Preferred Credit Card: Everything you need to know

The Preferred credit card stands out by providing enhanced rewards and benefits for those with strong credit profiles.

In today’s financial landscape, credit cards offer a myriad of benefits tailored to various consumer needs.

But what exactly does a preferred credit card mean, and how does it differ from other types of cards? Keep reading to learn more about the preferred credit card and how to use it wisely!

What is a Preferred Credit Card?

A Preferred credit card is a premium financial product designed for consumers with robust credit histories.

These cards typically offer superior benefits compared to standard credit cards, such as higher reward rates, exclusive event access, and comprehensive travel protections.

The term “preferred” reflects the issuer’s intention to provide enhanced value to preferred customers, rewarding their creditworthiness and loyalty.

How do Preferred Credit Cards work?

Preferred credit cards function similarly to standard credit cards but come equipped with additional features designed to maximize the cardholder’s spending experience.

Cardholders earn rewards — be it points, miles, or cashback — at accelerated rates, especially in categories like dining, travel, or groceries.

These rewards can be redeemed for various benefits, including statement credits, travel bookings, or merchandise.

Additionally, preferred cards often offer perks such as travel insurance, purchase protection, and exclusive event access, enhancing the card’s overall value proposition for users.

Differences between Preferred, Platinum, and Premium Credit Cards

While Preferred, Platinum, and Premium credit cards cater to consumers seeking enhanced benefits, they differ in focus and offerings.

• Preferred Credit Cards: Targeted at individuals with good to excellent credit, these cards offer elevated rewards and benefits without the high fees associated with Premium cards. They strike a balance between value and cost, making them accessible to a broader audience.
• Platinum Credit Cards: Often associated with higher credit limits and exclusive perks, Platinum cards cater to consumers who prioritize status and are willing to pay higher annual fees for premium services like concierge access and luxury travel benefits.
• Premium Credit Cards: These top-tier cards provide the widest range of benefits, including luxury travel perks, substantial reward rates, and comprehensive insurance coverage. They typically come with high annual fees and are designed for high spenders seeking maximum value.

What to evaluate in a Preferred Credit Card

When considering a preferred credit card, it’s essential to evaluate several factors to ensure it aligns with your financial goals and spending habits:

• Annual Fees: Determine if the card’s benefits justify its annual fee. Some preferred cards offer substantial rewards that can offset the fee, while others may not.
• Reward Structure: Analyze the earning rates in various spending categories. Choose a card that offers higher rewards in areas where you spend the most, such as dining, travel, or groceries.
• Redemption Options: Consider the flexibility and value of the rewards redemption process. Some cards offer more favorable redemption rates for travel, while others may provide better value for cashback.
• Additional Benefits: Look for perks like travel insurance, purchase protection, extended warranties, and exclusive event access, which can add significant value to the card.
• Interest Rates: Even if you plan to pay off the balance in full each month, it’s prudent to be aware of the card’s interest rates in case of unforeseen circumstances.

Notable Preferred Credit Cards on the market

Several preferred credit cards offer attractive benefits tailored to various consumer needs. Below are some notable options:

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card is renowned for its robust travel rewards program.

Cardholders earn 2x and 3x points on travel and dining and 1x point on all other purchases, plus 60,000 bonus points after spending $4,000 in the first three months.

Points are part of the Chase Ultimate Rewards® program, offering flexible redemption options, including travel, cashback, and gift cards.

The card typically features a substantial sign-up bonus and provides travel protections like trip cancellation insurance and primary rental car insurance. It has a $95 annual fee.

Citi® Diamond Preferred® Card

The Citi® Diamond Preferred® Card is ideal for those seeking a low-interest option, especially for balance transfers.

It offers an introductory 0% APR on balance transfers for a specific period and 17.49% – 28.24% APR after that, making it attractive for debt consolidation.

However, it does not focus on rewards, making it more suitable for individuals prioritizing low-interest rates over earning points or cashback. The card typically has no annual fee.

Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express excels in cashback rewards, particularly for everyday spending.

Cardholders earn 6% cashback at U.S. supermarkets (up to $6,000), 6% on select U.S. streaming subscriptions, 3% at U.S. gas stations and transit, and 1% on other purchases.

The card typically includes a welcome offer and provides purchase protection and extended warranty benefits.

It has a $95 annual fee, which can be offset by the card’s high cashback potential.

Ink Business Preferred® Credit Card

Designed for small business owners, the Ink Business Preferred® Credit Card offers substantial rewards on business-related expenses.

Cardholders earn 3x points on the first $150,000 spent on travel and select business categories each account anniversary year, and 1x point on all other purchases.

Points are part of the Chase Ultimate Rewards® program, providing flexible redemption options. The card also offers travel and purchase protections, with a $95 annual fee.

Preferred credit cards offer an attractive mix of rewards and personalized benefits for consumers with strong credit profiles.

By understanding what a preferred credit card entails and evaluating the various options available, you can select a card that aligns with your spending habits and financial goals.

Whether you prioritize travel rewards, cashback, or business expenses, there is likely a preferred credit card that meets your needs.

Looking for suggestions? Read our article explaining how co-branded credit cards work!