Is a Premium Credit Card Worth It in Canada?
A premium credit card in Canada is generally only worthwhile if you regularly use the rewards, perks, and benefits enough to justify the higher annual fee.
If you travel frequently, shop often, or want access to exclusive insurance and lounge privileges, these cards can provide real value. The other consideration is the welcome bonus. If it’s a generous offer, it can usually be worth two to three annual fees, so it’s a good way to test out the card.
However, for those who don’t travel much or mostly spend on everyday purchases, the premium perks might not be worth the cost.
With many Canadian credit cards offering travel rewards, lifestyle credits, and luxury experiences, it can be tempting to upgrade. However, getting the most out of a premium card depends on your personal spending habits and needs.
Understanding Premium Credit Cards in Canada
Premium credit cards in Canada stand out due to their robust rewards programs, elevated perks, and significant travel and insurance benefits. These cards also tend to have higher annual fees and stricter eligibility requirements than basic cards, making their value dependent on your personal spending and lifestyle.
Key Features and Benefits
Premium credit cards offer a variety of perks for frequent travellers, high spenders, and those who value convenience and security. Common advantages include access to airport lounges, comprehensive travel insurance, and priority boarding.
Additionally, depending on the card, you may receive extra perks such as hotel benefits, retail credits, exclusive dining experiences and concierge services. At face value, many people may not find the perks offered to be worth the annual fee, but to others, having a premium credit card is a status symbol.
Annual Fees and Costs
Premium credit cards in Canada typically have annual fees of $399 or more. Higher fees often indicate better rewards, travel credits, and insurance, but it’s crucial to calculate whether you’ll make enough use of these perks to justify the expense.
It’s worth mentioning that no premium credit cards in Canada offer no foreign transaction fees.
Whenever considering a premium credit card, always weigh the costs against the benefits you’re getting.
Eligibility Criteria
To qualify for a premium credit card in Canada, you generally need a good to excellent credit score – typically 700 or higher. Most issuers also require a minimum personal income, which can range from $60,000 to $120,000 per year, or household income thresholds for shared cards. That said, American Express does not have a formal income requirement, so it is possible to get the Amex Platinum Card with a lower income.
Comparing Value: Premium vs. Standard Credit Cards
Premium and standard credit cards vary in the rewards, travel perks, and additional features they include. Costs like annual fees often differ, and the benefits may only be valuable if they align with your spending habits and lifestyle.
Earning and Redeeming Rewards
Premium credit cards typically offer higher standard reward rates. For instance, you might earn 1.25 points per dollar on most purchases. However, some basic cards, like the American Express Cobalt Card, provide higher earning rates on eating out and drinks, at 5 times the points. If you spend heavily in certain categories, a premium card can give you more value. Otherwise, basic cards might be more practical if your spending is more varied or if you prefer simple cash back.
Travel Perks and Insurance Coverage
Premium cards may offer extensive travel perks, including airport lounge access, travel insurance, priority boarding, and annual travel credits. These benefits can be valued at several hundred dollars per year, especially if you travel a few times annually.
While standard travel credit cards may offer some benefits, they’re usually not as generous as premium cards.
If you travel frequently or require strong insurance protection, premium cards can make a noticeable difference. For occasional travellers, these perks may not justify the higher annual fee.
The Best Premium Credit Cards in Canada
Premium credit cards in Canada cater to high spenders and frequent travellers with a suite of exclusive rewards and benefits. Each card on this list charges a substantial annual fee, but offers significant value with travel perks, insurance coverage, and points-earning potential.
American Express Platinum Card
The American Express Platinum Card is recognized for its broad range of travel benefits, including unlimited access to airport lounges worldwide through the Global Lounge Collection. You also receive an annual $200 travel credit, a yearly $200 dining credit and comprehensive travel insurance.
The earning rate is 2 points per $1 spent on dining and travel, and 1 point on all other purchases. The card also unlocks hotel privileges, including status upgrades with Marriott Bonvoy and Hilton Honors.
A key consideration is the annual fee of $799. While the annual credits offset this fee by $400, you’re still paying a net yearly fee of $399. You need to decide if the benefits you’re getting are worth more than the fee.
