topic What's a "prime" card? in Credit Cards

What's a "prime" card?

Anonymous — Mon, 20 Feb 2017 19:38:25 GMT

I've read a lot here on the boards. Some people refer to "subprime" and "prime" cards. What cards are in each category and why?

Re: What's a "prime" card?

DeeBee78 — Mon, 20 Feb 2017 19:51:40 GMT

@Anonymous wrote:
I've read a lot here on the boards. Some people refer to "subprime" and "prime" cards. What cards are in each category and why?

It's somewhat subjective, but if your card is from a high-risk lender (First Premier, Merrick, Continental Finance, CreditOne, etc.) it's generally considered a sub-prime card. These cards typicall have annual fees, account setup fees, and monthly maintenance fees, because their customers have a higher rate of default.

Moving into subjective, a lot of people consider the Capital One Secured, Platinum, and QuicksilverOne to be subprime, since they're issued with small limits and could have an annual fee as well.

Prime is pretty much anything else that isn't secured.

Re: What's a "prime" card?

happypill — Mon, 20 Feb 2017 22:18:51 GMT

I think of it this way. Prime cards compete for the business of folks who can qualify for a variety of cards, so they need to offer perks such as rewards, price protection, extended warranty, good customer service and a bunch of other stuff to get their business. Prime cards can sometimes have high fees, but offer perks that offset those fees.

Sub-prime lenders make their products available to riskier borrowers. They understand that these borrowers do not qualify for other cards based on their risk profile, so they charge fees as high as they can get away with. They have the borrower over a barrel and they take advantage of that by charging all sorts of fees & high interest rates without any offsetting benefits.

Re: What's a "prime" card?

Loquat — Mon, 20 Feb 2017 23:00:10 GMT

To me, a prime card is any card that replies APPROVED when swiped, inserted, or manually keyed. LOL! jk, prime vs subprime is subjective. It's a "to each, his or her own" sorta thing. Some would say Amex/Chase/BOA are prime...but a card from each of these lenders can be obtained with marginal scores (i.e. Amazon Visa, BOA Cash Rewards, Amex Delta Skymiles).

Re: What's a "prime" card?

AverageJoesCredit — Tue, 21 Feb 2017 00:14:02 GMT

Subjective as always, for someone who justs gets approved for their first card or a card theyve been wanting, they might believe thats prime. The above posters hit all the key spots about prime and subprime characteristics.

Ok, for my fellow fico family members who know my style( just wanted above to give my opinion and help op) my orher answer would be:

ONLY 2 cards should be considered Prime:

Amazon Prime store card and Chase Amazon Prime Visa Signature....... you know your prime when your card says it so

Re: What's a "prime" card?

galahad15 — Tue, 21 Feb 2017 00:36:00 GMT

In my humble opinion, prime = a card with a low interest rate, either with or without rewards (preferably with).

Re: What's a "prime" card?

Steelersboy — Tue, 21 Feb 2017 01:12:04 GMT

Prime cards are for higher credit-rating consumers.

Re: What's a "prime" card?

dragontears — Tue, 21 Feb 2017 02:28:50 GMT

Sub prime is easy to define: low limits, high APR and high annual fees. "Prime" is like beauty, it is in the "eye of the beholder" therefore is subjective.

Re: What's a "prime" card?

Revelate — Tue, 21 Feb 2017 03:24:55 GMT

We bastardized the term from the mortgage space, where all prime vs. subprime refers to is the FICO underwriting standard. By that traditional standard a great many cards are "subprime," but really it doesn't matter.

If a card works for you, use it. If it doesn't, don't apply. Life sucks worrying what others think.

Re: What's a "prime" card?

MyLoFICO — Tue, 21 Feb 2017 17:12:08 GMT

Sub-Prime = A card that cost you time, money or dignity to have or use. Low limits and potentially triple digit percentage rates.

Prime = Cards I don't qulify for.

Re: What's a "prime" card?

Dalmus — Tue, 21 Feb 2017 17:35:30 GMT

@Revelate wrote:
We bastardized the term from the mortgage space, where all prime vs. subprime refers to is the FICO underwriting standard. By that traditional standard a great many cards are "subprime," but really it doesn't matter.

If a card works for you, use it. If it doesn't, don't apply. Life sucks worrying what others think.

