What makes a high end card better?

[Anonymous]

Am I correct that the most cash back you can get on all purchases is 2% (like Citi Double Cash) If you want more than that you would need ctagory specific cards or ones that have changing catagories? I am trying to determine what the benefit of higher end cards is if you are not interested in travel perks and the like. It seems like the higher end cards are mainly for airfair, hotel credits and targeted spending. What are the other benefits of these cards? Potential higher limits and lower APR's? I am sure I'll want more cards down the road, but I am curious if I am missing something as to what makes one that much better than another. Why do people want Disco or Amex or Penfed? Sorry if this is a dumb question, I feel like I am missing something.

[myjourney]

Good question but first answer this.....

What in your view is a high end card? 

I don't view any as that I view them more as what card benefits me and do I have all options covered for max cost effective savings

[happypill]

In terms of general spend cash back, 2% is pretty much the best you can do other than a few unusual outliers (like the JCB Maurkai).

"High end" cards often offer other things though in addition to points or cash back.  Some of the benefits are quite valuable and tied into a certain brand if you use it - such as free annual hotel nights or free checked bags.  These can be worth a lot of money who use them a lot.  There are other benefits that are tied to higher end cards (visa signature, world elite mastercard) like concierge services, car rental insurance, price protection, warranty extension and private jet reservation services.  Some of these things are pretty useful and valuable, while others are pretty pie-in-the-sky.

You're right that a lot of benefits are tied to travel.  That's probably because business travelers are one of the most lucrative segments of the market.  They tend to spend a lot and value convenience over rock bottom prices.  Higher limits are definitely a factor for many higher-end cards.  Low APR isn't really that big of a draw as most people who spend a lot tend to PIF.  To think of it atother way, if you don't PIF and you spend a lot, you'll be buried in debt before you earn many points.

[Anonymous]

I guess I am trying to figure out what my next card should be and am having a tough time understanding what the benefits are as look at the cards that require better scores and better credit history to be approved for. That alone should answer my question: If there are not many that I feel entice me enough, there is no reason to go for them. I guess I was expecting more cards to offer increasing reward percentages across the board and that were not just specifically targeted at travel perks. Do cards that are harder to be approved for generally offer higher limits and lower rates or is that more dependant on the cardholder? For example, the Cap1 QS offers 1.5% cash back and would be easier to get than a Chase Freedom card. (I assume) What would make the Chase card better? A longer introductory rate or the additional discount offered on rotating catagories?

A better way to put this is what makes one bank have stricter requirements than another when many of the rewards and perks offered seem so similar? My outlook is obviously skewed towards the things I feel would benefit me the most. One of the things that has enabled me to start learning to be responsible with my credit is to make sure the choices I make fit my lifestyle and spending habits, hence picking cards whose perks will benefit me the most. As I look to the future, it seems like fewer and fewer cards offer that much of a greater benefit. I am sure if my income were much higher and I could afford to travel more I would see the benefits. I also understand that there is a reason so many cards offer travel perks. The companies obviously know what segments to target and what perks entice people towards their products. 

I am also curious if things like customer service, credit disputes, grace periods and things like that differ as well. 

[myjourney]

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@Anonymous wrote:

I guess I am trying to figure out what my next card should be and am having a tough time understanding what the benefits are as look at the cards that require better scores and better credit history to be approved for. That alone should answer my question:

If there are not many that I feel entice me enough, there is no reason to go for them.

This is a solid foundation for picking a card .....I take my hat off to you 

I guess I was expecting more cards to offer increasing reward percentages across the board and that were not just specifically targeted at travel perks.

If you don't travel then the best card for someone like that would be a cashback card 

Do cards that are harder to be approved for generally offer higher limits and lower rates or is that more dependant on the cardholder?

Based more on the persons credit profile with not just what you call high end cards but all cards although the cards with the most benefits usually come with one set APR and an AF

For example, the Cap1 QS offers 1.5% cash back and would be easier to get than a Chase Freedom card. (I assume) What would make the Chase card better? A longer introductory rate or the additional discount offered on rotating catagories?

