Premium Credit Cards: Are They Worth Having?

The minimum income requirement for gold credit cards is usually set at between $35,000 and $48,000 per annum. However, if you have a good credit track record with your bank, it might offer you an upgrade from your classic card without such proof of income.

On the downside, its annual fee might be double that of your classic card. So, should you pay the extra amount? What are the benefits involved?

Based on a survey of gold credit cards in the market, color aside, gold cards are not very different from their classic or silver counterparts. The primary difference is in terms of the insurance coverage that you are given; you could get two or three times the coverage for flight, travel accident and purchase protection policies. Other advertised benefits include road-assist services like emergency towing.

Many of the extra benefits attached to gold cards are travel-related. Commission-free travelers' checks are quite popular, as are emergency assistance services, such as medical and legal aid, while traveling abroad. MasterCard gold cardholders, for instance, have additional access to MasterAssist Travel Assistance Services while Visa gold cardholders enjoy worldwide Visa Emergency Travel Assistance. Ask yourself; how much more are you going to be paying in terms of annual fee; and will you use the extra benefits? Do you travel often?

You should also analyze your spending pattern. Some reward programs offer gifts that are exclusive to gold or platinum cardholders. However, the points required to redeem these rewards tend to start from six figures.

So, if you don't use your credit card that much, you would not be able to obtain these gifts. Of course, if the gold card is free (many banks now offer fee waivers) and waved enticingly in front of you, the extra benefits don't hurt.

If you don't want to be bothered with redeeming stuff from a catalogue and prefer plain old cash, look for a high cash-back rate with lots of flexibility and few terms attached. Don't be tricked by the ads that say 'up to 2% or 3% cash-back'; the key phrase is 'up to'. Most times, these attractive rates only apply if you have a four-figure outstanding balance to begin with.

However, if you are going to rely on the services touted as extra benefits, it is important to read the fine print. Although one card says it offers its gold cardholders emergency roadside assistance, the towing and roadside repair services are not free - cardholders have to pay the assistance network that responds.

While gold and classic cards are close cousins, platinum cards are in a different league altogether. Their annual fees are about seven times higher than classic cards' and the income requirement starts at six figures.

Platinum cards come with greater service and exclusivity and are targeted at the affluent. Research has revealed that affluent consumers like travel benefits and protection, preferential treatment and lifestyle privileges.

A common offering of platinum cards is concierge services, which help you book tickets and plan your travel. You also gain entry to exclusive clubs and discounts.