Best Credit Cards for Excellent Credit

When you have excellent credit, shopping for a new credit card becomes less stressful and a lot more exciting. Your credit score is the No. 1 piece of information banks will look at when you apply for a card, so you can expect to qualify for most of the best credit cards on the market. Instead of basing your decision on what cards you’ll be able to get, you can base it on what you want in a card.

An excellent credit score is a terrible thing to waste, so I’m going to cover assessing what you need in a card, some of the best credit cards you can choose, and how you can keep building your credit.

The widely-used FICO® scoring model goes from 300 to 850, and one of the major credit bureaus, Experian, considers an excellent credit score to be from 800 to 850.

Other companies have their own idea of what an excellent credit score is and set the bar lower, such as a score of 720 or 740.

Once you have an excellent credit score, the exact number is more important for mortgages than it is for credit cards. You probably wouldn’t receive a denial on a credit card application because your score is 750 instead of 780. Either number will be good enough for just about any card. But that 30-point difference could change your annual percentage rate (APR) on a mortgage, causing you to pay thousands more over the lifespan of the loan.

The basic idea behind taking advantage of an excellent credit score is that you leverage your score to improve your financial situation. How you do this will depend on what your current money goals are, but I’ve outlined your main options below.

Max out what you earn on your spending

If you don’t have any high-interest debt to pay off, then you’re free to focus on maximizing what you earn from your credit card. You can choose whether to do this with:

• Travel rewards cards -- These will earn points that you can redeem towards travel purchases.
  
• Cash-back cards -- These will earn you money back that you can redeem as a statement credit or check.

Carrying multiple cards

Contrary to the popular misconception, having multiple credit cards isn’t bad for your credit score. And with an excellent score, you have a good chance of getting approved for multiple cards.

How does having multiple credit cards help you earn more back? The first way, and the most significant, is the signup bonuses. It’s simple math - - getting four 50,000-point signup bonuses beats getting one. Those bonuses are how even someone relatively frugal can collect enough points to pay for all their travel.

The second is mixing and matching cards based on which cards earn the most back in each spending category. Since there are so many cards with different rewards rates, combining cards like this can help you earn much more on your everyday expenses. Here’s an example of how this could work with cash-back cards:

• Bonus category cards earn premium rates for specific purchases and a common 1% base rate on all else. Therefore, you can carry one card to earn premium rates in bonus categories and 1.5% cash back (a common yield for flat rate cash back cards) on all other purchases.

That example uses cash-back cards, but you could do the same with travel rewards cards.

You should exercise caution here, as more credit cards means more to manage, and one late fee can wipe away a lot of hard work. But if you’re willing, multiple cards can pay off.

Refinance your debt

If you have debt, your credit score can help you refinance it, so you pay less in interest and only need to make one payment towards it per month. The two most common financial tools for this are balance transfer credit cards and personal loans.

With a balance transfer credit card, you can move all your credit card debt to one card. Although you’ll typically pay balance transfer fees for this, the best balance transfer cards offer low intro APR rates, sometimes even at 0%, so you’ll have time to pay off what you owe without accumulating any more interest.

A personal loan allows you to pay off any existing debt, and then pay the loan off in equal installments. There aren’t any 0% APR offers, but the best personal loans do offer low interest rates. And unlike credit cards, personal loans don’t require you to transfer balances or pay balance transfer fees.

Finance a purchase

I usually don’t recommend financing large purchases, as I’ve found it’s better to save enough money to pay for what I want outright and avoid the debt entirely. But if you really want or need something that’s out of your budget, you can apply for a 0% APR credit card and put the purchase on that.

The 0% APR will only be the intro rate (no bank would have much success offering 0% APR indefinitely). This means it’s imperative that you’re able to pay off your purchase in full before that intro period ends.

This may seem a bit redundant, but there are situations where you’d want to improve an excellent credit score. Maybe you’re planning to apply for a mortgage, or you could just be in pursuit of that mythical 850.

If your score is in the mid to high-700s, you probably already have a rock-solid payment history and low credit utilization. At this point, you’ll need to focus on those factors that make up a smaller portion of your credit score, which are:

• Length of credit history -- 15% of your score
  
• Recent credit inquiries -- 10% of your score
  
• Types of credit used -- 10% of your score

The optimum strategy is to keep new credit applications to a minimum (avoid them entirely if you can). You won’t add any credit inquiries this way, and you also won’t add new accounts that decrease your average account history length.

While you can diversify your types of credit by adding a loan to the mix, it wouldn’t be wise to do so solely for this purpose, because you’d need to pay interest on it for a minor bump to your credit score.

If you’re satisfied with your credit score and just want to maintain it, then you’ll be fine applying for new credit as you please. The hard credit inquiry will have a negligible impact on your score, as the average drop is a mere five points. Your credit score can bounce back from that within a matter of months.

There’s no secrets needed to get a high score or to keep one. The only two financial habits you need are on-time payments and low credit utilization.

One of the biggest perks of an excellent credit score is that when you apply for a new card, the odds are in your favor. But no credit score guarantees you a successful application. To help you avoid situations where you receive a denial despite a high credit score, it helps to understand the most common reasons that would happen:

• Insufficient income -- Card issuers will only extend you so much credit based on your income. If the minimum credit limit on a card is more than what the card issuer is willing to issue to you, then they won’t approve your application.
  
• Too much credit extended already -- When you have one or more credit cards with a card issuer, there could come a point where they’re unwilling to issue you any more credit. One method to get around this that has worked for me is asking a customer service representative to reduce the credit lines on my other cards, and then put that available credit towards the new card.
  
• Too many recent credit inquiries -- Card issuers get wary when they see several recent credit inquiries on your file, because there’s the risk of you either racking up huge balances you don’t pay or getting a card’s sign-up bonus, and then canceling the card. What constitutes too many inquiries varies by card issuer, and some are believed to have their own internal rules about this.
  
• Too many cards opened recently -- Closely related to the reason above, this is another area where card issuers seem to have their own internal rules that come into play. A confirmed restriction is Chase’s 5/24 rule, which automatically denies your Chase credit card application if you’ve opened five or more credit accounts in the previous 24 months.

As you can see, most of these issues relate to applying for new credit cards frequently, and you’re unlikely to run into any of them if it’s your first application in some time. The only exception is insufficient income, but you can get most credit cards with an annual salary in the $30,000 to $40,000 range, and potentially even less.

What to do if your application is denied

For one reason or another, you’ve probably seen the dreaded “We’re unable to approve you for a credit card at this time.” It’s even more frustrating to read this when you know you’re an ideal client, but it’s not the end of the road.

Whenever you have a denied application, you should contact the card issuer’s reconsideration line and ask them to take another look at it. Be sure to mention everything that demonstrates your financial responsibility -- never missing a payment, paying your bill in full, and so on.

With any luck, the representative will push your application through. If not, you can always call back and try again. The worst that can happen is they’ll say no, so this is a no-lose scenario.

I’m not saying you should go out and apply for a dozen credit cards, but if you have an excellent credit score, you should absolutely get at least one card that helps you reach your financial goals. That could be paying off debt, or you could pick up a travel rewards card that helps cover your next vacation.

Card issuers want nothing more than for consumers with excellent credit to apply for their cards. They’ll offer benefits and bonuses worth hundreds of dollars or more just to get your business. When you know how to handle credit, you can cash in on your credit score.

To recap, here are the best credit cards for excellent credit