topic Re: Prime vs Sub Prime - clarification in Credit Cards

Prime vs Sub Prime - clarification

cp94550 — Fri, 15 Jan 2016 06:36:32 GMT

Can someone explain to me he difference between prime and sub prime? Like what specifically makes something one or other? Is the QS1 considered sub, while the Venture prime? Does it come down to CL, AP rate?

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 07:20:28 GMT

It's not the credit card issuer or credit card that is prime or sub prime, it's the borrower (card user) that is classified as prime or sub prime. A prime borrower is someone who is considered not risky by lender, and is usually provided with low cost credit cards or loan (low APR, high CL).

Issuer that primarily caters to subprime customer (like Credit One or First Primier) are sometimes called subprime lender. That's about it.

@cp94550 wrote:
Can someone explain to me he difference between prime and sub prime? Like what specifically makes something one or other? Is the QS1 considered sub, while the Venture prime? Does it come down to CL, AP rate?

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 07:25:49 GMT

@Anonymous wrote:
It's not the credit card issuer or credit card that is prime or sub prime, it's the borrower (card user) that is classified as prime or sub prime. A prime borrower is someone who is considered not risky by lender, and is usually provided with low cost credit cards or loan (low APR, high CL).

Issuer that primarily caters to subprime customer (like Credit One or First Primier) are sometimes called subprime lender. That's about it.
@cp94550 wrote:
Can someone explain to me he difference between prime and sub prime? Like what specifically makes something one or other? Is the QS1 considered sub, while the Venture prime? Does it come down to CL, AP rate?

I don't know for sure, but someone I know put it this way:

500 SL = Sub Prime

3000 SL Mid Prime

5000 SL and up - Prime

Re: Prime vs Sub Prime - clarification

takeshi74 — Fri, 15 Jan 2016 15:23:21 GMT

@cp94550 wrote:
Can someone explain to me he difference between prime and sub prime? Like what specifically makes something one or other? Is the QS1 considered sub, while the Venture prime? Does it come down to CL, AP rate?

As stated above, subprime and prime are really only relevant to the borrower and not the card despite how people tend to use the terms. A given creditor or product may cater to prime or subprime consumers. As for popular usage, it's subjective and doesn't really mean much.

Don't worry over what others consider "prime" or "subprime". Start with sorting out your specific needs/wants. Use that to select cards that suit you.

CL's and APR's are not just determined by the product. It's what one's credit profile and income qualify for that determine these things. if one has poor/thin credit and applies for a "prime" card one can get a low CL and a high APR. Another person with excellent credit and a thick profile could get a high limit and low APR applying for the same card. Again, it's a matter of the individual.

Don't overlook prior discussions as a resource as well. This is an extremely common topic.

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&es_th=1&ie=UTF-8#q=prime%20subprime%20site%3Aficoforums.myfico.com

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 15:52:45 GMT

While 'prime' and 'subprime' have to do with the borrower more than the issuer, here's a little clarification regarding your question specifically about Cap One cards.

All of this is ONLY for Cap One.

Capital One is an issuer that has products available for prime profiles as well as subprime profiles. The quickest way to tell, from a standpoint of someone who does not currently carry one of those cards, is to see what type of card it is.

For Cap One, MasterCards are likely available to people with subprime profiles. This includes the Builder Program card (if you can still get that), the secured offer, the platinum offer and the QS1. Visas, on the other hand, are prime offerings - VentureOne, Venture and QS. The exception to this is the Journey, which is their student card so it has less strict underwriting than their other visas.

If you're not sure, check in the terms and conditions of the offer. Capital One's terms will pretty much tell you. If it says you can't apply for the card if you have two capital one cards already, it's catered toward subprime borrowers. If it says the offer doesn't apply if you have five capital one cards, it's catered toward prime borrowers. I've found this in terms for cobranded cards as well (Sony and the PlayStation cards) so it's a decent hint across the board.

