5 Best Credit Cards for People With Excellent Credit
Updated May 2012
If you have excellent credit, the chances are you already know it. You always pay your bills on time, and you are very unlikely to carry a balance on your credit cards. In return for your responsible nature, you are deluged with offers for more credit cards. Overwhelmed and disillusioned with all of these choices, many of you are content to remain loyal to whichever card you had been using for years. It’s easy, comfortable, and hassle free to use the same card in perpetuity. But by doing so, are you betraying the sound principals of financial management that earned you your excellent credit score? (See also: Surprising Things That Can Kill Your Credit)
Snap Out of It!
Those with excellent credit are likely to be using their cards simply as a method of payment, and they may be earning some additional rewards. Nevertheless, this practice is akin to storing money in a bank for safekeeping, without concern to the returns being accrued on your investment. The reality is that like savings, credit card spending should also produce a competitive return. Although saving is always a preferable activity to spending, those with excellent credit are leaving money on the table by not attempting to maximize the returns on their credit cards.
The Ways to Earn High Returns on Spending
The best way to compare credit card rewards is through the percentage of value earned per dollar spent. For example, 1% cash back is the bare minimum that you should expect from any reward card. If you are earning that amount or less, it is as unwise as closing on a mortgage with a higher APR that what is available. The two most common ways to earn credit card rewards are in the form of cash back or loyalty points such as frequent flier miles. If you are earning points or miles, you should assign a value to them in order to assure you are receiving the returns you deserve. The more value you earn per dollar spent, the better you are doing. Finally, there are a few cardholders who do have excellent credit, but may carry a balance from time to time. These people should always carry a credit card with the lowest APR on the market.
The Best Cards for People With Excellent Credit
Each of the cards on this list are only offered to those with excellent credit, but they offer very high rates of cash back or points. The exception here is the Simmons First card, which as the card with the lowest interest rate on the market, is the best choice for those who carry a balance. There is no one card that is perfect for everyone, but each has its unique advantages that appeal to different types of cardholders.
Fidelity Investment Rewards American Express Card
At the top end of cash back rewards cards are those rare products that earn 2% cash back on all purchases, all the time. Fidelity offers several versions of its American Express card that do just that. In this case, the cash back is returned to the Fidelity account of your choice, such as a Fidelity IRA, Fidelity-Managed 529 Account, Brokerage Account, or Cash Management Account. There is no annual fee for this card and only a 1% foreign transaction fee.
Capital One Venture Rewards
Capital One offers this card only to applicants with the best credit scores. By using this card, customers can earn two of their “miles” for each dollar spent. Fortunately, their miles are not like those of any airline; they can be redeemed for one cent each towards a statement credit against any travel related expense. The end result is that this card consistently returns 2% cash back as statement credits so long as the cardholder can claim at least that amount in hotels, car rentals, or airfare. There is a $59 annual fee for this card that is waived the first year, and like all of their cards, there are never any foreign transaction fees.
Sapphire Preferred From Chase
Chase has been making an all-out effort to court those with excellent credit histories, and the Sapphire Preferred has quickly become their flagship product. Chase offers a single Ultimate Rewards point per dollar spent on most purchase, with double points for spending on travel and restaurants. Triple points are earned for spending on travel through their Ultimate Rewards site, and all points earned are eligible for a 7% bonus at year’s end. Once earned, points can be redeemed at a rate of 1.25 cents each towards travel, or one cent each towards other experience and merchandise awards. Finally, Ultimate Rewards points can be instantly transferred to points or miles in the program's several different airlines and hotels. In fact, you can even transfer points to other people’s accounts, a feat impossible with most other programs. There is a $95 annual fee for this card that is waived the first year, but there are never any foreign transaction fees. Finally, this card is made of some type of plastic and metal sandwich giving it a heavy, solid feel that always draws comments when I use it.
Simmons First Visa Platinum
Not everyone with great credit is in a position to pay all of their credit card balances in full each month. Cardholders with near-perfect credit who occasionally carry a balance should do so on the card with the lowest standard interest rate on the market. The Simmons First Visa Platinum offers an APR equal to the Prime Rate plus 4%, the lowest rate that I am aware of. There is no annual fee for this card, but there is a foreign transaction fee of 2%.
Starwood Preferred Guest Card From American Express
Here is the card for those who understand and appreciate the value of hotel points and airline miles. The Starpoints earned by this card can be redeemed for any available standard room at any Starwood Hotel, including Sheratons and Westins. These points are extremely valuable because there are no blackout dates or capacity restrictions in the program. Alternatively, your Starpoints can be exchanged for miles in the programs of thirty different carriers around the world. Since each of those carriers can have dozens of partners, the award options are nearly limitless. Redeem your points for miles, and use those miles for premium class international travel, and it is easy to see returns of 5% or higher on each dollar spent. There is a $65 annual fee for this card, and American Express does charge a 2.7% foreign transaction fee.
If you have excellent credit and you are not getting at least 2 cents in value for each dollar spent, or the lowest interest rate on the market, you need take a serious look at the cards on this list. As a smart consumer with excellent credit, you should always be receiving the highest return on not just your savings, but on your spending as well.