Credit Card Privileges are usually automatic, unlike rewards programs where points need to accrued and then redeemed. Privileges are commonly associated with Gold and Platinum Credit Cards.
Privilege credit cards work in a similar way to loyalty cards. Many credit cards now offer privilege programs in return for getting some publicity and access to a reasonably well off clientele of card holders a number of providers of services allow for extras such as free upgrades to the card users. These may involve perks like the ability to get a free upgrade in a hotel, an upgrade to a better seat in a concert or going up a class on a flight. Sometimes these are advertised as automatic privilege programs or instant rewards, not to be confused with instant approval credit cards which do not necessarily offer privilege programs. They may or may not. The instant in instant approval credit cards refers to the time taken to give a response to the application.
The free upgrades are very rarely paid for by the credit card provider if the card provider is a bank. These free upgrades are quite common for card providers such as stores and airlines.The way in which these cards work is that the goods or service is paid for with the card and then there is an upgrade. So if a traveller were to book a standard class ticket on a flight with the right credit card then they would be upgraded to business class. In this way an airline can instil brand loyalty, advertise to a prosperous group of potential customers and fill up unused spaces.
These are usually limited in that the benefits are only available at certain times when airlines tend to be less likely to be used. In the same way hotel rooms will often only be available for upgrades in off peak times and concerts when the ticket sales are lower. This means that most of these upgrades are only available when there is a relatively low demand and so therefore some unused capacity.
Instant discounts are another feature of many of these credit cards. This is when a card is used to buy some goods and by simply using the credit card card holder becomes entitled to a discount. This is offered for the same reason as there are instant upgrades offered, in that it builds brand awareness and brand loyalty.
The instant rewards programs are being offered by a number of banks, building societies and credit unions with their credit cards due to their increasing popularity and the liklihood of partnerships between banks and retailers.
[TABLE=7]
