Not all credit cards are created equally. This is because different cards have different purposes, perks, and earnings structures. A few years ago, YouTubers Credit Shifu and Ask Sebby (H/T) created videos detailing five credit card tiers. This five tier system divided credit cards based on annual fees, type of rewards, and perks. This post details my version of that system.

Most people start (or restart) at either Tier I or Tier II. This is important because lower tier cards form 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.


Tier I: Starter Cards

Tier I houses secured cards, balance transfer cards, starter cards, and subprime cards. Most cards here do not offer rewards or have annual fees. Sign-up bonuses and monetary incentives to get Tier I cards are scarce.

Plus, 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.

Examples of Personal Cards:

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


Examples of Business Credit Cards:

  • Bank of America Platinum Plus MasterCard Business Credit Card
  • Wells Fargo Business Secured Credit Card


Tier II: No-Annual Fee Cards

Tier II is where most no annual fee rewards cards reside. Most cards from this tier are long term keeper cards because they have no annual fee and earn rewards. Cash back is the most common type of rewards, but points and miles can be earned here too. Sign-up bonuses in this tier are smaller and easier to earn than those from higher tiers.

Furthermore, co-branded airline and hotel cards start in Tier II. Many of these cards are stripped down versions of higher-tier cards. They also serve as downgrade options from Tier III and IV cards.

Some people only have these cards and usually those who do either prefer earning cash back or don’t like annual fees. But those who travel often will keep these cards as supplementary cards that will help them earn more rewards.

Examples of Personal Cards:


Examples of Business Cards:


Tier III: Mid-Tier Cards

Tier III houses some of the highest earning and most valuable credit cards for travelers. Cash back gives way to points and miles. Large sign-up bonuses are also common, but not all cards offer them. Most cards in this tier have annual fees of around $100.

Plus, Tier III is a “sweet spot” for business credit cards. Business owners and entrepreneurs get both excellent perks and earning structures for a modest annual fee. Plus, there are not many business cards that reside in higher tiers.

Furthermore, Tier III is also where most co-branded airline and hotel cards reside. This is because most co-branded cards have the characteristics of a Tier III card given their annual fees, earning structures, and perks.

Examples of Personal Cards:


Examples of Business Cards:


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 and come with significant perks. Tier IV cards earn points and miles, but not like Tier III cards do. That’s because Tier IV cards are focused on luxury travel, perks, and credits.

Issuers such as Chase and American Express have changed the perks on their premium cards because of the COVID-19 pandemic. Since 2020, perks on general travel cards are oriented towards a luxury lifestyle as opposed to travel. Conversely, perks from Tier IV co-branded cards specialize in luxurious travel, hotel, or airline specific perks.

Most cards in this tier come with at least one travel credit that helps to justify high annual fees. Your mileage may vary with these credits because they are not all created equally. Nonetheless, Tier IV cards are great for travelers who want to make their trips better.

Moreover, there are very few premium business cards on the market today. American Express has a monopoly in that niche.

Examples of Personal Cards:


Examples of Business Cards:


Tier V: Invitation-Only Cards

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

Furthermore, 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 Amex Centurion Card offers the perks of the Amex Platinum and then some. It has a $5,000 annual fee and a $10,000 initiation fee as of April 1, 2020 . The JP Morgan Reserve Card requires $10 Million in assets as a Private Reserve client at JP Morgan Chase. This card is almost the same as the Chase Sapphire Reserve.

On the business side, the American Express Business Centurion Card is very similar to its personal counterpart. Both cards have the same initiation and annual fees. But the business version has a few other perks that the personal version does not offer. This is similar to the Amex Platinum and Business Platinum Cards from Tier IV.


Final Draw

In conclusion, the main the takeaway of this post is diversification. You can have a plethora of perks and rewards, as well as a long credit history from having a diversified collection of credit cards. Diversification is especially important if you’re a traveler or want to take full advantage of rewards.

Cash back lovers should stay in Tier II because that’s where the most rewards are for them. However, travelers should get some “foundation” cards from Tier II before getting cards from a higher tier. There is nothing wrong with staying in a lower tier, especially if you’re starting out or you want to minimize your annual fees.