TD Aeroplan Visa Infinite Privilege Card
The TD Aeroplan Visa Infinite Privilege Card is tailored for Air Canada and Aeroplan fans. You enjoy priority check-in, priority boarding, free checked bags, and Maple Leaf Lounge access.
The card earns you 2 Aeroplan points per $1 spent on eligible Air Canada purchases, 1.5 points on gas, groceries, and travel, and 1.25 points on everything else. These points can be redeemed for flights and other rewards within the Aeroplan program. Considering one Aeroplan point is worth 1.5 to 2 cents, there can be incredible value here.
You also get extensive travel insurance, including trip cancellation and rental car collision coverage. The annual fee is $599, which makes sense if you regularly fly Air Canada and want to maximize your Aeroplan points and travel benefits.
RBC Avion Visa Infinite Privilege Card
The RBC Avion Visa Infinite Privilege Card earns you Avion Rewards. You get 2 points per $1 spent on travel, 1.25 points per $1 on all other purchases. Your points can be redeemed for any type of travel available on the RBC travel portal, or you can transfer your points to airline partners such as WestJet and British Airways.
Some of the benefits included with the card are six airport lounge passes, premium travel insurance, and exclusive hotel upgrades. A $399 annual fee is charged, which is lower than other premium options while still providing considerable benefits.
This card is ideal if you want flexibility in redeeming rewards, particularly for travel outside fixed airline partners.
Who Should Consider a Premium Credit Card?
Premium credit cards are not the right fit for everyone, but certain groups can make excellent use of their benefits. Key factors include your spending patterns, travel habits, and professional needs.
Assessing Spending Habits
If you consistently spend over $2,000 each month on your credit card, the higher earn rates on premium cards can provide substantial rewards. These cards usually offer better returns on groceries, dining, gas, and travel, often between 2% and 5% in rewards per dollar.
Large monthly expenses like family groceries or recurring household bills can help maximize reward potential. For those who rarely carry a balance, the extra perks often outweigh the annual fee, as long as you pay the card in full to avoid interest charges.
Some premium cards also include annual credits or perks – such as travel credits, streaming service rebates, or lounge passes – that can directly reduce the yearly fee. If you regularly make use of these benefits, the value you get can easily surpass what you pay.
Frequent Travellers
Frequent flyers or those travelling multiple times a year benefit the most from premium cards. Features like airport lounge access, travel insurance, and priority boarding can provide added convenience and savings.
For those redeeming points for flights or hotels, higher earning rates and flexible redemption options make it easier to get the most value. This is especially true for cards linked to major airline or hotel loyalty programs, which offer exclusive access and discounts.
Business and Professional Users
Self-employed individuals, small business owners, and professionals who frequently entertain clients or travel for work can benefit substantially from premium cards. Many cards offer higher credit limits and better welcome bonuses, supporting large purchases.
Final Thoughts
When choosing a premium credit card in Canada, compare the annual fee to the value you expect from its benefits. These fees can be $399 or higher.
Consider your spending habits. If you travel frequently or spend extensively in specific categories, rewards and benefits like airport lounge access, insurance, and higher earn rates might justify the expense.
Frequently Asked Questions
What benefits justify the high annual fee of premium credit cards in Canada?
Look for airport lounge access, priority airline services, comprehensive travel insurance, exclusive event access, and retail credits.
Which premium credit card offers the best benefits in Canada?
The best card depends on your lifestyle and preferences. Some cards excel in travel rewards while others focus on flexible points or luxury benefits. Major options from banks like American Express, TD, or RBC stand out for features such as airport lounge access and premium insurance coverage.
What are the typical qualification requirements for a premium credit card?
Most issuers require a credit score of at least 725, with some cards needing an “excellent” rating above 759. You may also need to meet minimum income thresholds, typically around $60,000 per year individually or $120,000 per household. Banks may also look for a solid payment history and existing credit limits.
Can you get a premium credit card for free?
Premium credit cards in Canada usually charge an annual fee starting at $399. The fee is never waived, but some banks will offer a discount if you hold a qualifying bank account. You should weigh the potential rewards against these fees to assess overall value.
