When comparing credit cards you’ve probably seen elite cards advertised. These would be things like gold cards, platinum cards, or those with other specialty names like the Citi Select credit card. They’re appealing because they can be considered status symbols. But do you really need one?

To help you decide if a gold or platinum card is right for you, let’s look at some of the benefits and drawbacks.

Benefits of Elite Credit Cards

Here are three attractive benefits of elite credit cards like gold and platinum options:

1. More spending power — Gold and platinum credit cards generally feature higher credit limits than standard cards from the same company.
2. Better rewards programmes — Elite credit cards like the ANZ Rewards Platinum credit card often have advanced rewards programmes when compared to classic cards in the same programme. For example, you might earn more points per dollar spent, have a higher points cap, or get more bonus points for signing up.
3. Extra perks — You might also get better (or more) perks with gold and platinum cards than their traditional counterparts. For example, a classic card might feature basic perks like free international travel insurance and purchase cover. A gold or platinum card from the same company might offer extra perks like VIP lounge access at airports or a complimentary bottle of wine when you use your card to dine at partner restaurants.

Drawbacks of Elite Credit Cards

Gold and platinum cards sound good, right? Not so fast. Be sure to consider the downsides too before applying for one. For example, some elite card drawbacks include:

1. Higher costs — Gold and platinum cards often feature significantly higher annual fees than options with lower credit limits and fewer perks.
2. More debt potential — Just because you can have a higher credit limit, it doesn’t mean you should. Would you be able to pay significantly more back each month if you spent more? If not, you don’t need the limit increase. Are you prone to getting into credit card debt even with standard cards? If so, you might be better off sticking with what you have (or even cutting back).
3. Harder to get accepted — Unless you’re absolutely certain that you can be approved for a gold or platinum card, don’t apply. It’s harder to get accepted for them because of the increased risk in giving you a higher credit limit. And every enquiry stays on your credit file for years, whether you’re approved or not.

So, do you really need an elite credit card like a gold or platinum card? That’s entirely up to you. Just make sure you look at both the risks and rewards before jumping on any new credit card offer.