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 15:58:50 GMT

Prime is interest below 20% or so and limits greater than id say around 3k. (Chase, AMEX, Citi) [All of which are no better than Cap1 or NFCU in regards to CC function]

Sub-prime is +20% interest rate, below 3k limits and annuall fee, activation fee etc etc etc. (Blaze, Verve, Milestone)[Rebuild cards for a year when no one will approve you]

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 16:02:32 GMT

@Anonymous wrote:
Prime is interest below 20% or so and limits greater than id say around 3k. (Chase, AMEX, Citi) [All of which are no better than Cap1 or NFCU in regards to CC function]

Sub-prime is +20% interest rate, below 3k limits and annuall fee, activation fee etc etc etc. (Blaze, Verve, Milestone)[Rebuild cards for a year when no one will approve you]

But these are all fairly arbitrary reflecting the fact that the term, as applied to ccs rather than borrowers, has little meaning. That said, to me one pretty firm rule: if the card has a MONTHLY fee, it's probably subprime!

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 16:05:27 GMT

@Anonymous wrote:
While 'prime' and 'subprime' have to do with the borrower more than the issuer, here's a little clarification regarding your question specifically about Cap One cards.

All of this is ONLY for Cap One.

Capital One is an issuer that has products available for prime profiles as well as subprime profiles. The quickest way to tell, from a standpoint of someone who does not currently carry one of those cards, is to see what type of card it is.

For Cap One, MasterCards are likely available to people with subprime profiles. This includes the Builder Program card (if you can still get that), the secured offer, the platinum offer and the QS1. Visas, on the other hand, are prime offerings - VentureOne, Venture and QS. The exception to this is the Journey, which is their student card so it has less strict underwriting than their other visas.

If you're not sure, check in the terms and conditions of the offer. Capital One's terms will pretty much tell you. If it says you can't apply for the card if you have two capital one cards already, it's catered toward subprime borrowers. If it says the offer doesn't apply if you have five capital one cards, it's catered toward prime borrowers. I've found this in terms for cobranded cards as well (Sony and the PlayStation cards) so it's a decent hint across the board.

Or even more easily, for current offerings, check which credit level each card requires on Cap One site. QS requires "Excellent" while QS1 is "Average" (and Cap One's definition of "Excellent" is very lenient)

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 16:06:00 GMT

@Anonymous wrote:
@Anonymous wrote:
Prime is interest below 20% or so and limits greater than id say around 3k. (Chase, AMEX, Citi) [All of which are no better than Cap1 or NFCU in regards to CC function]

Sub-prime is +20% interest rate, below 3k limits and annuall fee, activation fee etc etc etc. (Blaze, Verve, Milestone)[Rebuild cards for a year when no one will approve you]
But these are all fairly arbitrary reflecting the fact that the term, as applied to ccs rather than borrowers, has little meaning. That said, to me one pretty firm rule: if the card has a MONTHLY fee, it's probably subprime!

Most individuals will relate more easily to the obtainable credit in a given category rather the specific factors that equate a prime or sub-prime borrower, this is the reason most people relate the terms to products. Traditionally prime begins at 680+ sub-prime ends at around 650-660. However other factors depending on the UW will factor into the person ability to acquire credit.

Re: Prime vs Sub Prime - clarification

azguy13 — Fri, 15 Jan 2016 16:09:06 GMT

I agree with much of what people are stating here except for the $3k> means subprime. An applicant can have a score in the 700s but have a low income and may not be issued a $3k limit. By that logic, someone who makes $20k/yr with a 730 FICO and $15k (representing 75% of their annual income in credit) in available credit would be considered subprime; which really isn't true.

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 16:19:36 GMT

@azguy13 wrote:
I agree with much of what people are stating here except for the $3k> means subprime. An applicant can have a score in the 700s but have a low income and may not be issued a $3k limit. By that logic, someone who makes $20k/yr with a 730 FICO and $15k (representing 75% of their annual income in credit) in available credit would be considered subprime; which really isn't true.

However other factors depending on the UW will factor into the persons ability to acquire credit.

