No longer confined to the hands of affluent city businessmen and wealthy heiresses, premium credit cards have become all the rage in recent years. Undoubtedly, the associated ‘snob-factor’ has proved hard to resist for many. But are there any real advantages in having a premium credit card and, more importantly, should you invest in one? Here’s a rough guide to the world of premium credit cards.

Most people are put off premium credit cards because they believe that they would be unable to afford the costs involved. However, surveys suggest that these credit cards generally come with lower APRs.

For the most part, premium credit card holders must deal with interest rates of around 14% or 15% compared to the standard 18-19% faced by other card-holders. As such, low interest rates make these cards an excellent option for just about anyone who wants to save on interest payments.

Low interest rates on premium credit cards might come as a surprise, but providers have had little choice given the current state of the premium credit card market in the United Kingdom. With few takers beyond the rich and famous, financial institutions are now seeking to attract less affluent Britons. It is therefore hardly surprising that most providers of premium credit cards require that you have an annual income of a mere £13,000 per annum.

There are further benefits to be gained as well. However, in general, these are only available to those card-holders who pay off their balance in full each month. For example, it’s perfectly possible to get a credit limit of a few thousand pounds if you pay off your entire balance at the end of each month. If you fail to do so, however, your credit limit is likely to be significantly lower. Other advantages include free travel insurance and cash back offers.

Critics, however, argue that you shouldn’t let such benefits sway you to switch to a premium credit card. After all, you’ll only receive additional benefits if you continually pay for purchases using your premium credit card. According to Kathy Foley of The Times, “Real perks only come with the credit cards aimed at those individuals who don’t need credit cards.”

The most exclusive of premium credit cards are available only to a lucky few. These include the American Express ‘Black Centurion’ credit card which is on offer only to a few select clients chosen by the company. Another example is the Signia Mastercard issued by the Queen’s bankers, Coutts and Co. If you’re lucky enough to possess either of these cards you can enjoy perks from worldwide concierge services to the use of luxury airport lounges.

So think carefully before switching to a premium credit card. Whilst there are benefits to be reaped, much depends on your current financial situation and the extent to which you value perks and freebies.