Gold, black and platinum credit cards offer more perks and features than regular cards. These usually include higher credit limits, free insurance policies, airport lounge access, rewards programs with better points multipliers, better promotions, purchase protection and extended warranty policies… the list goes on However, this all comes at a cost - likely a hefty annual fee and/or a high interest rate.

See Also: American Express Product Reviews

Gold, Platinum or Black Credit Card - What's the Difference?

While gold is the best Olympic medal, it is usually bottom-tier when it comes to premium credit cards. They are also becoming quite rare as companies look to upweight the perception of their products by calling more of them Platinum or Black.

Be aware, too, that some prestige cards might not be credit cards at all; they might actually be charge cards. Charge cards are different in that they usually have no pre-set spending limit, and you need to pay the balance off in full every month.

Regardless, you will likely need a high level of annual income as well as solid credit history and track record of employment to be approved for premium type cards.

Gold and Platinum Cards

Gold and platinum credit cards carry status and benefits not usually available with standard cards. From frequent flyer points to insurance or concierge services, the rewards are typically dependent on how much you spend, and the cards often come with a higher annual fee.

However, at this level it's often choose-your-own-adventure; cards tend to offer a blend of perks but not all, so you'll have to choose one that suits your needs.

For example, a product might offer 2 points per dollar spent, but not come with airport lounge access or travel insurance. This might be useless to you if you want the card for travel.

Popular Gold and Platinum Credit Cards in Australia

Black Cards

Black credit cards are the most exclusive of these types of cards; with a black credit card you will receive superior perks and rewards.

Black credit cards offer a level of exclusivity that other cards do not possess. In order to be considered for a black card you need to spend considerable amounts of money (in the tens of thousands of dollars) on the card throughout the year. However some 'Black' cards are decidedly more attainable - there is no set definition. 

They might also come with a hefty annual fee and income requirements. Be aware that not all of these types of cards are explicitly called 'black' cards - American Express' Centurion for example is one of the most enigmatic black cards out there.

Popular Black Cards in Australia

  • Westpac Altitude Black

  • ANZ Rewards Black

  • Citi Prestige

  • Macquarie Black Card

Make Sure You're Seeing Value

You might run some quick numbers on a product and think, Hey I'm making something for nothing here. However, with premium cards they are ostensibly still making money off you, otherwise why would banks and credit providers offer them?

Retention for Points Bonuses

One of the main attractions for signing up to a new credit card is the promise of a lot of points. Periodical offers sometimes see 100,000-plus points added to your account, whether that's Qantas, Velocity or some other program. Sometimes they're enough for a business class leg to London, for example.

Back in the day you used to be able to more effectively 'churn' your card regularly to take advantage of points. However nowadays credit card providers usually dangle the carrot to then hit you with the stick of having to stay with them for at least 90 days to claim the points. Sometimes they'll put a minimum spend on that requirement as well.

The Perks vs Cost Equation

Most of these cards have a hefty annual fee, minimum spending amounts and more. You will have to weigh up the actual value you're getting from these programs. Ostensibly most accounts don't, which is why providers can continue to offer them. For example, Amex on its most prestigious cards offers a $450 travel credit - you'll want to make sure you're cashing that in if you're paying the hefty annual fee, and then some.

Golden Handcuffs

Many of these platinum cards have such good programs they can be hard to break away from. For example, you might get Qantas Points, and even if there's a cheaper flight somewhere, you might still go with Qantas just for the points. Similarly, if your travel credit only extends to certain hotels, but you want to stay at a cheap Airbnb, you're again shackled to your credit card.

The providers and associated retailers know this, and know the power of partnering up with popular prestige card providers. The effect of these programs is that they can make it harder for you to make a rational economic choice, and limit your options when it comes to purchase and travel decisions.

Influence Your Shopping Habits

If you're a customer of these products, you'll no doubt receive a lot of emails on ways you can boost your points accrual. For example, you might get a limited-time points multiplier if you shop at Woolies or Coles, buy a particular product, or fill up at a particular service station.

While tempting, you'll have to pause and actually think about if you're changing your shopping habits (read: spending more) just to get points or some other perk. If you wouldn't normally buy that product, or shop at that retailer, for example, then it makes little sense to change your habits just for a credit card.

Putting Everything on the Card

In order to make the most of your points, and satisfy minimum spending limits, you're probably going to have to put most or all of your purchases on the card. This even goes down to the $5 coffee. Every point adds up, and in the end can mean the difference between jagging a flight upgrade or not.

While this can be good for points and making use of the card, it can lead to bill shock when the statement rolls in. At the end of the day, a credit card is a loan and you should avoid the temptation to live beyond your means, because the penalty for not paying off your statement can be an interest rate in excess of 20% p.a.

Before Jumping In, Here's What to Consider

The allure of points, 5-star hotels and airport lounges is undeniable, but before you get carried away, here are the basics to consider.

Strict Eligibility

If you're applying for these cards, you'll likely need a good income ($50,000 might be okay for some; others will want to see $100k-plus). On top of this you'll need a good credit history and stable, full-time employment. This might rule out casual employees, the newly self-employed, retirees or students.

High Minimum Credit Limits

Many have a high requisite credit limit of $10,000 or more. You obviously don't need to spend this, but it gives you a long leash to run with. It will also factor into other areas of life, such as home loan borrowing capacity.

Spending Minimums

To get a lot of the perks many providers have moved to imposing minimum spending limits. This might be in the realm of $3,000 or $4,000 (or more) per month. Providers want you actively using the card, not just benefiting from the perks.

High Annual Fee

It's very rare for a prestige card to offer a $0 annual fee, other than if you meet minimum spending thresholds or make use of a first-year offer. Some cards charge in excess of $400 per year, while others such as the Amex Platinum charge more than $1,000 per year, so you'll want to make sure you're seeing value.

High Interest Rate

Best-case scenario you will pay off your statement within the interest-free period every time. However, if you can't or don't, in all likelihood you'll get slugged with a very high interest rate north of 20% p.a.

For example, if you had a card with a 20% p.a. interest rate, a $400 annual fee, and had an outstanding balance of $10,000 and a minimum repayment of $30, it would take you more than 40 years to pay it all off, and pay in excess of $8,000 in interest in that time if you made no extra repayments!

While a dramatic example, it goes to show how debt can spiral with any credit card, let alone prestige cards.

See Also: Credit Card Repayment Calculator

Consider if the Product is Right For You

At the end of the day you might get more bang-for-buck with another product, even if it doesn't make you feel like a baller.

For example, if you only want to keep a card for emergencies, it might be wise to look for one with no annual fee. If you expect to carry a balance, look for one with lower interest rates or a balance transfer offer. If you only travel overseas occasionally and don't care about lounges, consider that many more basic credit cards and even debit cards offer fee-free international transactions. Or if you want to gain points on your everyday shop, many offer low-cost points programs.