Should you get a premium credit card?
Premium credit cards come with a host of luxurious benefits but charge a costly fee. Read on to find out if this could be the right credit card for you
Key takeaways
Premium cards often come with significant annual fees, unlike many regular credit cards
Premium cards offer exclusive benefits such as concierge services, airport lounge access, and comprehensive travel insurance, which standard cards lack
Premium cards tend to be more suitable for high earners with excellent credit histories
What is a premium credit card?
Premium credit cards operate just like any standard credit card, allowing you to make purchases up to a set credit limit and requiring monthly repayments.
The difference lies in the range of high-end perks that accompany them. These cards are typically associated with high earners and come with an annual fee, which can be quite hefty.
Yet, despite their elite status, they might be more accessible than you think.
What’s the difference between a premium and regular credit card?
When comparing premium credit cards to standard cards, several key differences become apparent:
Annual fees: Premium cards often come with significant annual fees, whereas many regular credit cards do not.
Perks: The benefits of premium cards can include concierge services, airport lounge access, and comprehensive travel insurance, which are not usually found with standard cards
Credit limits: Premium cards tend to offer higher credit limits, but will depend on your personal financial situation
Exclusivity: Some premium cards are available by invitation only, adding to their allure
Who offers premium credit cards?
Several companies are known for their premium credit card offerings. For example, American Express is renowned for its extensive perks, including airport lounge access and comprehensive travel insurance.
NatWest provides a premium credit card with travel-related benefits and cashback with selected retailers. Royal Bank of Scotland’s Reward Black card offers 1% cashback on supermarket spending and refunds the annual fee if you have a Reward Black current account.
It's quick and easy to see if you get a premium card card when you use our one-stop credit-card eligibility checker.
What are the advantages and disadvantages of premium cards?
Like any financial product, premium credit cards have their advantages and disadvantages:
Advantages
Luxurious perks: From concierge services to airport lounge access, the benefits are designed to make life more comfortable and convenient
Credit score improvement: A higher credit limit, if managed well, can positively impact your credit score
Insurance benefits: Many premium cards offer insurance on rental cars, tickets, and flights booked with the card, providing peace of mind
Disadvantages
Annual fees: These can start from £100 and go much higher, adding to your yearly expenses
High interest rates: Premium cards can be very costly if not managed right. They have high APRs, and failing to pay off your balance in full could lead to unmanageable debt
Temptation to overspend: The high credit limit may encourage spending beyond your means, which can negatively affect your credit score and financial stability
Can I get a premium credit card with bad credit?
You’re unlikely to be approved for a premium credit card if you have bad credit because these cards are targeted towards high earners with excellent credit histories.
They are not suited for those with past borrowing issues and a rejected application could further damage your credit score. However, there are credit builder credit cards specifically designed for customers with poor credit ratings. These tend to have lower credit limits and higher interest rates, but can be effective in boosting your credit score if you manage your spending and repayments responsibly.
Our eligibility checker will help show you which cards you’re most likely to be approved for.
Is a premium credit card suitable for me?
To determine if a premium credit card is right for you, consider your financial habits and needs. If you earn over £50,000, can pay off the balance each month, and will make use of the benefits such as concierge services, a premium card could be a valuable asset.
Similarly, if you have a high monthly spend, the cashback and rewards points could make having a premium credit card worthwhile despite a high annual fee.
Another angle where a premium credit card might be suitable is if you already have a packaged or premium current account with a specific bank. In this case, you might find the annual fee for the linked premium credit card is waived.
What are the alternatives to a premium credit card?
If a premium credit card doesn't seem like the right fit, there are alternatives worth considering that don’t charge an annual fee:
A cashback credit card rewards you with a percentage of your purchases, provided you meet the provider’s criteria
With a points card, you earn loyalty points for spending
A travel credit card is ideal for frequent travellers, offering features like no foreign transaction fees
Air miles cards let you earn points towards future travel
Packaged bank accounts offer similar perks such as insurance and breakdown cover, but you’ll be charged a monthly fee
Personal Finance & Insurance Expert
Our expert says
“A premium credit card can be an enticing prospect. Not only do they look cool and come with a fancy name, they offer eye-catching perks. But they are only worth it if you’re going to make use of the rewards.
"Otherwise you face a high annual fee, with a card that will hit you with a punishing interest rate if you don’t meet your repayments in full each month.”
Other useful guides
For more information on credit cards, MoneySuperMarket offers various guides, including:
Finding the right card with MoneySuperMarket
MoneySuperMarket simplifies the process of finding the right credit card by allowing you to search a range of providers based on your personal details and preferences. Comparing cards involves a soft search, which does not affect your credit score.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead, we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.
Author
Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
Reviewer
Jonathan Leggett
Former Senior Content Editor
With over 15 years of experience in online content and journalism, Jonathan is a former MoneySuperMarket’s editor at large and works across our Broadband, Mobiles, Energy and Money channels. Along...
