Of the many different types of credit card products out there, one of the most interesting is the entertainment credit card. Within this category the primary focus is on accumulating reward points that can be used toward leisure and travel purchases when you use the card to make leisure and travel purchases. Some of these cards can be very similar to more standard credit products, while some can be extremely extravagant and loaded with features and benefits. When considering an entertainment credit card you need to consider the benefits, rates and the lifestyle and goals you already have.
Elite Entertainment Cards
When discussing this type of card it is sometimes helpful to divide this category into two segments. We can look at the two types of entertainment cards in terms of an elite entertainment card and a more normal usage card. The elite entertainment cards are status symbols and primarily target users with income well into the six digit range. These card products require a greater amount of detail during the application process regarding the reporting of purchasing power, revenues, credit history, references, and past card usage. These cards also place a great deal of restriction on the usage of the card.
Typically, these cards are intended for travel and leisure purchases, not daily use purchases like gas or groceries; as a result many of these cards are not accepted universally like daily use cards. In addition, balances are often required to be paid in full within 30 to 60 days, and interest rates on balances carried into the next payment cycle can start at 19 or 20% for the best credit profiles. Finally, there are usually annual fees for membership and if cardholders fail to pay off balances within the proscribed period can incur pretty hefty fees.
At this point you might wonder who would apply for this type of card. Well, as previously stated, these cards are status symbols. Not only does card membership come with a hefty dose of glamour, but unlimited purchasing power, and a boat load of features, services and benefits not available on most cards. This is best suited to the person who already spends a large amount of money on entertainment and luxury items, and who has to means to do so.
Daily Use Entertainment Cards
The second type of entertainment credit card is targeted toward those consumers who regularly make travel and leisure purchases for personal and business purposes that are a little less extravagant that those described in the elite cards segment. While these cards will require better than average credit scores, their application process is usually not as in-depth as the elite card type. Also, these cards are based around rewards programs that offer points toward travel and leisure purchases, gift cards, and even cash back on certain purchases.
These cards do carry high interest rates, but they can be a very a good product for the consumer who travels or makes relevant purchases on a regular basis. Business persons, who regularly commute by plane and rental car, stay in hotels, and buy meals and entertainment for clients would definitely benefit from this card type. Consumers who are spending their retirement years traveling the country or the globe would also be within this products’ target market.
Some card products are co-branded with specific airlines, cruise lines, restaurants, and resorts. These cards will pay double and sometimes triple points or more for patronage of these brands. For regular patrons of these brands and services, or someone with a specific goal of using one of these, then the earning rewards on purchases translates in to a real benefit that would otherwise cost additional cash resources.
Many of these credit cards will offer very attractive introductory offers for balance transfers and cash advances with low or zero interest rates. Be sure to understand the terms of the offer as there are very few, if any, offers that will extend past three to six months before the higher non-promotional interest rate kicks in. When it does, any payments made will be applied to all other purchases with lower rates of interest first, allowing interest to build really fast.
In fact, those consumers who would benefit most from this type of card are those who are not only going to make these types of purchases anyway, but are also able to pay off the balance on the card within a single billing cycle. This will allow their purchases to accumulate rewards benefits without having to pay the above average interest rates. Like other cards, it is important to evaluate the interest rate, reward benefits, annual fee, fee schedule, and usage restrictions for any card you might be considering. But, with a card type like this, it becomes even more important to justify these card characteristics with your lifestyle and credit usage behavior. If a card within the entertainment credit card category can satisfy your credit needs, your life will likely be smooth sailing.
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