Re: Prime vs Sub Prime - clarification

happypill — Fri, 15 Jan 2016 16:16:22 GMT

I think about it a little differently:

Prime - a product that offers good terms & perks so that it can compete for people with good credit. In other words, people with "prime" credit could get a lot of different cards and have choices, so the "prime" card must offer something to entice them to apply & use the card.

Sub-prime - a product that has poor terms, few or no perks and tacks on fees because people with poor credit have no other choice. Customers who accept these types of cards probably do so because they can't get something better.

From the Cap One lineup, for example. The QS1 & QS offer the same rewards, but the QS1 tacks on an additional fee. Still, the QS1 isn't too bad and I feel like its right on the boarder between prime/sub-prime (totally subjective of course). There are a lot of other cards that have way worse terms & fees. But, the QS1 is "sub-prime" to me because nobody would accept a QS1 if they could actually get a QS.

Re: Prime vs Sub Prime - clarification

galahad15 — Sat, 16 Jan 2016 00:20:52 GMT

@Anonymous wrote:

For Cap One, MasterCards are likely available to people with subprime profiles. This includes the Builder Program card (if you can still get that), the secured offer, the platinum offer and the QS1. Visas, on the other hand, are prime offerings - VentureOne, Venture and QS. The exception to this is the Journey, which is their student card so it has less strict underwriting than their other visas.

Perhaps for their current card offerings, but not necessarily for their discontinued or grandfathered card offerings perhaps? If you use the Internet Time Machine a.k.a. Wayback Machine to look at cached pages from the past for Cap1 cards, some of their past MC products included prime or even super-prime terms. I guess my point is that a grandfathered Cap1 MC from say "the good old days of yore" may not necessarily be sub-prime

ETA: sorry, corrected accidental typo

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 20:32:19 GMT

@galahad15 wrote:
@Anonymous wrote:

For Cap One, MasterCards are likely available to people with subprime profiles. This includes the Builder Program card (if you can still get that), the secured offer, the platinum offer and the QS1. Visas, on the other hand, are prime offerings - VentureOne, Venture and QS. The exception to this is the Journey, which is their student card so it has less strict underwriting than their other visas.
Perhaps for their current card one offerings, but not necessarily for their discontinued or grandfathered card offerings perhaps? If you use the Internet Time Machine a.k.a. Wayback Machine to look at cached pages from the past for Cap1 cards, some of their past MC products included prime or even super-prime terms. I guess my point is that a grandfathered Cap1 MC from say "the good old days of yore" may not necessarily be sub-prime

Oh I agree with what you're saying here absolutely, and there are QS Mastercards out there that have been upgraded from QS1 with huge limits and good terms and no annual fee. But I mean like if you're looking at it today and looking at all of their cards and looking to apply for something, generally speaking the current mastercards are likely available for subprime profiles.

Re: Prime vs Sub Prime - clarification

Anonymous — Fri, 15 Jan 2016 22:29:39 GMT

@Anonymous wrote:
@Anonymous wrote:
While 'prime' and 'subprime' have to do with the borrower more than the issuer, here's a little clarification regarding your question specifically about Cap One cards.

All of this is ONLY for Cap One.

Capital One is an issuer that has products available for prime profiles as well as subprime profiles. The quickest way to tell, from a standpoint of someone who does not currently carry one of those cards, is to see what type of card it is.

For Cap One, MasterCards are likely available to people with subprime profiles. This includes the Builder Program card (if you can still get that), the secured offer, the platinum offer and the QS1. Visas, on the other hand, are prime offerings - VentureOne, Venture and QS. The exception to this is the Journey, which is their student card so it has less strict underwriting than their other visas.

