Ten Reasons to Hate Prestige Credit Cards

For those of you who like to display your wealth through various status symbols, the prestige credit card is one symbol that you can do without. Whilst privilege cards are aimed at those leading extravagant lifestyles, their benefits can be overpriced and of little value in the end. Below are ten reasons why prestige cards should languish at the bottom of someone’s list of status symbols.

1. The Cost of Privilege

Whilst annual fees are almost a thing of the past with regards to mainstream credit cards, the prestige card can still demand a fee ranging from £150 to £650 a year.

2. Designer Highwaymen

The annual percentage rate (APR) levied by prestige credit cards can cause a serious dent to even the deepest pockets. When an annual fee of £250 is taken into account, the NatWest black credit card arrives at an APR of 50.3%. Compared to, lets say, the American Express Blue card, which has an APR of 6.9%, this seems a hell of an expense just to look good when flashing the plastic.

3. Airport Tax

Many card issuers, such as, American Express Centurion, Morgan Stanley and NatWest Black, target those executives who seem to spend their lives in airport lounges with the exclusive access to VIP lounges. However, VIP priority passes can be purchased for as little as £69 a year and offer the same privileges.

4. Travel Cover

Annual travel insurance is another privilege card perk that can be had for a fraction of the cost if purchased directly. For example, worldwide insurance cover for a family of four can be bought for only £60 a year, making the policy great value for money.

5. Cashback

Whilst you pay (in some cases, heavily) for the privilege of using your shiny prestige car, it appears that the card issuers themselves are not as forthcoming when it comes to paying you. Many cards only offer a paltry 1% cashback on purchases and that is on top of paying an annual fee for the card. There are many mainstream credit cards in the UK, the American Express Blue card for example, that does not charge an annual fee and offer 2% cashback for a limited period, usually three months, before reverting to its original rate of 1%.

6. Lawless Plastic

Until the Consumer Credit Act is updated next April, credit agreements of more than £25,000 will remain unregulated, leaving cards that offer credit limits of £50,000 unregulated.

7. Section 75

If any goods or services purchased with your credit card re faulty you can make a claim against your card issuer under section 75 of the Consumer Credit Act as it holds both the credit card companies and retailers “ jointly and severally liable” for losses on credit card purchases. However, this section only applies to goods valued at between £100 and £30,000.

8. Fraud Protection

Many prestige cards provide protection against fraudulent use, which is pretty useless considering fraud liability is capped at £50.

9. Useless info

Some cards promise to offer travel advice, such as medical requirements, on any country you’re a planning on visiting. Best sticking to the experts for such advice, such as the Foreign Office.

10. Value for Money?

Ultimately there a plethora of credit cards in the UK that offer far better value and rewards. For example, Capital One’s No Hassle card offers an APR 6.9% with no annual fee.