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If you are considering a premium credit card, it’s important to choose the one you are most likely to benefit from. If you don’t think you’ll make full use of the perks on offer, or the amount you’ll save will not cover the annual fee, a premium credit card is unlikely to be the right choice for you.

You’ll also need to consider whether you meet the qualifying criteria. Is your salary high enough? Is your credit score good enough? Note that you can check your credit score for free through various online services.

If you decide to go ahead and apply for a premium credit card, make sure you can afford to clear your balance each month. Premium credit cards rarely offer interest-free deals, so don’t be tempted to spend more than you can afford to pay back, on time, each month.

If you are unable to pay off your balance in full, the amount of interest you pay will far outweigh any benefits. Plus, if you miss a payment altogether you risk damaging your credit score and you could also lose the card perks.

Finally, make sure you check the terms and conditions of benefits such as travel insurance – you may find certain medical conditions are excluded, there might be maximum age limits applied, or the cover isn’t as comprehensive as it would be if you applied for it separately elsewhere.

Rachel Springall, finance expert at Moneyfacts Compare, commented: “Consumers who are searching for a credit card for everyday purchases may wish to choose one that offers cashback on spending or that includes enticing perks.

“However, consumers must be sure to make full use of any benefits on their credit card if they are paying a fee for the ad-on. The best cost-saving package comes down to someone’s situation, but it’s imperative to pay off any debts that are incurring interest as these charges eat into any perks, such as cashback.”

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