Not all credit cards are created equally. This is because different cards have different purposes and earnings structures. With this notion in mind, I have created a system that separates our plastic (and metal) purchasing tools into five card tiers. Tiers are based on annual fee, type of rewards, and number of perks.

Most people start (or restart) at either Tier I or Tier II. This is important because you need a foundation to support cards from a higher tier. The foundation increases your average age accounts and chances to earn rewards for no annual fee. It also increases your credit score and chances of getting approved for higher tier cards.

Hat Tip (H/T) to The Credit Shifu and Sebastian from Ask Sebby.


Tier I: Starter Cards

The lowest tier houses secured cards, balance transfer cards, starter cards, and subprime cards. Most cards in this tier don’t have rewards or annual fees. You also won’t find any sign-up bonuses or monetary incentives to get cards in this tier.

Predatory cards like those from Credit One (which is NOT the same as Capital One) also appear here. These cards have annual fees, several random fees, and horrible terms and conditions.


  • Capital One Platinum Card
  • Chase Slate
  • Discover It Secured Card


Tier II: No-Annual Fee Cards

Tier II is where rewards become commonplace and annual fees are rare. Cash back is the most common type of rewards, but points and miles can be earned too. Sign-up bonuses are normal in this tier. They are smaller and easier to earn than those from higher tiers.

Student cards with rewards fall into this tier as well. Like their non-student counterparts, these cards have rewards and no annual fees. And oftentimes they can be converted into non-student cards.

Co-branded airline and hotel cards start in Tier II but are uncommon. Many of these cards are stripped down versions of Tier III and IV cards.

Many cards from this tier are long term keeper cards because they have no annual fee and earn good rewards. A lot of people only have these cards, especially if they don’t like annual fees. But those who travel often will keep these cards as supplementary cards that will help them earn more rewards.


Tier III: Mid-Tier Cards

This tier could be considered the heart and soul of Play Your Cards Right. That’s because cash back rewards give way to points and miles. Tier III cards have annual fees of around $100 and come with significant rewards. Large sign-up bonuses are also the norm here, even though not all Tier III cards come with them.

Tier III is also where you see most co-branded airline and hotel cards appear. Co-branded cards usually have the characteristics of a Tier III card given their annual fees, earning structures, and perks.



Tier IV: Premium Cards

Tier IV is the highest tier in which you can directly apply for a card. Cards in this tier have annual fees of around $500.

Perks are the name of the game in Tier IV, even though nice earning structures are still present. Tier IV cards are great for travelers who want to make their vacations and trips better. Co-Branded cards are limited in Tier IV. But those that are in this tier specialize in hotel or airline specific perks.



Tier V: Black Cards

The apex tier houses invitation-only credit cards. Only a handful of cards around the world are exclusive enough to make this tier. Perks and benefits rule Tier V as that’s what these cards are meant for.

The American Express Centurion Card (AKA the Amex Black Card) and the JP Morgan Reserve Card are the two most exclusive credit cards in the United States market. But there are other cards like them from other countries.

The former offers the perks of the Amex Platinum and then some. It has a $2,500 annual fee and a $7,500 initiation fee. The latter requires $10 Million in assets as a Private Reserve client at Chase / JP Morgan. I have heard that this card is almost the same as the Chase Sapphire Reserve.


Final Draw

The takeaway from this post is to diversify your cards. This way, you can have the perks, rewards, and account history from multiple cards. Diversification is especially important if you’re a traveler or want to take full advantage of rewards.

My recommendation for cash back lovers is to stay in Tier II. This is because that’s where the most rewards are for you. Otherwise, I suggest getting some “foundation” cards from Tier II before getting cards from a higher tier. You can go for the rewards and perks after building the foundation.

Just because a card is in a higher tier, doesn’t mean that its right for you. You’re mileage may vary.