What makes a credit card "prime" and should I care?

[Wolf3]

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@CreditScholar wrote:

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@Razeus wrote:

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@Wolf3 wrote:

IMO,  American Express is no longer Prime.

If you have to go through FR, frozen or closed accounts whenever there is a hiccup on your CR.   It is not reliable, hence not prime.

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You're crazy.  They are just protecting themselves, and that's why they have the lowerst default rates.  Show me another issuer who will give you NPSL on a member who doesn't have any history with them and just applied 60 seconds ago?  There's no absurd fees associated with AMEX, and they certainly don't try to hide it.

AMEX is the very definiation of prime.

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I'm not sure if I agree with the statement that Amex is the very definition of prime. It used to occupy that space, but it can't claim any kind of monopoly on that title anymore. I don't see the Zync as a "real Amex", but instead as a stepping stone similar to how one plays in the minors before being called up into the majors. It still carries the same name (Amex or baseball), but has a very different purpose compared to say an Amex SPG or platinum.

There was an excellent discussion about this several months ago, about whether or not Amex is in decline. I (along with some others) think it is, and the quality of their credit portfolio has been on the slide for the past decade or two.The fact that they even have to offer a product such as the Zync paints a very clear picture about their position, and the picture it paints isn't good.

The Zync was created as a self-preservation tool, primarily to link in with GenY spenders who were coming of age. Amex needed to introduce this since according to Open123 (and I agree), much of GenX had been lost to Visa/MC. Without a newer source of revenue, and with Amex's old guard getting long in the tooth, Amex is fighting an uphill battle. Once their older, high-spending traditional clients have passed on, they will have a huge revenue hole that will need to be filled. This is especially problematic since GenY will likely never have the spending power that the baby boomers had, and will probably be the first generation in modern times to have a lower standard of living compared to the generation that preceeded it.

Of the current Zync holders, I'd venture less than 20% will come even close to the old guard's earning and spending power. In the meantime they can use the Zync to sift through the masses to determine who that 20% is, and in the meantime collect transaction and annual fees from the other 80%.

There are some Amex products that are still very-prime, but the Zync isn't one of them. There's a huge difference between Amex creating a product that it intends to market to prime and super-prime customers, and a product that they created primarily as a sifting tool and survival mechanism. When someone does something because they won't survive otherwise, it doesn't carry the genuineness of the same action when undertaken by one's own free will. This is why I can't see the Zync in the same light as Amex's more traditional products.

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An excellent post.   In other words.  This isn't your Grandfathers credit card anymore.

[Revelate]

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@Wolf3 wrote:

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@CreditScholar wrote:

I'm not sure if I agree with the statement that Amex is the very definition of prime. It used to occupy that space, but it can't claim any kind of monopoly on that title anymore. I don't see the Zync as a "real Amex", but instead as a stepping stone similar to how one plays in the minors before being called up into the majors. It still carries the same name (Amex or baseball), but has a very different purpose compared to say an Amex SPG or platinum.

There was an excellent discussion about this several months ago, about whether or not Amex is in decline. I (along with some others) think it is, and the quality of their credit portfolio has been on the slide for the past decade or two.The fact that they even have to offer a product such as the Zync paints a very clear picture about their position, and the picture it paints isn't good.

The Zync was created as a self-preservation tool, primarily to link in with GenY spenders who were coming of age. Amex needed to introduce this since according to Open123 (and I agree), much of GenX had been lost to Visa/MC. Without a newer source of revenue, and with Amex's old guard getting long in the tooth, Amex is fighting an uphill battle. Once their older, high-spending traditional clients have passed on, they will have a huge revenue hole that will need to be filled. This is especially problematic since GenY will likely never have the spending power that the baby boomers had, and will probably be the first generation in modern times to have a lower standard of living compared to the generation that preceeded it.

Of the current Zync holders, I'd venture less than 20% will come even close to the old guard's earning and spending power. In the meantime they can use the Zync to sift through the masses to determine who that 20% is, and in the meantime collect transaction and annual fees from the other 80%.

There are some Amex products that are still very-prime, but the Zync isn't one of them. There's a huge difference between Amex creating a product that it intends to market to prime and super-prime customers, and a product that they created primarily as a sifting tool and survival mechanism. When someone does something because they won't survive otherwise, it doesn't carry the genuineness of the same action when undertaken by one's own free will. This is why I can't see the Zync in the same light as Amex's more traditional products.

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An excellent post.   In other words.  This isn't your Grandfathers credit card anymore.

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Absolutely a most excellent most, disappointed I almost missed it (thank you as well for quoting it) and that I missed that earlier Amex discussion.  

[ficojoe]

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@Wolf3 wrote:

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As you say Prime and SubPrime are used to designate customers.  That is why there is still a "Prime" rate of interest.    Although no credit card ever gets it.

This topic is "What makes a credit card "prime" and should I care?".    We are discussing what are the best cards from a customers perspective.

Prime is also used to discuss meat, but we are not talking about that either.

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I thought Wells Fargo offered a true "prime" credit card?

[Anonymous]

when talking about apr on credit cards there are two types fixed and variable. Variable, as it suggests, varies with the prime which is currently 3.25%, you will have a margin above that that calculates your rate, so if your rate is 9.99, you have 3.25 + 6.99 = 9.99. Fixed rate cards do not vary with the prime, and wether the prime rises or falls, you rate remains the same. This doesnt mean that the card companies cannot raise your rates. They can do so at any time for any reason. They may only raise your rate on future purchases though. Prime rate is set by I believe the top ten depositing banks in the nation ( I am also fairly sure that Credit Unions play by different rules). I have always the feeling, that Prime cards are offered by lenders who have some sort of depositing offerings as well. Even Amex has a savings / investing portfolio. 

