What can you expect from a credit card for excellent credit?
Here’s what to expect from a credit card for excellent credit:
Award earned: One in all cards for excellent credit in the survey earn at least 1.5 points per dollar or 1.5% cash back on purchases in bonus categories.
Sign-up bonus value: You can earn a sign-up bonus of at least $ 50 on a 64% card for excellent credit. More than a quarter of surveyed cards offer sign-up bonuses worth more than $ 500.
Annual Fee: You will not pay any annual fee with a 45% card for excellent credit. About 27% of the card’s annual fee for outstanding credit is over $ 100.
April: Most credit cards have a minimum APR of between 15% and 18.99% for outstanding credit.
Benefit: Nearly all cards have valuable benefits for excellent credit, with most travel accident insurance, travel credit, priority boarding, free check bags, hotel status, and other valuable cardholder allowances.
What is excellent credit?
With excellent credit, your score falls at the top level of the credit score. The two main credit scoring models are FICO and VantageScore.
On the FICO scale of 300 to 850, the score ranges are:
Extraordinary: 800 to 850
Very good: Rs 740 to Rs 799
Good: 670 to 739
Fair: 580 to 669
Very poor: 579 and below
With an exceptional FICO credit score, your credit rating is well above the national average, which is around 700. About 20% of consumers in the US have an exceptional credit score. Lenders are more willing to extend the loan to borrowers at this level as about 1% of consumers with credit scores of 800 or more are likely to be criminals.
Using the VantageScore 3.0 model, the score ranges are:
Excellent: 750 to 850
Good: Rs 700 to 749
Fair: 650 to 699
Poor: 550 to 649
Very poor: 300 to 549
An excellent VantageScore means that you are in the top 30% of the credit score. With a credit score like this, you are most likely to get the best rates and terms on a credit card.
How can you get excellent credit?
The ceiling on both scales, excellent credit may be inaccessible or mysterious to some consumers. But the path to outstanding credit is neither secret nor easy. Generally, having excellent credit means that you have maintained a full-time payment history for an extended period of time, keeping balances and new credit accounts at a manageable level.
Your credit score is determined by these five factors:
- Payment History
- Income is due
- Credit history length
- Credit mix
- New credit
Payment history is the most important factor that affects your credit score with FICO and VantageScore. This means that if you expect excellent credit, you should pay all your bills on time, every time. But getting excellent credit also means that you must demonstrate an exceptionally low credit risk, and paying your bills on time will not make you go there.
Lenders are looking at how much credit you use and how much credit is available to you. Generally, they do not want to see you use more than 30% of your available credit on any card.
It states that you are not in the habit of maximizing credit cards, while you are unable to pay your bills. But if you have a lot of available credit, it can also be a risk because you can create a larger balance than a consumer with a lower credit limit.
The length of your credit history is a particularly important factor for obtaining excellent credit. Paying your bills on time for a few months indicates commitment, but staying on top of payments for years tells lenders that they don’t have to worry about missed payments from you in the future.
A long credit history provides lenders with more payment data to determine your risk. If your credit history is short, you may need more time to obtain an excellent credit score.
While this is not a significant factor in earning an excellent FICO score, your mix of credit products may have an impact. If you can display a successful payment history on various accounts such as credit card, loan or mortgage, you may see a bump in your score.
New credit, which includes hard credit inquiries and new accounts, is another small factor that is helpful but not important. When you open several new credit cards in short order, this indicates an increase in credit risk. If you are working towards excellent credit, then it is probably a good idea to slow down credit card applications and other credit inquiries.
What are the pros and cons of excellent credit?
The benefit of having excellent credit is obvious: you are more likely to be approved for credit products and may qualify for the best terms.
“If you have excellent credit, you usually have your credit cards,” says Gerry Detweiler, director of education for Nav, who helps business owners build credit. “This will possibly open the door to the best interest rates and the most lucrative rewards.”
Perhaps unsurprisingly, even consumers with excellent credit present risk. With excellent credit, you can get access to exceptionally large credit lines – larger than you could ever need. Although a major credit line provides large purchasing power, it can be an obligation if you have a lapse in judgment and can go on a spending spree that you cannot afford, or if an authorized user runs a fee .
