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Gold cards are not just about prestige – they offer added features regular cards don’t, but they come at a premium, and not just anyone can get them.
The benefits of a gold card, aside from bragging rights, often include reward point and cash back programs, complimentary travel insurance, enhanced purchase protection, such as replacement of items damaged or stolen within three months of purchase, complimentary lounge access and more. For frequent travellers and high spenders, these cards could be perfect, but they are often suitable for more modest users as well. Like many other cards, gold cards sometimes come with an introductory offer of low or zero interest rates and reduced or waived annual fees.
As they typically come with higher spending limits, the approval process for gold cards is more stringent and only those with stellar credit scores and income typically over $25,00 per annum need apply. Furthermore, the banks feel justified charging higher interest rates on purchases, as well as higher annual fees, in exchange for the extra features of a gold card – if you don’t pay off the balance in full, your finances can easily spiral out of control. Finally, as the variety of features is often very different from one card to the next, it’s wise to read the fine print. When it comes to rewards programs, for example, one that pays 1 point per dollar spent can often be more valuable than those offering 2 points per dollar spent – it depends on what program. If the card comes with benefits you are unlikely to reap, there are other types of cards that could be more suitable for you.
They are designed for the Australian resident or citizen over 18 who has a great credit history, an income of $25,000 p.a or more, spends enough to benefit from a rewards program and is looking for good security features and perhaps some handy travel extras.
Common features and benefits include a rewards program with which you can earn points (and redeem them for flights, merchandise, gift cards, fuel, cash back and more), security features like fraud protection, complimentary travel insurance if you book your travel with your card, purchase protection, and extended warranty on items bought with a card. This warranty can cover against theft, loss or accidental damage for a period of time (usually 3 months). Most gold cards even offer their members a special number for legal or medical aid while travelling overseas.
No it’s not. Because of the higher interest rates (though many still have quite competitive rates), these cards are better suited to people who spend and repay faithfully. You’ll quickly rack up debt and affect your credit rating.
With a gold card, maximising the card usually means buying everything you can on it to earn maximum points and then paying it right back. You should also make sure your points don’t expire. Take advantage of whatever perks you are offered: Paying for travel expenses on your card will get you the complimentary travel insurance, which can save you hundreds instantly, and shopping with your card gives you greater protection than any other way of making purchases because of the security features.
Pick a card with the best rewards program for your spending. Some programs earn you air miles or flyer points, but if you don’t travel, you’ll probably want a rewards program with which you can redeem your points in other ways. Beware that not all points are worth the same, so a rewards program with which you earn 2 points per $1 spent, may not always be better than a program with which you earn 1.5 points per $1 spent because each point on the 2 points per $1 spent program may be worth less than the other program. Use maths to determine the value of points. Find the retail price of the product you want online and work out what a point is worth based on the points the rewards program is charging for the item but bear in mind that a point can be worth different amounts on different items.
The maximum amount of reward points you could earn during a given year is typically capped – usually pretty high for the average spender, but check to make sure you’re not going to be held back in any significant way.
It all depends on the rewards program. Most these days don’t, especially on a gold card, but always read the fine print. If they do, make sure you’ll be able to earn enough points and spend them within the set period.