Gold Credit Card Accounts No Nonsense Advice

You've been working on your payment history, managing your finances, retired some of your high rate credit cards, and now you're getting pre approved offers for Gold Credit Card Accounts. Life is good, right? You've finally "made it" and the door to financial prosperity is open and beckoning you, right?

Not necessarily. Banks and lending institutions use their metals cards (Gold and Platinum) as marketing tools. The general requirements for a Gold Card Account are a regular payment history of 2 years or more, an age in excess of 25 (21 in some cases) and a bank account that's held a balance in excess of $1,000 for over 18 months. Platinum cards have similar requirements, usually weighted towards a larger bank balance.

What the banks are relying on is this thought process "I've got a Gold Card Account, therefore I've Made It" or various variations of "Made It". Instead, like any credit offer, you should be doing some serious comparison shopping. A number of banks actually offer better rates, or better reward programs on their standard cards than on their Gold Cards, in part because their internal structure doesn't allow good rate and offer comparisons. However most Gold Cards and Platinum cards do have higher spending limits, allowing you to make bigger initial purchases and build up a larger debt!

So, as with any credit card account offer, look for the ones with no annual fees, or with reward programs you'll actually use. When you have the gold credit card, do the sensible thing and stay on your budget, paying your credit card off at the end of every month. Just because you've got a "lower" rate card still doesn't mean you shouldn't avoid paying interest wherever possible. Remember, the rule of 72 (divide 72 by the interest rate in points) will tell you how many years it takes for your cumulative interest payments to equal the amount you initially borrowed.

The real hazard with gold credit card accounts just like any other credit card is that they become a day to day habit - much of the current tightening market in consumer credit can ultimately be traced back to banks and financial institutions making questionable credit card promotional offers, which triggered people into running up massive credit card debt, which triggered a wave of refinanced mortgages to pay off that credit card debt in secured consolidation loans, which then went into multiple Adjustable Rate Mortgages, and caused the housing market to collapse.

Remember that credit is a tool, and that Gold Credit Card Account or not, you still have to make the payment each month, and you'll have to be able to use your credit appropriately.

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