3 Signs You're Ready for a Premium Credit Card
Image source: Getty Images
The best premium credit cards offer long lists of luxury perks, from lounge access to hotel upgrades to travel credits. They also come with high annual fees to match, which means they aren't a great fit for everyone.
Still, for the right person, these cards can easily be worth it. Here are three signs you're ready to level up to a premium credit card.
1. You have strong credit with little debt
Premium cards are typically reserved for applicants with "very good" or "excellent" credit, meaning a FICO® Score of 740 or higher. If your score is in that range and you don't have too much debt on the books, you should be in good shape.
It's also important to be disciplined with your budget. Premium cards usually come with higher credit limits, and it can be tempting to spend more than you normally would. If you've always paid your balance in full and avoided interest, though, you should be able to safely take advantage.
2. You spend enough to justify the annual fee
Most premium credit cards charge hundreds of dollars in annual fees per year. In exchange, they offer points, credits, and benefits that can be worth far more -- if you're actually using them regularly.
If you already spend a few thousand dollars a month on travel, dining, or other categories the card rewards, you're more likely to earn enough points and credits to outweigh the cost.
The same goes for welcome bonuses: many premium cards offer large sign-up bonuses, but you'll typically need to spend a few thousand dollars within three to six months to earn them.
Not sure if the math works? Simply add up the perks you'd actually use, like travel credits, bonus points, and lounge access, and compare that to the annual fee. If you're easily coming out ahead, that's a strong sign you're ready.
Looking for a card that rewards big spending? Check out one of our top premium credit card picks, with thousands of dollars in annual perks.
3. You'll actually use the benefits
Most premium cards are packed with travel perks, too: TSA PreCheck credits, hotel upgrades, airport lounges, travel insurance, and more. But if you rarely leave town or book budget trips, you probably won't take full advantage.
These benefits also require some effort. You may need to activate certain credits, book through a travel portal, or sign up for third-party memberships. If you travel often and don't mind managing a few extra steps, you're more likely to get your money's worth.
On the flip side, if you'd rather keep things simple, you might be better off with a cheaper alternative.
Feeling ready? Apply today to rack up rewards
You're probably ready for a premium credit card if you:
- Spend enough to make up for the annual fee
- Travel often and use the perks
- Manage credit responsibly
If you don't check all those boxes, don't worry -- there are plenty of less expensive options that still offer strong rewards and benefits. If you do, though, the right premium card can deliver serious value.
Ready to level up your rewards? Check out our list of the best luxury credit cards and apply today.
Our Research Expert
Ryan is a full-time Personal Finance Writer at Motley Fool Money. He’s been covering topics like credit cards and savings since 2022, focusing on helping people who are new to the world of personal finance.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.