Nila Sweeney
Having a prestige card is great for those who follow the rules and an expensive mistake for those who don’t. Read the following scenarios to avoid falling into the common traps!
Worst-case scenario
You rack up expenses on the card and compound them each month by adding more to your balance than you make in repayments. After making a couple of late repayments throughout the year you pay added interest and late payment fees in addition to your annual fee. Meanwhile you only get a very small cash equivalent in rewards due to your overall low annual spend. At the end of the year, you are actually worse off.
Best-case scenario
You always pay your bills on time and in full, meaning the only cost you incur is the annual fee. Your annual spend entitles you to several domestic return flights, or a cash back lump sum. You also receive one complimentary flight and use the free concierge services to book holiday activities.
Remember that expense doesn’t equal class. Over half of all prestige cards in the market have higher annual fees but offer little more than the gold or platinum status of the card. 

Do

-Put as much everyday spend as possible onto the card

-Use complimentary flights and benefits before they expire

-Get familiar with the details and eligibility criteria for benefits

-Buy big ticket items and travel on the card to take advantage of extended warranty, purchase protection and travel insurance

-Call your concierge and make the most of their offer to make reservations on your behalf 

-Choose a card with point caps that match your spending habits 

-Pay your balance back in full each and every month within the interest free period

Don’t

-Use the card for cash advances or revolving credit

-Spend more for the sake of earning extra points

-Forget to check your points balance and let them expire (some cards have points that expire after three years, others have no expiry date)

-Spend more in annual fees that you get back in benefits each year

-Automatically assume extended warranties or travel insurance coverage (check eligibility details)

 

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How to choose a gold or platinum card

 

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