While FICO differentiates between good and excellent credit, we avoid such hair splitting; if you are able to get a premium credit card we will go ahead and say you belong to a broad category of credit called “good”. As a rule of thumb a 700+ score should suffice, and income requirements will range from $60-$80k will be advertised, but really, premium cards need big spenders to survive. It’s the only way they can hope to cover their sizable fixed costs. And while a relatively large income is an obvious indicator of higher than average spending, it is not the only thing being looked at, and perhaps not the most important factor. Jump to read more about these additional factors.
Good Credit Score Credit Cards:
World Elite Mastercard: WestJet World Elite
Visa Infinite: TD Aeroplan Infinite
For Cashback: MBNA World Elite
For Low Interest: MBNA trueline
For Air miles: BMO World Elite
Visa Infinite Privilege:TD Aeroplan Infinite Privilege
How do you know if you will qualify?
Premium cards offer crazy fixed value in the hopes of earning pride of place in big spending wallets. These cards throw down bold sign up bonuses, hundreds, sometimes thousands worth of insurance and payment benefits, and high percentages of cashback on spend. Their hopes for return on investment rests on achieving big spending averages and/or high interest-accruing balances.
Minimum income requirement – less important than you might think
The card broadcasts a minimum income requirement, but we are inclined to believe this is something of a box checking exercise.
The minimum spend amount is suggested by the issuer, not the bank who is actually footing the reward bill. And why does the issuer strongly recommend a minimum income? It is to appease the merchant networks, who want a good reason they are being charged high payment processing fees on particular cards – yes this is a higher than average fee, but we are bringing you a high value customer! The easiest method of transmitting this message is through a blanket income requirement. Seems to have worked for the merchants.
But not necessarily for the banks! And the banks need to foot the bill for generous rewards, the minimum value of which is mandated by the issuers in exchange for using their brand – brands like Visa Infinite or Mastercard World Elite to name two. (The issuers have it good don’t they?!)
Disposable Income > Income Requirement
The bank is probably less concerned with how much money you make than with how much money you have available with which to spend and generate fees. The bachelor/bachelorette earning $50,000 with minimal fixed liabilities might have more potential value in terms of spend than the family breadwinner earning $70,000 but with expensive kids. Again, one of the paramount concerns of the credit card company is the likely disposable income theoretically available to generate fees on the credit card, and in the above comparison the lower income earner could be the winner.
How Much Can you Afford to Borrow?
You might have a great FICO score, but have you demonstrated the ability to pay back large amounts? Premium cards will generally come attached with high credit limits, and the credit card company is keen to at least positively assess your ability to pay back debt, should you accrue it.
So again, the bank will be keenly interested in your disposable income levels, but also clues as to your financial maturity – got a mortgage? Conservative investor? Nothing foolish like payday loans? – to gauge your risk level.
While income minimums and good FICO levels are the most visible of requirements, the bank will most likely check your disposable income to ensure you are worth the large upfront investment. You might squeak through with a relatively low FICO if your disposable income is high, and vice versa. If you find yourself getting rejected, take a shot with the MBNA World Elite – MBNA has the reputation of being a bit less conservative on approvals – or perhaps just go with the AMEX Gold, which has a lower barrier to entry but can go toe to toe with most top premium cards. Alternatively, check out our average credit category, in which we list a number of quality cards with smaller initial bank costs and, as a result, lower barriers to approval.
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