Glossary Terms

Annual Percentage Rate
The cost of credit, including the interest and fees, expressed as an interest rate. APR was created to make it easier for consumers to compare loans... <a href='/glossary/what-is-annual-percentage-rate' title='See the full definition of Annual Percentage Rate'>read more</a>
Credit Ratio
A credit ratio is expressed as a percentage and results when a borrower's monthly payment obligation on long-term debts is divided by his or her net... <a href='/glossary/what-is-credit-ratio' title='See the full definition of Credit Ratio'>read more</a>
Line of Credit
A line of credit is a revolving (re-usable) credit account that allows account-holders to borrow money and repay it any time during the term of the... <a href='/glossary/what-is-line-of-credit' title='See the full definition of Line of Credit'>read more</a>
Revolving Debt
Open-ended accounts, usually with variable interest rates, pre-determined credit limits and payments that are calculated as a percentage of the unpaid... <a href='/glossary/what-is-revolving-debt' title='See the full definition of Revolving Debt'>read more</a>

The range of credit cards for people with excellent credit is enormous. Those with FICO scores in the 720-850 range stand a high chance of being approved for virtually all the plastic on LendingTree's top credit card listings. There are a couple of exceptions at the time of writing, companies that prefer scores of around 740, but anyone with 720 should be able to quickly make it rise by 20 points with a little careful management. And, of course, consumers with great credit can apply for any credit card -- including those designed for those with lesser scores. They really can -- in the words of a million amateur magicians, and with the exception of just one or two invitation-only products -- "Pick a card... any card." But, with such a choice, what should they look for when making a selection?

Rewards Cards

Free stuff! Who doesn't want that? The best rewards tend to be offered to the most creditworthy consumers, so those with excellent scores should be able to find generous cards. There are two people should remember when choosing:

  1. The alignment of the rewards with lifestyles. That applies to earning rewards as well as redeeming them. People need cards that make it easy to accumulate miles, points or cash back, and also allow them to "spend" them on things they really want.
  2. Some cards offer five percent cash back on shopping categories that change each quarter, and one percent on all other purchases. These can be great, but to get the best from them, users must re-register each quarter, observe spending caps, and schedule purchases to take advantage of that five percent. Those who are too busy -- or just can't be bothered -- to jump through those hoops may be better off with cards that offer more modest earnings rates but require no rewards management.

Low-Interest Cards

Many people with great credit are likely to zero their card balances every month. But others won't. To keep a score high, it's important that the amount of debt on one's plastic remains below 30 percent of the available credit.

"Revolving" (rolling forward) balances isn't a problem in itself. However, paying high interest rates is. And this is where those with 720+ FICO scores... well, score. Many cards have a range of rates (10.99 percent – 22.99 percent is one example), and the amount an individual pays is determined by his or her creditworthiness. It's also possible to find products that are designed for those with high scores, which offer a single rate, sometimes well below the 10-percent level.

As a rule, rewards cards charge higher rates than non-rewards ones. So it can be smart to charge to rewards products those purchases that are going to be paid for at the end of the billing cycle, and to use a low-interest one for those that are going to take a while to pay down.

Plenty of Perks

Credit card companies love people with great credit, and work hard to lure them with perks. Here are some to look out for:

  1. Sign-up bonuses. These give new customers a few thousand miles or a hundred bucks or so just for having their applications approved. There's usually a minimum spending threshold that has to be met within a set period, often three months from the opening of the account.
  2. Consumer protections. All credit cards come with superior protections against fraud liability. But some offer extended warranties, and purchase, price or returns protection.
  3. Low costs. Most cards for the highly creditworthy come without annual fees. Companies that do charge them almost invariably offer something valuable in return, such as airport privileges. But some waive pretty much all fees, including many penalties. Those who travel abroad a lot can often find cards that don't charge foreign transaction fees.
  4. Zero-percent APRs. These can apply to balance transfer deals, and sometimes to new purchases. Of course, these are introductory rates and normal interest charges kick in when the offer ends, often after between 12 and 18 months.

Attaining high credit scores usually takes real effort. Those who achieve them deserve the benefits that only credit cards for people with excellent credit give them.

Frequently Asked Questions