If you're not sure, check in the terms and conditions of the offer. Capital One's terms will pretty much tell you. If it says you can't apply for the card if you have two capital one cards already, it's catered toward subprime borrowers. If it says the offer doesn't apply if you have five capital one cards, it's catered toward prime borrowers. I've found this in terms for cobranded cards as well (Sony and the PlayStation cards) so it's a decent hint across the board.
Or even more easily, for current offerings, check which credit level each card requires on Cap One site. QS requires "Excellent" while QS1 is "Average" (and Cap One's definition of "Excellent" is very lenient)

The required rating listed for a lot of these cards confuses me. I've been approved for Cap1, Discover, Amex and Chase cards that supposedly require "Excellent" credit, all with over 10k limits, but my CB ratings are in the "Good" category. I'm sure there are other factors considered.

Re: Prime vs Sub Prime - clarification

Anonymous — Sat, 16 Jan 2016 01:05:24 GMT

From my experience prime vs subprime were due to me and not necessarily the card or issuer. There are exceptions though.

Amex used to let me charge way over the credit limit when things were good. If my credit got worse they would lower the amount I could charge. Because of me and my credit changing my prime card became a mid prime card because of me and how the bank viewed me and not due to a set in stone rule. Now a centurion card would be different but it still would be me and my profile that would allow me to have a card like that.

I have two friends that have cap 1 spark card. Same model and color but one has a 1k credit line while the other has 25k. It's the profiles that made the cards different even though they were the same spark card.

Re: Prime vs Sub Prime - clarification

Imperfectfuture — Sat, 16 Jan 2016 08:46:06 GMT

@Anonymous wrote:
@Anonymous wrote:
While 'prime' and 'subprime' have to do with the borrower more than the issuer, here's a little clarification regarding your question specifically about Cap One cards.

All of this is ONLY for Cap One.

Capital One is an issuer that has products available for prime profiles as well as subprime profiles. The quickest way to tell, from a standpoint of someone who does not currently carry one of those cards, is to see what type of card it is.

For Cap One, MasterCards are likely available to people with subprime profiles. This includes the Builder Program card (if you can still get that), the secured offer, the platinum offer and the QS1. Visas, on the other hand, are prime offerings - VentureOne, Venture and QS. The exception to this is the Journey, which is their student card so it has less strict underwriting than their other visas.

If you're not sure, check in the terms and conditions of the offer. Capital One's terms will pretty much tell you. If it says you can't apply for the card if you have two capital one cards already, it's catered toward subprime borrowers. If it says the offer doesn't apply if you have five capital one cards, it's catered toward prime borrowers. I've found this in terms for cobranded cards as well (Sony and the PlayStation cards) so it's a decent hint across the board.
Or even more easily, for current offerings, check which credit level each card requires on Cap One site. QS requires "Excellent" while QS1 is "Average" (and Cap One's definition of "Excellent" is very lenient)

Not for me. . Not worthy.

Re: Prime vs Sub Prime - clarification

Anonymous — Sat, 16 Jan 2016 10:46:51 GMT

If the card works where I buy the Prime Rib for dinner, to me that's prime. Someone had to go there!

Re: Prime vs Sub Prime - clarification

Anonymous — Sat, 16 Jan 2016 14:59:54 GMT

@Imperfectfuture wrote:
@Anonymous wrote:
Or even more easily, for current offerings, check which credit level each card requires on Cap One site. QS requires "Excellent" while QS1 is "Average" (and Cap One's definition of "Excellent" is very lenient)
Not for me. . Not worthy.

I meant lenient in the sense of their definition of excellence, not that everyone meeting that definition will get the card! One of the requirements for Cap One to considier your credit as excellent is that you have no 60 day lates this year. So you could have (multiple) 30 days late, or a 90 day late the previous year etc. Of course, they may not grant you the card, but their definition is weak....

Re: Prime vs Sub Prime - clarification

wacdenney — Sat, 16 Jan 2016 17:51:34 GMT

You can tell a lot about a lender by where they apply their anual fees. A good lender that caters to the prime market will apply anual fees to their best card offerings with the best perks and rewards. A shadowy sub-prime lender that caters to the sub-prime market will apply anual fees to junk cards with low limits, high APR's, and few if any perks. The "rewards" that a sub-prime lender may use to try to peddle their products aren't really even rewards because they are negated by the anual fee.