If you enjoy the finer things in life, a credit card with premium features might be for you.
The premise behind platinum credit cards is simple: they’re packed out with features and rewards but offer an annual fee and interest rates to match. They are made for big spenders who use their card regularly, and for whom the extra charges pale in comparison to the rewards offered.
What are premium credit cards in Hong Kong?
Premium credit cards are all fairly similar in functionality, with varying levels of service and reward programmes offered depending on the kind of platinum card you are signed up for. Big spenders are an attractive market for credit card providers, who often want to cross-sell them premier banking and investment services.
Premium credit cards are targeted at higher earners; people with a flashy lifestyle whose frequent use of credit card services warrants rewards from banks and financial institutions.
In exchange for outstanding rewards and services, cardholders pay an elevated annual fee. They will also have to meet a higher annual income requirement in order to qualify for one of the cards.
How do higher end credit cards work?
The use and management of these premium cards implies a lifestyle that has a high cash flow. The standard feature of a premium credit card is a points program which rewards the cardholder for every dollar spent. With some cards you can even pay for an item upfront and then tell the bank to use your points to pay for it instead.
Other tempting features include access to premier lounges at airports, membership to private clubs, concierge services and discounts on shopping and dining. Due to the increased annual fees, these cards are suitable for and targeted to shoppers for whom the rewards of the card outweigh the cost.
What are the types of premium credit cards?
- Gold cards – Gold credit cards mostly offer better reward programmes than standard credit cards, as well as shopping, dining and entertainment discounts, and added perks such as emergency assistance.
- Platinum cards – These cards, also called elite or prestige cards, offer a higher level of benefits compared with gold cards, including better reward programmes, a concierge service for travel and restaurant reservations, free travel insurance, access to airport lounges and complimentary nights in hotels.
- Invitation-only cards – Invitation-only cards are the crème de la crème of credit cards, offering concierge services, complimentary private club membership, the highest level of rewards programmes and often no credit limit. Of course, the annual fee tends to match this level of features and can be a five-figure sum.
How to compare these types of credit cards
Complimentary travel insurance comes as a feature of some premium cards. If you are a frequent traveller or are considering a holiday, you may be able to benefit from this feature. Levels of cover differ from card to card and as a general rule, the more premium your credit card, the more comprehensive your insurance will be.
- Assistance and concierge services
These kinds of features fit well with the image of luxury and the lifestyle these cards project. The exact nature of these services is up to the individual policies of the providers, but they may include help with travel arrangements, restaurant bookings and online purchases.
Depending on the card you use, premium credit cards use a points program to reward you when you spend money, either through access to a frequent flyer program or with the bank’s own rewards services. Again, the more premium your card, the more rewards you will receive, and for many of these cards, the rewards points you earn never expire.
- Travel services
Premium credit cards tend to offer significant benefits to frequent travellers. These include the chance to accrue air miles at a faster rate than normal, complementary nights in hotels, free access to airport lounges and limousine services and a travel concierge.
Pros and cons
- A higher earn rate. You can expect to benefit every time you spend. If you are likely to enjoy benefits from access to services such as a frequent flyer program, the rewards you enjoy could outweigh the costs.
- Features. Premium cards have many additional features and benefits. If you are time-poor, perhaps having a concierge to organise tickets for you would be a useful advantage. On the other hand, maybe having a free limousine to the airport would be the thing that makes a premium card worth it for you.
- Insurance coverage. These cards offer more comprehensive insurance coverage compared with other cards, which can be especially beneficial if you are a frequent traveller.
- High annual fee. Premium credit cards have much higher annual fees than regular credit cards, although providers may waive these if, for example, you spend a certain amount on your card each year.
- You may not qualify for one. Premium credit cards generally have higher minimum salary requirements than standard cards. Some of the very highest-level cards are also available by invitation only.
Things to avoid about premium credit cards in Hong Kong
Due to the high interest rates charged on credit cards, to get the most from these cards it’s a good practice to pay them off in full each month. If you are someone unlikely to do this, spending on a premium card is likely to be more expensive in the long-run, despite the benefits you may get.