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. Credit cards are classified 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. Plus, sign-up bonuses and monetary incentives to get Tier I cards are scarce.

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 rewards become commonplace. But annual fees are rare as most Tier II cards have none. 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.

Furthermore, co-branded airline and hotel cards start in Tier II but are uncommon. Many of these cards are stripped down versions of higher-tier cards.

Most cards from this tier are long term keeper cards because they have no annual fee and earn rewards. Some 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.

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 rewards give way to points and miles. Large sign-up bonuses are also the norm here, even though not all cards come with them. However, cards in this tier have annual fees of around $100.

Plus, Tier III is the “sweet spot” for business cards. Business owners get both excellent perks and earning structures for a modest annual fee. Plus, there are very few business cards that reside in higher tiers.

Furthermore, 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.

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 and great earning structures.

Most cards in this tier come with at least one travel credit that helps to justify the high annual fee. 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 vacations and trips better.

However, issuers such as Chase and American Express are starting to change the perks of their premium cards because of the COVID-19 pandemic. New perks are oriented towards dining out and groceries than travel.

Co-branded cards are limited in Tier IV. But those that are specialize in luxurious hotel or airline specific perks. These cards do not have as many “general travel”, food, grocery, or lifestyle perks as their general brethren.

Moreover, there are only a few premium business cards on the market today, giving American Express a monopoly within that niche.



Tier V: Invitation-Only Cards

Tier V houses invitation-only credit cards. Only a handful of cards around 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.

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 $5,000 annual fee and a $10,000 initiation fee as of April 1, 2020 . 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

Diversification is the main the takeaway of this post. 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.