Best Credit Cards for Good Credit

When you have good credit, the credit card world gets a whole lot bigger. You’re no longer limited to just the credit cards for bad credit or no credit history at all, which means you can start looking at ones with much better benefits. But you’re also in a bit of a middle ground. There’s still the possibility that a bank decides your credit score isn’t enough for the card you want, and it’s hard to know exactly what you’ll qualify for.

The good news is that you’re in the home stretch, and if you stay on the right track, you’ll get that excellent score and all the opportunities that come with it. To help you along the way, I’m going to cover credit cards for good credit and how you can give your score one last push over the finish line.

According to the FICO® guidelines, a good credit score is between 670 and 739. The full range of credit scores on that scale goes from 300 to 850.

You likely have a good credit score if you’ve been responsible with your payment history and credit utilization, but have only been using credit for one to two years. You may also be in this range if you’ve been using credit for longer than two years with the occasional issue, such as one missed payment or credit utilization that’s higher than the credit bureaus like (keeping it under 30% is the usual recommendation).

Remember that even though there are these credit score ranges, what matters most is your exact credit score. While scores of 675 and 730 both fall under the good credit score range, the latter would help you get better terms on a mortgage and improve your odds of approval on credit card applications.

Or, “What’s the secret behind how some applicants get approved with lower-than-recommended credit scores?”

There are three ways you can give yourself a better shot at the more exclusive credit cards:

• Reduce your debt-to-income ratio -- Your debt-to-income ratio is all your monthly debt payments compared to your income, and it’s best if you can keep this below 35%. While this comes into play more with mortgage applications, it can also help you when you’re applying for a credit card. Even if your credit score is a bit less than what the card issuer would like, a low debt-to-income ratio could convince them that you’d be a responsible cardholder with a good amount of disposable income.
  
• Minimize your credit inquiries -- Card issuers can get cautious when you already have multiple recent hard credit inquiries, as they’ll wonder why you’re trying to get all this new credit and if you’ll be able to handle it. An approval is more likely if it has been at least three to six months from your most recent credit card application.
  
• Be persistent -- The difference between a denial and an approval occasionally boils down to contacting the card issuer a couple times. Consumers who are willing to call the reconsideration line after a denial may see the decision reversed. Even if one representative tells you no, you could have better luck if you call again later.

If you want a card and you’re not quite sure that your credit score is good enough, I’d still generally recommend applying.

The logic here is that one application, whether it gets approved or denied, won’t do much damage to your credit score. The average impact is a 5-point drop that’s gone in six months to a year. In most cases, it will take that long to make an appreciable increase in your credit score, anyway. You might as well roll the dice and see if you can get an application approved first.

There are a couple exceptions to this strategy, though, where I’d recommend waiting.

When your credit utilization is over 30% and you can pay it down

Paying down high balances is the closest you can get to supercharging your credit. Here’s why:

• Credit utilization (debt divided by available credit) makes up 30% of your FICO credit score.
  
• Card issuers report your credit utilization every month so there can be a near-term impact.
  
• Only your current credit utilization affects your credit score.

Let’s say you have high credit utilization impacting your credit score, but you also have the money to pay down your balances. You go from 60% utilization, which is very high, to 10%, which is ideal. When your card issuers report your new-and-improved utilization, your score could go up.

Considering how quickly you can improve your credit this way, it makes sense to do so, and then apply for a credit card with that higher score. How long should you wait? After you pay down your balances, give it at least a month to ensure your issuer has reported your new credit utilization.

When you have one or more hard credit inquiries within the last three months

When you’re right on the edge of a card issuer’s qualifications, you don’t want to shoot yourself in the foot with hard credit inquiries. These inquiries become less of an issue the older they are, so a little patience can go a long way. Wait the three to six months I mentioned earlier so it doesn’t look like you’re desperate for credit.

Although there’s nothing wrong with good credit, it’s important to keep building it. An excellent credit score isn’t just a feather in your financial cap. You’ll have card issuers rolling out the red carpet for you with their best offers. And if you ever need a loan, you should qualify for the lowest interest rates.

At this stage of the game, you can damage your credit much faster than you can improve it, so avoiding mistakes is crucial. Your credit will improve if you:

• Avoid overspending -- Once you’ve reached a good credit score, you’ll start having access to larger credit lines. Don’t let those big numbers convince you to spend more than usual. It’s a mistake many consumers make, but if your balances get too high, it can lead to excessive credit utilization or an inability to make your payments.
  
• Pay everything by the due date -- Just one missed payment can undo all your hard work, and that’s a missed payment on anything, whether it’s a credit card, a cell phone bill, or an overdue library book. Organize all your bills and their due dates. I recommend setting up alerts on your phone’s calendar or putting together a spreadsheet you can use.
  
• Track your credit utilization -- My method for this is simple. First, add all your credit limits together to get your total available credit (services that provide your credit score will often include this information). Then, calculate 10%, 20%, and 30% of that number. This gives you guidelines on when your credit utilization is fine and when you’ll need to pay down your balances, even if it isn’t a payment due date yet.
  
• Keep your credit cards open -- Another common consumer mistake is closing credit cards for no reason. You’ll be losing that card’s credit line, so if you’re carrying balances on any other cards, your credit utilization will increase. While canceling cards isn’t always a bad idea, in most cases, it’s better to downgrade your card to an alternative with no annual fee.
  
• Don’t go on application sprees -- While one card application isn’t a big deal, one per month will keep you from making any progress on your credit score. You’ll have too many hard credit inquiries, and every time you’re approved for a card, your average account history will get lower.
  
• Guard your credit -- It doesn’t get much worse than doing everything right, only to have an identity thief or an error ruin your credit. And the longer it takes you to catch any such issues, the more difficult it is to fix the problem. I use a free credit monitoring service that lets me know whenever something changes on my credit report, and I love it. I advise everyone to sign up for one, and of course, you should also check your credit reports every year.

Perhaps the most common question among consumers who are working on their credit is: Which credit card will improve it the fastest? The truth, however, is that the credit card you have doesn’t matter. How you use it is what impacts your score.

On-time payments with one card aren’t any different than on-time payments with another card. Feel free to choose whichever credit card you want. If you use it correctly, your score can increase.

All said, it’s clear there aren’t cards that are great for building credit so much as there are cards that can be approved for people rebuilding credit with a low credit score. Secured credit cards are one such option that is available to people with no credit history, a low score, or if having declared bankruptcy.

A good credit score is something to be proud of. It signifies that you’ve been handling your money properly.

The two things to focus on when you have good credit are getting the right credit card and progressing into that excellent credit range. The right credit card will help you as you work towards your current financial goals, be they paying off debt or accumulating rewards. And once you have that excellent credit score, you’ll be in an optimal financial position, where you can qualify for the top offers and the cheapest interest rates.

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