Premium Credit Card Market Report

The ultra-high-net-worth individuals have distinct and complex banking needs that require specialized services beyond those offered to the general public. To meet these demands, financial institutions in partnerships are introducing premium credit cards, a high-end offering designed to cater specifically to this exclusive segment that aims to redefine luxury banking and elevate the consumer experience. For instance, in August 2024, Axis Bank announced a partnership with Visa to unveil an ultra-luxury credit card, Primus, designed to appeal to India's wealthy elite and their distinct tastes for style, exclusivity, and access, offering customers access to globally acclaimed under visa infinite privilege, reflecting a growing trend among banks to target the luxury market, addressing the specific needs of those who demand personalized, elite-level service and experiences that align with their status and wealth.

Additionally, to meet the growing demand for more flexible and rewarding loyalty programs through everyday transactions resulting in the introduction of rewards programs by market players allowing cardholders to accumulate more miles with each transaction and access to exclusive lifestyle experiences around the world in booking flights, dining at premium restaurants, enhancing cardholders to have access to exclusive lifestyle aligning with more personalized and high-end rewards.  For instance, in October 2024, Emirates Skywards partnered with HSBC Bank Middle East to launch new cobranded credit cards in the UAE. Available in two versions including the Signature and the Infinite the HSBC Emirates Skywards Credit Cards, allow cardholders to accumulate more miles with each transaction and offer features like earned Skywards Miles through HSBC Credit Cards will never expire for their lifetime, ensuring that cardholders can continue to accumulate and use their miles without the pressure of expiration.

One of the challenging factors of the premium credit card market is that the Premium credit cards have hefty annual fees, which can make many customers feel disproportionate, especially if they don't take full advantage of the benefits or spend enough to justify the expense. Furthermore, security concerns about fraudulent activities can stymie market growth because credit card payments frequently face severe security concerns, resulting in data breaches and illegal access to cardholder sensitive information, as well as an increase in the number of payment scams on e-commerce sites. However, the reward programs associated with premium cards can sometimes be complex and difficult to navigate, such as understanding how to maximize points, or cashback in specific categories can be confusing, some cards may offer bonus rewards only for specific types of spending (e.g., travel, dining) or within limited time frames, making it challenging to take full advantage of the program.

Additionally, the premium cards offer attractive rewards but their interest rates can be quite high, often in the 15-25% range as well as if a cardholder carries a balance from month to month, the interest charges could quickly outweigh the value of the rewards earned. Moreover, in many cases, the purchased product is either not received or cannot be tracked by the customer, which is likely to limit the expansion of the global credit card payments market. Furthermore, premium credit cards often come with high limits and substantial reward incentives resulting in the cardholders being tempted to overspend to earn more miles or reward points, leading to debt accumulation, particularly if the cardholder is unable to pay off the balance in full each month.

Increasing consumer demands to benefit from travel protections, including insurance coverage for lost luggage, trip cancellations, and medical emergencies, which is often included in premium cards to results in the increasing partnering of market players with a well-established brand like Mastercard, banks gain a competitive edge, differentiating themselves in a crowded market, enables them to attract high-net-worth customers. For instance, in October 2024, ICICI bank announced partnering with MakeMyTrip to introduce a new premium co-branded credit card designed for travelers featured with cash reward rewards on traveling and retail spending, dual card offerings, and annul fees and welcome offers. This card also comes with the convenience of two cards powered by Mastercard and RuPay. Furthermore, this credit card can be linked with UPI.

Additionally, people are increasingly looking for high-quality, value-driven financial products that offer an extensive range of rewards experiences and drive personal growth with world-class features and benefits, led market players to introduce new premium credit cards in collaborations to bring the best value to customers in all the markets and have world-class features and benefits. For instance, in November 2022, Bank One in partnership with Mastercard announced to introduction of new premium master cards, aimed at curating incomparable experiences for discerning consumers, by making transactions safe, seamless, and rewarding, including points or cashback, travel privileges, and access to luxury experiences, which add value to the customer, driving loyalty and engagement.

North America, notably the United States and Canada, is one of the most developed and dominating markets for premium credit card driven by affluent consumers demand, valuing premium experiences, travel benefits, and exclusive rewards. Additionally, the region’s high disposable income and strong travel culture for business and leisure expands the premium credit card market. As well as the security features, such as advanced fraud protection and contactless payments, also act as a selling point among consumers, prioritizing safety and convenience. Furthermore, partnerships with prestigious global brands, like Mastercard and Visa help to deliver unique benefits such as VIP access to events and airport lounges is a growing demand for premium cards.

The premium credit card market in Europe is also robust, with leading players like HSBC, American Express, and Barclays offering tailored products to meet the needs of high-net-worth individuals characterized by a mix of traditional banking institutions and new-age fintech companies that focus on luxury and lifestyle services, especially in metropolitan hubs like London, Paris, and Frankfurt. European consumers preferences for personalization concierge services, tailored benefits, and partnerships with cultural institutions to enhance the consumer experience.  A key feature of premium cards in Europe is their ability to provide cross-border benefits, such as multi-currency rewards, travel insurance, and exclusive partnerships with European luxury brands.

The Asia-Pacific‘s premium credit card market is gaining traction driven by increasing affluent consumers seeking high-value rewards and exclusive offers and an appetite for luxury goods, international travel, and unique experiences in countries like China, Japan, India, and Singapore. Additionally, regional partnerships between credit card issuers and local luxury brands add significant value to premium offerings creating a market that balances global and local preferences influenced by the rapid adoption of digital payment technologies and contactless cards becoming more prevalent that cater to local tastes, such as dining, retail, and entertainment benefits.

The premium credit card market in Latin America is still in a developing phase and is seeing strong growth, particularly in countries like Brazil, Mexico, and Argentina due to growing disposable income rising affluent consumers, and increasing focus on exclusive rewards tied to travel, dining, and entertainment, with features like concierge services, VIP event access, and significant travel-related benefits being key differentiators. However, credit users are lower than in developed markets although due to the growth of the affluent class, particularly in urban areas is contributing to an expanding market. Security and fraud protection are one of the major priorities, as many consumers are concerned about safety in financial transactions, especially with the rise of e-commerce.

The Middle East and Africa‘s premium credit card market is expanding rapidly, especially in the Gulf Cooperation Council countries like the UAE, Saudi Arabia, and Qatar, which boast large populations of wealthy consumers characterized by high levels of disposable income, and there is a growing appetite for exclusive financial products. Additionally, the region’s growing interest in digital payments and mobile wallets is influencing the premium card market, as many issuers are incorporating advanced features like contactless payment systems and mobile payment integrations.