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Bruce McClary Vice President of Communications at the National Foundation View bio

This guide was written by

Jeff Ostrowski

If you’ve built a stellar credit score, congratulations. Credit card companies want your business, and you can scarcely turn on a television or peruse the Internet without seeing a celebrity pitching a card. The competition among credit card companies is fierce. As lenders vie for your business, they’re willing to offer up all sorts of incentives in order to get their plastic in your wallet, including cash back, airline miles and points programs. It’s nice to be
wanted, isn’t it? You’ve taken care of your money. Now take the time to find a card that will help
you take advantage of your position.

What Can Good Credit Get You?

Manage your money responsibly, and credit card issuers will reward you handsomely.
With good or excellent credit, you’re eligible for lower interest rates, plus a lot more.

More generous rewards

Consumers with good credit can pocket a variety of rewards not available to less reliable borrowers. Cash-back cards offer 1 percent, 2 percent, even 5 percent back, according to myFICO.com. Airline miles cards offer as many as three miles per dollar spent. These reward cards aren’t available to borrowers with poor credit.

0 APR offers

Many of the cards for consumers with good credit include zero interest for periods as long as 15 months. These offers come with caveats, warns Bruce McClary, vice president of communications at the National Foundation for Credit Counseling. If you carry a balance, make sure you know exactly when the promotional period ends. If not, you could be hit with a hefty interest charge.

Better introductory offers

Credit card issuers are competing for low-risk borrowers, and they offer all sorts of promotions to get your business, including bonus points and sweetened cash-back rewards. Airline cards offer up to 50,000 miles to sign up, myFICO.com says. Cash-back cards offer extra cash.

Lower interest rates

If you carry a balance, you’ll pay less if you have good credit. Borrowers with excellent credit are charged rates that range from about 12 percent to around 23 percent. For borrowers with poor credit, rates range from 16 percent to 24 percent, but are likely to hover on the higher side.

The Best Credit Cards for Excellent Credit

The credit card world is your oyster if you have good credit, so take advantage. Which perks you sign up for will depend on your individual needs. For instance, if you’re a road warrior who travels constantly for work and pleasure, a travel card is a wise move. If you’re a homebody who likes simplicity, a cash-back card might be smarter. And if you’re renovating a house or otherwise running up short-term debt, maybe a zero-interest card is right for you.

Cash-Back Credit Cards

Cash-back deals typically offer 1 to 2 percent back, with 5 percent offered in certain categories or during promotional periods.

Travel Credit Cards

Travel credit cards offer airline miles or hotel points. If you’re loyal to an airline or a hotel brand, one of these cards makes sense.

Zero-Interest Credit Cards

Many reward cards come with zero-interest promotional periods ranging from nine months to 15 months.

How Do I Know if I have Good Credit?

There are two scoring systems that rank your credit: FICO (the most commonly used) and the VantageScore.

FICO scores grade consumers on a scale of 300 to 850. The higher your score, the more desirable you are to credit card issuers. In general, a mark of 700 or higher will qualify you for the most enviable credit card deals.

The breakdown of points varies a bit depending on the type of loan — mortgages and car loans have slightly different scales than that for credit cards. According to the myFICO site, there are 34 rewards cards available to consumers with good or excellent credit, but only five options for those with poor or bad credit.

The VantageScore is a competing measure that also uses a scale of 300 to 850, or “deficient” to “excellent.” FICO scores and VantageScores use slightly different formulas to arrive at their conclusions, but in both cases, payment history is the most important variable. The models reward you for paying promptly and punish your score for paying late. For more information, see MoneyGeek’s guide to raising your credit score and MoneyGeek’s guide to getting your credit score for free.

Ten Signs You Have Excellent Credit

Even if you don’t routinely monitor your credit score, there are some simple ways to estimate the number. If all 10 of these characteristics apply to you, congrats — your score probably is approaching an “excellent” or “exceptional” rating.

  • 1

    You pay your bills on time. Prompt payment is a crucial factor in determining your credit score, according to the Federal Deposit Insurance Corp. Consumers with high credit scores almost never receive late-payment notices.

  • 2

    You pay your bills automatically. Even the most responsible consumer can forget to make a payment. If you set up automatic withdrawals for your mortgage, auto loan and credit card payments, you’ll remove human error from the credit score equation.

  • 3

    Your lender is happy to hear from you. If you have a strong track record of on-time payments and you happen to miss a due date, your lender is likely to reverse the late fees. But if you have a low credit score, such lenience is unlikely.

  • 4

    You have an emergency savings account. For consumers who live paycheck to paycheck, an unexpected car repair or medical bill can create a cascade of missed payments. Those who have a comfortable cash stash — enough to cover six months of living expenses — navigate emergency expenses without veering into financial disaster.

  • 5

    You’ve never had a foreclosure or a bankruptcy. These events will devastate your credit score for years. The good news if you have had one? With discipline and focus, you can repair your credit score over time.

  • 6

    Your mailbox overflows with credit card offers. Lenders know exactly what kind of risk you pose: a very low one. So if they load your mailbox with offers for cards with rewards such as cash back, generous frequent flyer bonuses or zero-interest periods, chances are you boast a stellar credit score.

  • 7

    You live within your means. Maxing out your credit cards will hurt your credit score, the FDIC says. If, on the other hand, you charge just a fraction of your credit limit each month and then pay off the balance, you’ll be rewarded with a higher credit score.

  • 8

    You haven’t been rejected by an employer, a landlord or an insurer. Credit scores aren’t just for borrowing anymore. They’re increasingly used by employers vetting job applicants, by landlords scrutinizing tenants and by insurance carriers deciding whose risk to take on.

  • 9

    You get your score from your credit card company. Many card issuers have begun providing credit scores for free to customers. One caveat: Credit scores come in many flavors, and the number provided by your credit card company might not be precisely the same score another lender considers.

  • 10

    You’ve had the same credit card for years. Credit scoring models reward consumers for long relationships with lenders.

Expert Q&A: Best Credit Card Practices When You Have Good Credit

expert Bruce McClary Expert

Bruce McClary is vice president of communications at the National Foundation for Credit Counseling in Washington, D.C. He has nearly two decades of experience and has provided one-on-one counseling to thousands of consumers.

There are so many cards to choose from — cash-back cards, airline cards, hotel cards, cards sponsored by automakers. How many cards should I have?

Three credit cards would be the absolute most. You don’t want to get too carried away in applying for these reward cards. If you start opening too many accounts, you run the risk of creating unmanageable credit card debt. That can create a domino effect where you start missing other payments. The choices are almost dizzying. Instead of looking for different cards that have different features, look for one or two cards that have an array of the benefits you want. Because of the variety of cards that are available to consumers, you can have your cake and eat it, too. But be sure to pay off balances as quickly as possible.

Some reward cards charge annual fees. How can I tell if I have a good deal?

You have to do the math. Are the benefits that you realistically expect to redeem greater than the fee? You have to be strategic. The best reward card is going to be the one where you have the easiest access to the rewards. There’s no point in spending money to chase points you don’t use.

Reward cards target consumers with good credit, but are there any hidden traps?

You could be distracted by the shiny objects and lose track of how the fees and the interest rate might be hurting you. It’s easy to overspend just to chase the spending benchmarks so that you can get that reward. The devil is in the details with these credit card user agreements. If there’s a promotional rate, be sure you’re very clear about what is long-term and what is introductory. Overall, though, these cards can be a very good deal, especially if you’re not changing your spending habits to collect the rewards. People always wonder, “Why should I care about my credit score?” Reward cards show there is a pot of gold at the end of the rainbow. It is a very good incentive for people who might be trying to improve their credit.