I agree... Whether a card is "prime" or "subprime" has no effect on your credit score. With most underwriting being automatic, nobody cares whether you have a $5,000 limit CapitalOne card or a $5,000 limit American Express. A $1,000 CreditOne account looks the same as a $1,000 FNBO.

As mentioned before, though, "subprime" can be easily interchanged with "predetory." Such as First Premier or CreditOne. Don't get me wrong, they serve their purpose for those who need to rebuild and are starting from rock bottom, but they are cards that everybody, regardless of credit philosophy, urge you to get rid of as soon as you qualify for anything better. High APR (24% + ) coupled with annual fees, monthly maintenance fees, fees to speak to a human being when you call in, etc, are all indicators of Cards You Should Get Rid Of As Soon As Possible.

Re: What's a "prime" card?

Anonymous — Tue, 21 Feb 2017 18:08:29 GMT

Whatever cards are offered inside Banks you can walk into… very prime.
If you have to search Google for several minutes just to get a phone number that isnt disconnected to contact bank… probably subprime.

Re: What's a "prime" card?

android01 — Wed, 22 Feb 2017 01:06:07 GMT

I don't think the plastic card involved is either prime or subprime in and of itself. It comes down to the actual people or organizations involved, prime lenders and borrowers and subprime lenders and borrowers. Not subprime or prime plastic.

A subprime borrower may have a lousy FICO score, many delinquencies reporting, a thin file (short history) and borderline income that could service a debt, too much existing debt etc. They have somehow screwed the credit pooch at sometime. Subprime borrowers are invariably denied for prime products, as a general rule. As others have said, a higher risk borrower. A subprime lender is usually an organization that will take the heightened perceived risk of lending to the subprime borrower through low limits, high fees and outrageous interest rates of 30% or more. A loan shark is the ultimate subprime lender.

A prime borrower is pretty much the exact opposite of the subprime borrower. FICO scores are generally above 720, the file is thicker and more established with no (or older) delinquencies, more and varied types of credit lines etc. In other words, a low risk borrower. Prime lenders will offer the prime borrower a higher credit limit, better rewards, and lower interest rates.

Many prime lenders have products aimed at sub prime borrowers as part of an overall portfolio, but the ones to watch out for are the lenders that are strictly subprime as a business model. Credit One and First Premier come to mind in the credit card world.

The above references all types of borrowing and lending (mortgages, car loans, lines of credit etc.) It's not only about credit cards. In fact, the whole prime/subprime thing is the root cause of what happened a few years back when the country's financial system almost collapsed.

Re: What's a "prime" card?

Anonymous — Wed, 22 Feb 2017 02:08:47 GMT

@android01 wrote:
I don't think the plastic card involved is either prime or subprime in and of itself. It comes down to the actual people or organizations involved, prime lenders and borrowers and subprime lenders and borrowers. Not subprime or prime plastic.

A subprime borrower may have a lousy FICO score, many delinquencies reporting, a thin file (short history) and borderline income that could service a debt, too much existing debt etc. They have somehow screwed the credit pooch at sometime. Subprime borrowers are invariably denied for prime products, as a general rule. As others have said, a higher risk borrower. A subprime lender is usually an organization that will take the heightened perceived risk of lending to the subprime borrower through low limits, high fees and outrageous interest rates of 30% or more. A loan shark is the ultimate subprime lender.

A prime borrower is pretty much the exact opposite of the subprime borrower. FICO scores are generally above 720, the file is thicker and more established with no (or older) delinquencies, more and varied types of credit lines etc. In other words, a low risk borrower. Prime lenders will offer the prime borrower a higher credit limit, better rewards, and lower interest rates.

Many prime lenders have products aimed at sub prime borrowers as part of an overall portfolio, but the ones to watch out for are the lenders that are strictly subprime as a business model. Credit One and First Premier come to mind in the credit card world.

The above references all types of borrowing and lending (mortgages, car loans, lines of credit etc.) It's not only about credit cards. In fact, the whole prime/subprime thing is the root cause of what happened a few years back when the country's financial system almost collapsed.

You hit the nail on the head!!! This definitely sums it up in a nutshell.

Re: What's a "prime" card?

Anonymous — Wed, 22 Feb 2017 14:58:06 GMT

@Anonymous wrote:
@android01 wrote:
I don't think the plastic card involved is either prime or subprime in and of itself. It comes down to the actual people or organizations involved, prime lenders and borrowers and subprime lenders and borrowers. Not subprime or prime plastic.

