Are Gold Credit Cards Worth It?
There is a certain prestige that comes with being a gold credit cardholder, just as there is with driving a luxury car or living in a nice area of town. But are they really worth it?
The Pros and Cons
There are many benefits to gold credit cards, but there are also drawbacks.
Pros
- Reward programs offering a range of benefits
- Domestic and international travel insurance
- Purchase insurance
- Higher credit limits
- Personalised service for cardholders with 24/7 assistance
Cons
- Annual fees and interest rates tend to be higher
- Applicants require higher annual income and a good credit score to be approved
- If benefits aren't used they can be a waste of money
What Are the Most Common Features?
Rewards Programs
Perhaps the most desirable feature of a gold credit card is the reward program. These work on the basis that for every dollar spent you earn a certain number of points. As your points accumulate you can then cash them in for perks such as free stays in hotels, shopping or petrol vouchers etc.
Domestic and International Travel Insurance
Most gold credit cards offer their cardholders domestic or international travel insurance, with some offering both. While the level of cover offered varies between banks, this is a benefit that can save money and time in organising cover separately.
Purchase Insurance
Many lenders offer purchase insurance that covers items purchased with the card against theft or accidental. The amount of coverage varies between lenders.
Higher Credit Limits
Gold credit cards typically offer a higher than average credit limit. A gold card is ideal if you need easy access to funds to cover the expense of an emergency or simply to buy an expensive item.
Personalised Service for Cardholders With 24/7 Assistance
If your card offers personalised assistance then it is possible to call their customer service department at any time of the day and use them to arrange anything from a purchase or taxi to the airport. This is widely regarded as one of the most practical benefits on offer.
Are They Suitable For You?
While the benefits are definitely attractive, ask yourself whether you will actually make any use of them before completing your application. Do you travel frequently? If not, then what do you need travel insurance for anyway! Do you spend a lot of money? If you are frugal, then the high credit limit is irrelevant.
Most importantly, do you pay your balance in full at the end of every month and make use of the rewards program? If you don't then it's probably not worth applying!