Credit Card Guide

What is a Gold Credit Card?

22 February 2011 by CreditCardsCo™

While not as seemingly prestigious as its platinum contender, the gold credit card gives cardholders a higher standard that a basic credit card. The mere color of a gold card gives suggestions of affluence and high standing. Gold cards are very similar to platinum cards in so much as benefits and rewards, but should a bank or financial institution offer both, the platinum is usually the better of the two.

Gold cards of today are not as meaningful as gold cards of the past, but they do still offer a higher standard and better reward or bonus benefits than them. It is sometimes harder to obtain a gold card than it is to get a regular credit card, although the application process is very similar and in most cases the same.

Gold Card Benefits

Most companies offering credit cards also offer incentives to entice customers to apply for their cards. Incentives for gold cards are usually better than those offered for applying for a regular credit card, and usually include: travel and lost luggage protection, a larger credit limit with a lower APR, although interest rates vary from card to card, and Purchase protection to protect against lost or stolen purchases made with the card.

Exclusive opportunities to purchase tickets for special events before they become available to members of the general public, and discounts at specific stores and venues are also added incentives to obtain gold credit cards from a certain bank.

Gold Card Pitfalls

When applying for a gold credit card, make sure to read all of the information available pertaining to that specific card. All too often an introductory interest rate will be fixed to a set amount of time, usually 6-12 months depending on the card. After that time a higher rate will be charged. If cardholders are not aware of this, or do not heed it, it is easy to overlook the fact that what started out as a good deal can quickly escalate into major debt.

It is also the case that some credit cards may be charged a high default interest rate even if a payment has never been missed or late, due to the fact that another account with the same bank or provider has defaulted. This is called the universal default, and many borrowers or cardholders are unaware of its existence. When this happens it is easy for financial problems to escalate out of control. It is also the case that most card issuers can raise interest rates for any reason at any time.

Should Gold Be Your Goal?

Before deciding which gold credit card you are going to apply for, ensure you weigh up all the pro's and con's. While a gold card may offer you more incentives or bonuses, if you have few spending needs you might find that the fees charged for the use of a gold card make the ownership of one more of a burden than a bonus. On the other hand, if you are a card holder that travels extensively or uses the gym frequently, then the air-miles rewards or that free gym membership might prove to be beneficial to you.

Compare different cards and different issuers and study all of the relevant terms and conditions. Check the annual or monthly fees, if any. Ask about specific fraud and purchase protection and ensure that they are suitable for your requirements.

If you do decide to apply for a gold credit card, be prepared for the bank to do extensive credit history checks. This is necessary due to the increased credit limit on offer.

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