No difference in the cards as far as requirements for approval but as with anything you look for the best deals for your needs and yes some banks have higher expectations as to (risk) who they'll lend money to....

A better way to put this is what makes one bank have stricter requirements than another when many of the rewards and perks offered seem so similar? 

When it comes to cobranded cards surprisingly the criteria is usually set as to what clients they want by the company ......say Delta, Hyatt...Costco

The lender (Amex, Chase, Citi)  just manages the portfolio 

Now Chase for example sets lending requirments (risk) for CSP Freedom and Slate that's their own cards

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The key to getting approved for any and all banks 

Build a good CR

Keep CR's clean 

Pay your bills on time 

Do not apply for everything under the sun if you have no need for it

And the standard keep UTL low, INQ's use wisely and build a lasting bank relationship

[Anonymous]

So, in addition ot the actual perks of the card, certain companies may set a stricter lending practices if their clients request a certain cardholder profile? It would be similar to BMW requiring their car dealers to have a higher standard of practices and appearance vs. a Ford dealer to maintain a certain product integrity?

As I learn more and more about building credit, I realize I misunderstood many aspects of it. I had always imagined that the better my credit became, there would always be a better product out there to strive for. That just may not be the case. (for me and at this stage, anyways) I am learning to view cards more as tools and less as prizes.

[longtimelurker]

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@Anonymous wrote:

As I learn more and more about building credit, I realize I misunderstood many aspects of it. I had always imagined that the better my credit became, there would always be a better product out there to strive for. That just may not be the case. (for me and at this stage, anyways) I am learning to view cards more as tools and less as prizes.

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Right, if you are looking for cashback on general spend, you can fairly quickly hit the top tier (2% with outliers like JCB available only in some place, and Discover IT Miles offering 3% only for a year).   And a Citi DoubleCash at 2% is often no harder to obtain that a 1.5% card from another bank.    So you don't slowly climb the ranks of 2%, 3%, 5% etc as your score grows.  That's because there is a limit on what  would be profitable, no issuer can offer a 5% everywhere, no cap no AF card for example.

[pipeguy]

I know this is not an especially popular card on MyFico, but the GM BuyPower card offers 5% Earnings on your first $5,000 in purchases every year, then 2% unlimited Earnings on purchases after that as a "credit" toward a future purchase of a GM vehicle. I understand that it's not direct cash back and the awards are kind of like a savings account where you are saving for a new car, but that said if this fits your needs, its a good deal. Mercedes has a similar product which credits you for future repairs or purchases. 

Truth in advertising, I have the GM BuyPower Card with an $11,000 CL and I generally only buy GM Cars/Trucks so this product works for me at 5% payback each year. 

[myjourney]

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@Anonymous wrote:

So, in addition ot the actual perks of the card, certain companies may set a stricter lending practices if their clients request a certain cardholder profile? It would be similar to BMW requiring their car dealers to have a higher standard of practices and appearance vs. a Ford dealer to maintain a certain product integrity?

As I learn more and more about building credit, I realize I misunderstood many aspects of it. I had always imagined that the better my credit became, there would always be a better product out there to strive for. That just may not be the case. (for me and at this stage, anyways) I am learning to view cards more as tools and less as prizes.

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Yes I think you have a better understanding of the whole picture now....

[Anonymous]

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@Anonymous wrote:

So, in addition ot the actual perks of the card, certain companies may set a stricter lending practices if their clients request a certain cardholder profile? It would be similar to BMW requiring their car dealers to have a higher standard of practices and appearance vs. a Ford dealer to maintain a certain product integrity?

As I learn more and more about building credit, I realize I misunderstood many aspects of it. I had always imagined that the better my credit became, there would always be a better product out there to strive for. That just may not be the case. (for me and at this stage, anyways) I am learning to view cards more as tools and less as prizes.

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Remember that a credit card is the physical representation of your "privilege" to owe a bank money, repayable on their terms. Handle it accordingly.

Different banks have different underwriting requirements because they target different consumers and they offer different incentives to compete for your business. So yes, requirements can vary by lender and by card.