card can become redundant if, for example, you already have travel insurance on one and get another with the same reward.
- Rewards rate: some cards will reward you for spending specific amounts of the balance within a time frame. It's a good idea to pick a card whose reward rate matches your spending habits.
- Terms and conditions: always check terms and conditions if travel perks are involved. For example, if a card issuer offers travel insurance, check what it covers and includes.
So, now that you know all there is to premium credit cards, you can start your high-spending journey and earn rewards simply for shopping.
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