Editorial Policy

About Your Credit Level

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By Eva Norlyk Smith, Ph.D.
May 22, 2009

Credit card companies look at credit history and other factors in order to determine whether to accept an application for a particular card. Depending on how you have managed your credit, you may fall under one of the following 4 general categories:

  1. Excellent credit — you have no debt, or your debt is relatively small compared to your income (the higher the income, the better, of course) and you have no reports of late payments or missed payments on your credit reports.
  2. Good to average credit— your debt may be somewhat high compared to your income or you have 1 to several late payments, but no failures to make payments.

    The better your credit rating, the more likely your application will be approved. The credit cards we recommend for the above two categories are:

    Citi Cards
    American Express cards
    Discover cards
    Capital One cards
    Bank of America cards
    Advanta (business cards)

  3. Bad credit— your credit history includes high debt, default on payments, and present or past bankruptcy.

    There are banks which specialize in providing credit cards to people in this category.

  4. No Credit — no credit history, usually students and young people. There are credit cards which are geared for people in this category. See student credit cards.

Your credit history, amount of debt you carry, and your income is also important in determining the following:

  1. The type of card you get approved for (Platinum, Gold, Standard, Secured etc.)
  2. The credit limit you get approved for
  3. Ongoing Annual Percentage Rate (APR). Some cards have a range of APR’s. The card issuer will assign you an APR depending on how you rate with them. Please read the “terms and conditions” for each card to find out its ongoing APR range. Some cards will offer one ongoing APR only.