For the Best Credit Cards, You Need Good Credit

For years, many expect that credit cards will provide easy access to credit.

This is because it is often easier to get a credit card than it is to qualify for a personal loan or some other type of loan.

Even with lending standards tightened since the 2008 financial crisis, credit cards are still considered some of the easiest sources of borrowed money.

However, even though you can get a credit card with less than perfect credit, it’s important to note that your credit history still matters.

If you want access to the best credit cards, you need a good credit score.

Low Interest Rate


Credit cards offer a variety of interest rates.

You often start with a base interest rate that varies according to the market.  Someone with good credit might start with an interest rate of 9.99% or 11.99% — generally considered low rates.  This can mean big savings for those that carry balances.

Someone with poor credit, though, might pay 21.99%, or even 29.99%.  And, indeed, if you miss a payment or go over your limit, you might be boosted to a higher interest rate.

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When you have good credit, you are rewarded with a lower interest rate.

This includes introductory interest rates.

Someone with good credit is often eligible for a credit card with a 0% intro rate that applies for up to 21 months.  The better your credit, the lower your intro rate, and the longer it lasts.

Someone with poor credit, by contrast, might end up with a 3.99% intro rate that is only good for six months.

Rewards Program

A large number of rewards credit cards are aimed at those with good credit.

If you have poor credit, you might be denied when you try to apply for a rewards credit card.  You won’t be able to earn free stuff and cash back unless you have good credit.

One of the main exceptions to this, though, is the student rewards credit card.

These credit cards are aimed at college students with limited credit histories.  The rewards aren’t as generous as those offered by high-quality rewards cards aimed at those with good credit, but they are still available.  If you are trying to build your credit, and you haven’t made credit mistakes, a student rewards card can be a decent choice — although you will likely be required to pay a higher interest fee.

Be aware, though, that students are subject to tighter restrictions.  If you are under 21, you have to be able to show that you can make payments (you need to have proof of income from a job), or have someone co-sign for you.

Improving Your Credit

If you can’t qualify for the best credit cards, it’s important to work toward building your credit history.

This can be done with any credit card that you qualify for.  Use the credit card to make a few small purchases each month.  Then, pay off the balance each month — and make sure you pay on time.

You should also make sure that you make your other bill payments on time.

If you can build up a good credit history, paying on time and reducing your debt, you should be able to build a credit history that is good enough to help you upgrade to a better credit card.

Finally

Credit cards can offer up some great benefits.  But only those people with great credit will have access to those benefits.  Simple things like making sure you always pay on time can help you improve your credit score.  Make sure your credit is strong and you will be enjoying some nice credit card perks.

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Published or updated June 14, 2012.

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