It's in the cards: which is the best plastic fantastic

As credit card spending rages on - and looks set to top $2.3 billion this month - the verdict is in on the country's premium plastics.

CardWatch (a division of investment researchers FundSource) has ranked the 30 top-shelf cards on offer. The top rating of five stars goes to ASB Visa Gold, Gold Thoroughbred Card Visa, ASB MasterCard Gold, Gold Thoroughbred Card MasterCard and GlobalPlus Gold American Express.

Languishing on just one star are American Express Gold Charge Card, ANZ Visa Gold, ANZ MasterCard Gold and Qantas ANZ Visa Gold.

Because gold and platinum cardholders generally spend more and are more likely to go overseas, the rankings are based on the cards' rewards programmes and, in particular, the travel insurance offered by the various issuers.

"Rewards programmes are not created equal so much of the rating reflects this," CardWatch general manager Tim Anderson said.

He said many offered other benefits too, such as concert tickets, special functions and club privileges but these did not provide quantifiable value to the holder.

He stressed the importance of the cardholder's understanding of the difference between the two different types of insurance offered by credit card issuers.

American Express and Qantas ANZ cards offer only travel accident insurance, if any, which provides no cover for medical expenses, lost luggage or assistance in an emergency.

The others offer comprehensive insurance that covers a wide range of unforeseen circumstances ranging from illness to kidnapping.

CardWatch's verdict is that those able to should upgrade to a premium card. The annual fees are higher than normal credit cards, but the comprehensive travel insurance offered makes up for that, even if just one overseas trip is made a year. Most premium cards have an interest rate of 19.95 per cent but they do go as low as 16.95 per cent. The average card's is at 18.7 per cent. Fees range from $70 to $325 with most under $100.

CardWatch research forecasts December credit card spending to jump to $2.3 billion - 32 per cent more than the monthly average for the rest of the year and up on last December's spend of $2.1 billion. The estimate is based on last year's spending levels and the monthly increases so far this year.

New Zealanders are expected to break through $4 billion in outstanding credit card debt by the end of the year. "Credit cards remain an effective payment method as long they are paid off and don't incur interest charges," Anderson said. Full results are at the CardWatch website.