Consumers with excellent credit are also more to lose from credit mistakes. According to a FICO analysis, A near-outstanding FICO credit score of 780 can drop from 90 to 110 points due to a 30-day late overdue payment. But a good credit score of 680 can expect a small drop of 60 to 80 points from the same type of delimitation.
What can you get from the card for excellent credit?
Cards typically provide valuable rewards and cardholder benefits for excellent credit. And with excellent credit, you may be able to qualify for the minimum APR credit card offer.
Chelsea Hudson, senior public relations officer and personal finance specialist, says in the website TopCashback.com, “opens the door to better credit card options, from better introductory offers to exclusive perks”.
Here is an idea of what kind of rewards and benefits you can expect when there is excellent credit.
Valuable Award: Typically, cards for excellent credit earn at least two points per dollar on select bonus categories. Some earn more, such as cards that receive 5 percent cash on quarterly rotation bonus categories. Most offer flexible redemption options, which may include receiving cash back, transferring pointers or airline miles to traveling partners, or taking cash in rewards with several options, such as free with a hotel group Living in which there are different brands.
Great sign-up bonuses are also common among cards for excellent credit. Many offer sign-up bonuses cost at least $ 150. Some are worth more than $ 500.
Cardholder Allowances: Although rewards can be valuable, there are cardholder benefits that set a separate card for truly outstanding credit. Benefits are almost always available with these cards. Cards at this level can offer top-tier benefits, including travel-credits, free hotel stays or flights, free baggage privileges, priority boarding, elite hotel status, and airport lounge access.
Many cards offer travel protection for excellent credit, such as trip cancellation or interruption insurance, or auto rental collision insurance. These benefits can help you save money on travel and make your trip more enjoyable. Other card benefits often include extended warranty coverage and purchase protection.
Rate of interest: Consumers with excellent credit can generally expect to qualify for some of the lowest rates available on credit products, and credit cards are no exception. The card often has a minimum amount of 18% or less for outstanding credit. Some have APRs of 13.99% or less. And cards can offer 0% introductory APRs, often available for 12 to 18 months.
High Credit Limit: You may also get more access to credits with excellent scores, as some cards offer higher limits at this level. A higher credit limit can come in handy, whether you plan to make a big purchase, transfer a balance or withdraw a card for emergencies.
Higher-limit cards offer flexibility, allowing you the space to pay larger balances that lower-limit cards account for in your available credit and will likely drop your credit score.
“Higher loan limits will make it easier for you to transfer balance from more expensive cards without getting close to your credit limit when you need to consolidate debt,” Detweiler says.
How can you qualify for a card for excellent credit?
Excellent credit can open many doors and save you money. But having excellent credit does not mean that you will be approved for every credit card available. Credit card issuers consider more than your credit score, and other factors may prevent you from being approved for the card.
“Having an excellent credit score is no guarantee that you will be approved for a new line of credit,” Hudson says. Your income, for example, plays a big role when determining whether you qualify for a card. Other factors that may cause you to decline are if you have too many credit cards, too much debt or even if your credit report has not been updated with the most recent information. “
If you have excellent credit and you are unexpectedly denied a card, consider factors beyond your credit score. What is your income? How does your debt level compare with your income? How many credit cards have you opened recently?
You can work to improve those factors before applying for a second credit card. When shopping with a credit card, see if the issuer offers prequalification, which will tell you if your credit score is likely to have any effect.
Do you have a card for excellent credit rights?
Cards usually provide the best features for excellent credit. But your credit needs may not align with the top-level card. Attractive rewards and benefits are common among cards for excellent credit, but choosing a credit card, such as getting the lowest APR or avoiding the annual fee, may be a different priority for you.
Although cards designed for excellent credit may offer a low APR, no annual fee, and other valuable features, this does not mean that you will have to get one. Depending on your needs, a card for good credit may be a better option, so consider all the credit cards available to you.
“Even if you have a lot of options, it’s still important for you to carefully evaluate each offer to find the best card for you,” Hudson says.