A subprime borrower may have a lousy FICO score, many delinquencies reporting, a thin file (short history) and borderline income that could service a debt, too much existing debt etc. They have somehow screwed the credit pooch at sometime. Subprime borrowers are invariably denied for prime products, as a general rule. As others have said, a higher risk borrower. A subprime lender is usually an organization that will take the heightened perceived risk of lending to the subprime borrower through low limits, high fees and outrageous interest rates of 30% or more. A loan shark is the ultimate subprime lender.

A prime borrower is pretty much the exact opposite of the subprime borrower. FICO scores are generally above 720, the file is thicker and more established with no (or older) delinquencies, more and varied types of credit lines etc. In other words, a low risk borrower. Prime lenders will offer the prime borrower a higher credit limit, better rewards, and lower interest rates.

Many prime lenders have products aimed at sub prime borrowers as part of an overall portfolio, but the ones to watch out for are the lenders that are strictly subprime as a business model. Credit One and First Premier come to mind in the credit card world.

The above references all types of borrowing and lending (mortgages, car loans, lines of credit etc.) It's not only about credit cards. In fact, the whole prime/subprime thing is the root cause of what happened a few years back when the country's financial system almost collapsed.

You hit the nail on the head!!! This definitely sums it up in a nutshell.

Nail or nut? Which is it! (I agree though)...

One easy rule though: if the card has MONTHLY fees (usually after the first year) it is definitely a card aimed at subprime borrowers

Re: What's a "prime" card?

MyLoFICO — Wed, 22 Feb 2017 17:49:00 GMT

Found it. Prime card. You are welcome.

Re: What's a "prime" card?

Anonymous — Wed, 22 Feb 2017 18:57:40 GMT

To oversimplify things if one out of five people dont bother to pay back, the credit company still wins at 25% interest. This is not adding in someone struggling attempting to pay and paying interest and then later defaulting, not adding in lenders reinvestments, swipe fees, late fees membership fees and so on. It's an incredible Racket and I wish I could get in to it

Re: What's a "prime" card?

wasCB14 — Wed, 22 Feb 2017 19:37:50 GMT

@Anonymous wrote:
@Anonymous wrote:
@android01 wrote:
I don't think the plastic card involved is either prime or subprime in and of itself. It comes down to the actual people or organizations involved, prime lenders and borrowers and subprime lenders and borrowers. Not subprime or prime plastic.

A subprime borrower may have a lousy FICO score, many delinquencies reporting, a thin file (short history) and borderline income that could service a debt, too much existing debt etc. They have somehow screwed the credit pooch at sometime. Subprime borrowers are invariably denied for prime products, as a general rule. As others have said, a higher risk borrower. A subprime lender is usually an organization that will take the heightened perceived risk of lending to the subprime borrower through low limits, high fees and outrageous interest rates of 30% or more. A loan shark is the ultimate subprime lender.

A prime borrower is pretty much the exact opposite of the subprime borrower. FICO scores are generally above 720, the file is thicker and more established with no (or older) delinquencies, more and varied types of credit lines etc. In other words, a low risk borrower. Prime lenders will offer the prime borrower a higher credit limit, better rewards, and lower interest rates.

Many prime lenders have products aimed at sub prime borrowers as part of an overall portfolio, but the ones to watch out for are the lenders that are strictly subprime as a business model. Credit One and First Premier come to mind in the credit card world.

The above references all types of borrowing and lending (mortgages, car loans, lines of credit etc.) It's not only about credit cards. In fact, the whole prime/subprime thing is the root cause of what happened a few years back when the country's financial system almost collapsed.

You hit the nail on the head!!! This definitely sums it up in a nutshell.
Nail or nut? Which is it! (I agree though)...

One easy rule though: if the card has MONTHLY fees (usually after the first year) it is definitely a card aimed at subprime borrowers

It's a five-paragraph nutshell.

The term is pretty vague once you deviate from the literal prime interest rate definition.

Re: What's a "prime" card?

Anonymous — Wed, 22 Feb 2017 19:51:59 GMT

I think its a term with no value whatsoever. I put it in the same category as naming products natural or pro. Just a meaningless buzz word.