Guide to Premium Credit Cards

High limit, or premium, credit cards provide top-notch service, the desirable benefits and rewards programmes and, yes, often the potential for very high credit limits. For this reason, high limit credit cards are those that stand at the top of the market.

What is a high limit credit card?

You’ll often hear people talking about ‘high limit credit cards’. So let’s start with an important point. Credit card issuers don’t market their cards as ‘high limit’ cards. The reason for this is simple: The credit limit on a credit card will be determined based on the credit-worthiness of the person applying. So even if a card would offer a very high credit limit to some cardholders, that doesn’t mean that all applicants will get offered a high limit. That said, ‘premium’ credit cards typically offer the potential to get a high credit limit.

Out in the wild, you may see these kinds of cards specifically referred to as premium, but they’re also often referred to as platinum or gold cards. And while these high-end cards may award some customers particularly high credit limits, in theory, some credit cards have no limit on how much you can spend. However, typically a premium credit card has a limit somewhere in the tens of thousands. It can also be the case that if the card has no limit, the provider will instead approve the purchases on a case-by-case basis.

In some circumstances, the cards with the highest spending limits are actually charge cards. These differ from credit cards in that they have no borrowing facility, so you must pay your full balance at the end of each month.

Some high limit credit cards are not open to public applications; instead, you have to wait for an invitation from the credit card provider. An invitation is only likely to be issued if you already hold another product with the provider and have reached the required eligibility criteria.

How to get your maximum limit

Your credit card limit is determined by a number of factors. Providers take into account your credit history, available income, existing credit commitments and credit limits elsewhere.

In order to be eligible for a high limit credit card, you will need to meet a minimum income requirement. This could be anything from £20,000 per year to having a high net worth (e.g. being a millionaire) at the top end. Providers will also require you to have a strong credit history and be over 21 rather than the standard minimum age of 18.

Here are few other things you can do to ensure that you have the best chance of securing a high limit credit card:

  • Credit utilisation – Have you heard of the 30% rule on your credit utilisation ratio? If you are looking to achieve a higher limit, it pays to look at how you are using your existing credit limit. Providers will look more kindly on your application if you only ever use around 30% of your available credit limit. Keeping well within your current credit limit shows providers that you are not desperate for money and maxing out existing credit cards.
  • Make your payments – There is nothing more key than keeping on top of your credit card payments if you are looking to secure more credit. If you can demonstrate that you make your minimum payments each month, then you put yourself in a strong position. This also applies to other regular payments you have, such as direct debits and standing orders. Any missed or late payments can have a negative impact on your credit score, therefore making it harder for you to obtain a higher limit credit card.
  • Increase your income – Sometimes the way to borrow more money is to earn more money. If you can increase your income, then providers will be more willing to lend you money as they are more confident you will be able to repay your debt.

What’s the catch?

The main drawback of premium cards is that they typically have annual fees. These fees can range from as low as £24 up to thousands of pounds.

However, often with an annual fee come additional perks such as:

  • Frequent flyer miles
  • Access to first class lounges
  • Companion tickets
  • Advanced tickets for events
  • Reservations at top restaurants
  • Travel insurance
  • Breakdown cover
  • Concierge card service

When considering a card with an annual fee, it is worth calculating how much of what is on offer you would get value from, and therefore whether an annual fee would be cost-effective for your personal circumstances.

The big picture on high credit limits

While higher credit limits may seem attractive, they often come with high interest charges. If you have bad spending habits or think you may struggle with the repayments, you could end up with a high level of debt. Consider beforehand whether, if you are spending large amounts, you could afford to make the monthly repayments and also whether you could afford the annual fee associated with the card. Don’t be tempted to chase the biggest limits and the top-end premium credit cards you can find if you can’t afford them and don’t need them.

It is also best to look at what features the card offers as well. Consider any reward programme or additional benefits you could receive, alongside any introductory periods that the card may offer.

Before applying for a credit card, it is worth checking whether you are likely to be accepted, since every rejected card application can leave a negative mark on your credit report and make obtaining credit in the future that much harder. Look to do a soft search (also often called an ‘eligibility check’) which will not impact your credit score and consider whether you match the card’s eligibility criteria before making your application.

If you are unhappy with your current credit limit, you could always ask your existing provider for an increase rather than applying for a new card. It helps if you have held the card for a period of time so that the provider can see that you are a responsible borrower. Other factors such as an increased income will also help if you decide to apply for a credit limit increase.

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