Platinum, Gold or Standard
If you choose to apply for a credit card then apart from being confronted by a large choice in lenders and different types of credit cards (around 1,500 today), you may find a range of tiers in terms of credit cards.
These can vary from company to company but are usually split into three sub-categories:
Not all lenders will offer a service of this kind and is more likely to be found with companies such as Morgan Stanley and MasterCard. Of course it will have its benefits being awarded with a tier to match your financial circumstances but to obtain this type of offer; a very high credit rating will be required to justify such a service.
What are the differences between the three tiers?
These services all come down to the overall limit that you will be offered with the standard rate being offered to most customers (the rate may also be slightly higher than the other two) because Platinum and Gold will see the allocated credit limit rise and often see a reduction in interest and APR rates at the same time.
In some cases despite the coinciding income, if a credit rating is quite poor then the higher tier services are is unlikely to be offered but with the average credit limit being around £2,000 - £5,000 this can prove to be an expensive mistake and with the interest charges on top of this, it can lead to being more trouble than it is worth.
How does this work?
When one chooses to apply for a credit card then the allocated limit (should your application be successful) all comes down to the total household income.
It is usually broken down as follows:
Standard - £13,000 - £20,000
Platinum - £21,000 – £40,000
Gold - £41,000 +
Of course, this is a rough example of how companies operate along with the wage brackets that they will consider and this will vary from lender to lender but it entirely comes down to the income and outgoings ratio which will establish what tier you will get and what your limit will be.
Do I need to accept the service which is offered to me?
The answer to this is no, even if you apply for a credit card. Until you sign the official lenders contract there is no need to accept their offer should you change their mind.
With this fact, it is the same if you are offered a higher tier service and aren’t completely happy with the offer. Should you prefer a lower tier with a lower credit limit then request this before signing any contracts because it will prove to be more difficult to be realised from the agreement between both parties.
Applying for and holding a credit card is solely your decision and if you are not completely happy with the offer that has been presented then kindly decline and keep on searching if you would like to secure a better deal.
With around 1500 active companies you will be spoilt for choice.