[LS2982]

I'm sorry, but for all the hurdles I had to jump to get in with AMEX my Zync card is prime to me. No one can take that away from me, I earned it with exhausting credit repair for over a year. I understand it may not be a popular big rewards AMEX but it is an AMEX none the less with great customer service and good benefits.

Maybe people don't want to pay high AF,s right now, and want a decent charge card. Zync provides that for them.

[Wolf3]

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@LS2982 wrote:
I'm sorry, but for all the hurdles I had to jump to get in with AMEX my Zync card is prime to me. No one can take that away from me, I earned it with exhausting credit repair for over a year. I understand it may not be a popular big rewards AMEX but it is an AMEX none the less with great customer service and good benefits.

Maybe people don't want to pay high AF,s right now, and want a decent charge card. Zync provides that for them.

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It is a prime card to you, but not to others.  I worked hard to rebuild as well, and what I consider prime for my situaltion, is looked down upon by many here.

But to answer the posted question?   Should you or I care what others consider prime?     I say NO!

[LS2982]

True, nobody should care if someone thinks its prime or not. It just puts a dent in an accomplishment that was big to you when you see posts like that. I know nobody means any harm and its all good.

[Link2k]

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@Wolf3 wrote:

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As you say Prime and SubPrime are used to designate customers.  That is why there is still a "Prime" rate of interest.    Although no credit card ever gets it.

This topic is "What makes a credit card "prime" and should I care?".    We are discussing what are the best cards from a customers perspective.

Prime is also used to discuss meat, but we are not talking about that either.

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Prime always refers to the same thing, the best. Be that rate of interest, cut of meat, or in this case liklihood the customer could default.

Asking about what card is prime from a consumer perspective is non sensical. Its a misuse of terms, you might as well be having a discussion about malignant vs benign credit cards. Prime from a consumer perspective would by definition have to very based on ones needs. Hence in this sense prime is in the eye of the beholder. 

If the definition can vary wildly from person to person the word has no functionality. When you ask what card is prime you are simply asking what card is best. When a bank gives out a prime card they are giving it only to those customers least likely to default, regardless of terms.

Also prime vs subprime is a true dichotomy by definition anything that isn't prime must be subprime. True dichotomies tend to be useless at having explanatory value as well because the inclusion exclusion principle is generally ro broad.

Evaluate your needs and wants for a card and when someone tells you its prime or  subprime just laugh it off, if that person doesn't like your cards thats their choice but it has no bearing on the card and any benefits it provides you.

[Wolf3]

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@Link2k wrote:

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@Wolf3 wrote:

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As you say Prime and SubPrime are used to designate customers.  That is why there is still a "Prime" rate of interest.    Although no credit card ever gets it.

This topic is "What makes a credit card "prime" and should I care?".    We are discussing what are the best cards from a customers perspective.

Prime is also used to discuss meat, but we are not talking about that either.

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Prime always refers to the same thing, the best. Be that rate of interest, cut of meat, or in this case liklihood the customer could default.

Asking about what card is prime from a consumer perspective is non sensical. Its a misuse of terms, you might as well be having a discussion about malignant vs benign credit cards. Prime from a consumer perspective would by definition have to very based on ones needs. Hence in this sense prime is in the eye of the beholder. 

If the definition can vary wildly from person to person the word has no functionality. When you ask what card is prime you are simply asking what card is best. When a bank gives out a prime card they are giving it only to those customers least likely to default, regardless of terms.

Also prime vs subprime is a true dichotomy by definition anything that isn't prime must be subprime. True dichotomies tend to be useless at having explanatory value as well because the inclusion exclusion principle is generally ro broad.

Evaluate your needs and wants for a card and when someone tells you its prime or  subprime just laugh it off, if that person doesn't like your cards thats their choice but it has no bearing on the card and any benefits it provides you.

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The topic is what makes a credit card the best.   Not the customer's credit risk, which is well defined by the lending institutions.

Hence it varies greatly depending on the customers wants, needs, and situations.

In many things prime varies with the consumer..   Prime beef for example has a very high fat content, which for me is the worst from both a taste and health point of view.

[Open123]

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@Wolf3 wrote:

But to answer the posted question?   Should you or I care what others consider prime?     I say NO!

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Interesting question, to which there's no simple answer to, in my view.  Here's what I mean.

1.  In my professional life, the views and perceptions of others (vendors, clients, and other firms with whom we do business) matters a great deal.  When conducting business, I not only represent myself, but also that of my firm, my partners, and everyone who works with us.  It simply will not do using a card with a negative connotation attached (such as Credit One, First Premier, etc...) to it even if undeserved.  There are etiquette and protocol in every endeavor, and for conducting business, perception of credit worthiness (however accurate or not) is of paramount importance.  Would you hire a financial firm who pays for a luncheon with a First Premier card?  While the card used is certainly not a direct reflection of a person's honesty or integrity, one must wonder why would someone who is competing to manage my finances be using such a card.  Often times in a competitive environment, everyone competing for business makes every effor to put his best foot forward--the card we use should certainly not be an exception.  

2.  In my personal life, I couldn't care less.  If we're friends having a good time, who cares?  No need to impress my friends, and vice versa.  If my friend were to think less of me for using a sub-prime credit card, I'd serioulsy have to reevaluate the foundation on which that friendship has been founded.  So, in this case, one should not care. If it's prime to you and works well, who cares?  

3.  Finally, in some estabilishments, I will use a certain card because the card used leads to better service.  Whether we like it or not, in some circles, there are those places who will simply treat you better just because you're using a certain card, wearing a certain suit, or donning a particular shoe or watch.  

So, I think you should care in some cases, and not care in others.