Insurance

Gold and platinum credit cards are not exactly like standard credit cards. They are more prestigious to own because they indicate that you, the card holder, have done a few things right in your financial life. To begin with these cards require you to have a slightly higher income then standard cards.

More importantly then earnings you have to have an excellent or very good credit rating in order to be approved for one. Those two qualities combine to make you the exact type of card owner that card issuers want to have on their books. They know that you will spend on your card regularly which helps them earn money and will pay off your debts in a timely manner which reduces their risk.

Because card issuers want clients with great credit scores and high earnings they offer them rewards above those that are offered to standard card holders. Gold and platinum credit cards typically come with complimentary insurances to protect them when they travel and to protect their purchases. Because the card holder has a higher income it is likely they will travel often so offering trip insurance is usually very valuable. The same is true of purchase protection and extended warranties, those cardholders who spend more money buy big ticket items that they need to protect with insurance. This extra layer of security is just one more thing to lure customers to a higher level credit card.

One of the other big benefits of gold and platinum credit cards is the rewards program. While there are rewards programs offered on some standard cards they are usually not as extensive as the ones offered on more prestigious cards. As you move up the credit card ladder you are able to earn more points for each dollar that you spend. Prestige cardholders usually have access to better rewards as well as rewards and discounts that come just from using their card and do not dip into the rewards point system.

The big drawback to these cards is that they often come with a very high annual fee, sometimes in the triple digits. While the rewards, insurances, and discounts you earn will usually offset that cost it is still something everyone, on any budget should take into consideration. If you will not use the rewards program there is really no point in paying for it no matter how much money you make a year.