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The state of your credit report helps determine if you can qualify for a credit card, and if so, which type. The higher your credit score, the more likely you are to get approved for cards with lower interest rates and better perks.
A preferred credit card is a higher-tier card that's offered to consumers with strong credit reports. These cards typically offer more benefits than basic credit cards, though they sometimes carry higher annual fees.
How Do Preferred Credit Cards Work?
If your credit isn't in ideal shape, you may only qualify for a credit card that doesn't have any bells and whistles, or you may be eligible for a simple cash back card that provides a low, flat earnings rate. If your credit score is considered low, you may only be able to get approved for a secured credit card that requires you to put down a security deposit and provides few perks beyond helping you to build or improve your credit.
For customers with good to excellent credit, however, some credit card companies offer preferred cards that provide more premium reward offerings and better benefits. These cards aren't strictly defined, but they may offer benefits like travel-related perks, increased rewards earnings or additional cardholder protections. The cards may also come with shopping benefits such as extended warranties and price protection. These benefits may come at a cost, however, in the form of annual fees, which can negate some of the card's benefits.
What Is the Difference Between Preferred and Platinum Credit Cards?
Credit card issuers use different card names to mean various things, and there aren't any hard-and-fast rules about what preferred or platinum means when attached to a given credit card. Sometimes, card issuers use words like Gold, World, Premier, Priority or Premium to communicate that these cards are of a higher tier and geared toward those with solid credit.
With some card issuers, a platinum credit card is of a higher echelon in terms of qualification requirements and benefits than a standard card. Like a preferred card, the rewards programs and benefit offerings provided by a platinum card may be more robust, with elite status, freebies like checked bags, and other perks. Still other issuers may use the platinum moniker more loosely, applying it to standard cards with unremarkable cardholder benefits.
Platinum and preferred may differ when cards carrying those labels are offered by the same card issuer. For example, an issuer could offer a platinum card with a $700 annual fee and a preferred card with a $95 annual fee. That's a big difference. However, these cards generally offer statement credits that offset the annual fee. You'll just need to make sure you read the statement credit terms and use them.
While you can offset a high annual fee platinum card, you shouldn't base your decision off the statement credits since you'll need to pay for the annual fee upfront. Statement credits generally give you a certain amount of money back every month, so it will take a while to offset the annual fee. If you can't reasonably afford to pay a $700 annual fee today, or don't plan on taking advantage of all the statement credit offers, it can be a better idea to stick with the lower, $95 annual fee card.
What to Look for in a Preferred Credit Card
There are plenty of preferred credit cards to choose from, each with varying benefits and terms. Here are some key features to look for:
- One-time intro bonuses
- Rewards rates based on your top spending categories such as travel, dining, gas or groceries
- Statement credits for things like streaming services, hotels and airfare
- Additional perks such as trip cancellation insurance and rental car insurance
- No foreign transaction fees
Get Custom Credit Card Offers
Not sure which type of credit card your credit score can get you? Try Experian CreditMatch™ for free and get quickly matched with personalized credit card offers. It won't affect your credit and can help you compare offers from many card issuers.