Gold card rip off, claims Virgin Money

Gold credit cards are marketed to ooze a sense of status to the cardholder, just as a four carat diamond ring, the latest Louis Vuitton handbag, a luxury sedan or designer labels jeans would. It’s perceived as a strong selling point that has many of us longing to belong to the ‘gold club’ where benefits are reserved for the privilege few.

Banks use phrases like “…your hard work has paid off and we recognise this by providing you with all the benefits of having a gold credit card…” and “…carrying superior benefits that your financial standing demands…” or “…full credit facilities for the status you’ve earned…”, and by doing so have created the perception that ‘coloured’ credit cards are a fashionable status symbol.

Yet the research shows that there were no real differences between a gold card and an entry-level, run-of-the-mill credit card. The estimated two million of us who have fallen for the marketing hype of our banks and have a gold credit card in our purses, are collectively handing over R104 million every year, topping up our banks already considerable profits.

According to Virgin Money, the average annual fee for an entry-level credit card is R137.28, and for a gold credit card is R189.44. This is a R52.16 difference and, with an estimated two million gold credit cards in circulation in South Africa, equates to over R104 million of a ‘gold card rip-off’.

“At the end of the day, they’re still made of plastic and the ‘benefits’ of owning these multi-coloured cards don’t seem to glitter as brightly as their cards do. And, trust us, putting a gold coat of paint on your credit card doesn’t cost the banks R52.16 more than blue or silver,” says Gavin Muller, credit product director at Virgin Money.