Premium credit cards
Premium Credit Cards
Premium credit cards are the crème of the crop in the world of credit cards. These high end cards fit well in the wallets of those who live a lavish lifestyle, enjoy fine dining, fly business class, snap up front row VIP seats to concerts and in general just love to spend up big! The rewards of premium credit cards easily outweigh the costs associated with the cards. If you’re already a premium credit cardholder or are considering being a proud owner of one of these prestigious cards now it’s time to sit back, relax, sip on a glass of veuve and soak up all the benefits of these fancy pieces of plastic!
Types of Premium Credit Cards
In recent years there has still been a demand for premium credit cards from Australian consumers despite the global financial crisis. Back in the day, a gold credit card was considered pretty flash, now at this high end of town, there are several types of premium credit cards to choose from. They all work in pretty much the same way, giving you credit and exclusive benefits and supreme rewards but it’s the level of service that can vary from one card to another.
Gold – This is the starting point of premium credit cards, ideal for people looking for more than just a basic credit card. Gold cards offer less benefits compared to the higher ranked premium cards.
Platinum –Platinum rewards cards have more features and benefits compared to gold cards. One stand out benefit, is you can have two cards linked to the one account so you can maximise your points earnings. For example, you can have an American Express and Mastercard or Visa card.
Black – These cards come with all the supreme benefits and features you could dream of. From personalised concierge service to unlimited VIP lounge access, you can even earn up to 5 points for every dollar spent when travelling. All these luxuries come at a cost in the form of a very high annual fee! Learn more from our detailed guide on black credit cards.
Diamond – Now we move to the top of the lot, to diamond credit cards! These cards have a higher minimum credit limit, you can earn more reward points for every dollar spent and let’s just say you can redeem them for just about anything you like!
Who are premium credit cards good for?
These cards are definitely not for everyone! Premium credit cards are targeted towards high income earners and big spenders. They’re ideal for people that are going to use their card regularly and on expensive items. These cards are also suited to frequent travellers and those who like to soak up all the rewards and benefits that come with these fancy cards.
A premium credit card is NOT ideal for someone who is unlikely to pay their closing balance on time and in full. The interest rates as well as the late payment fee will bite you in the face and all benefits to the card will seem like a waste. It’s important to set up an automatic payment plan to help avoid high interest charges and credit card fees.
Criteria when applying for a premium credit card
The criteria will vary slightly from one card provider to another. Generally speaking though, you need to tick the following to have your application for a premium credit card approved:
1. You must be over 18 years
2. Be a permanent Australian resident or an Australian citizen
3. Have a perfect or near perfect credit rating
4. Have a minimum annual salary of around $50,000
If you’re considering getting your hands on a nifty piece of plastic read our guide on applying for credit cards.
Advantages of being a premium credit cardholder
The extent of your benefits and perks will depend on which type of premium card you have and the lender. So it’s important to check with your card provider on what you can and can’t lap up. Most premium credit cardholders can enjoy these benefits:
- Complimentary insurance
- Concierge service
- Higher credit limits compared to a basic credit card
- Reward point promotions that can double or triple your point earning
- Purchase protection and protection from fraud
- There’s usually no cap on the amount of reward points you can earn
- Your points are unlikely to expire
- Wider range of choices to redeem your points on
- Access to exclusive deals on travel and dining
Premium Credit Card Fees
As you’ve read above, the benefits of being a premium credit cardholder are pretty darn good! Now we hate to put a dampener on things but we also need to inform you of the fees and charges of premium cards and warning some may come as a shock!
Interest Rates: Compared to standard cards, premium credit cards have a much higher interest rate. Some lenders can charge up to 19-22%. Use the Mozo Rewards Revealer tool to find a card with a competitive interest rate.
Annual Fee: You ready for this…a premium credit card can cost you as much as $450 a year! That’s right, the annual fee for these cards is sky high so make sure you choose a card where the annual fee doesn’t cost you more than what you’ll receive in rewards value.
Foreign Exchange Fee: Heading overseas or making purchases online from an international store? If so, beware your provider will charge you around 3% of the Australian dollar amount on all purchases made for converting your pennies.
Cash Advance Fee: As tempting as it may be, try and avoid using your premium credit card to withdraw money from an ATM. If you do, you’ll be hit with a cash advance fee which is around 3% on the amount you take out plus you will be charged interest on that money immediately which can be up to 20%. Read Mozo’s guide on avoiding credit card fees.
Late Payment Fee: When your credit card bill comes in do everything you can to pay it on time. Fail to pay at least the minimum amount owing by the due date and your provider will hit you with a late payment fee of around $30. Dodge this fee by setting up a direct debit or automatic transfer.
Comparing premium credit cards
If you’re in the market for a premium credit card you may be dreading the time it will take you to compare and research card options. So to make this process a little easier and less painful, Mozo has designed the Rewards Revealer Tool. Simply plug in your annual spend and click on the rewards you are interest in and you’ll find the best card for your situation.