May 29, 2006

By Peter Kenny

In the last couple of years there have been more entrants into the UK credit card market than in any period before. The amount of credit card providers has increased dramatically and this has had numerous benefits for customers. The main benefit of all of this increased competition is that prices of for customers have dropped dramatically.

You can now get access to deals and credit card offers that would have been literally unthinkable just a few short years ago. It is hard to imagine that many of the credit card features and offers, and many of the products that customers in the UK are now taking for granted would not have been possible or available at all in past years.

One of these new features that has hit the market and been making an impact on the UK credit card industry is the new availability of so called premium. Premium would include options such as gold cards and platinum cards that many credit card providers are offering to customers.

As well as offering a certain degree of prestige to the customer, who may be attracted to the prospect of standing out from the crowd, these premium will also offer a package of benefits over and above what ordinary will offer. These benefits may include lower interest rates, more attractive terms and conditions on the card, and very attractive reward schemes.

If you spend a lot on your credit card, and use the card for a large amount of payments every month, then a reward scheme will be a good way of collecting benefits. Most reward schemes will either offer you cash back, which will be calculated as a certain percentage of what you spend on the card. You may also be rewarded in points that can be used to select or buy rewards from a catalogue. Another way of operating reward schemes that is becoming increasingly attractive is to offer customers air miles as their reward. In this way, you may be able to get a free flight every year or more.

Before you get over excited about the benefits of a premium credit card however, it is important to remember that in many circumstances you will have to pay a fee for the credit card. This may be levied monthly or annually but you will have to look at the benefits of the fee paying card carefully before agreeing to sign up as you will have to make sure that the fee is justified.