Card issuers and lenders have more confidence in lending money to a senior borrower than to a subprime person, because prime applicants are statistically less likely to default or not make their payments. And even if a prime borrower and a subprime borrower both qualify for the same credit card or loan, the primary cardholder will most likely receive better terms, a higher credit limit, and a lower rate. lower interest.
In fact, having super prime credit can save you over 3 times on interest payments.
So that you can compare your own finances to the average primary borrower and see how you stack up, CNBC Select looked at average credit score, income, and debt. Using data from Experian, one of the top three credit bureaus, here’s a look at key US consumer data.
Overview of a primary borrower: their credit rating
- Poor: 300 to 579
- Fair: 580 to 669
- Well: 670 to 739
- Very good: 740 to 799
- Exceptional: 800 to 850
If you have prime credit, chances are you will fall into this range. According to Experian’s annual consumer credit review published in January of this year, a quarter (25%) of Americans had a “very good” credit rating in 2019.
Learn more: 50% of Gen Z have a top credit card and credit score, and they are more credit active than Millennials.
Having good or great credit will help you qualify for the best credit cards, many of which now offer limited time welcome bonuses. These are great opportunities that can save you money now and in the future, especially on travel.
For example, Chase just released a huge bonus of 80,000 points for the Chase Sapphire Preferred® card – the highest bonus offer the bank has ever offered for this card. New Sapphire Preferred cardholders can earn 80,000 bonus points after spending $ 4,000 on purchases in the first three months of opening the account. This is 20,000 more points than the previous offer and is worth up to $ 1,000 when you redeem points for travel through Chase Ultimate Rewards®.
The popular travel card also rewards you for your purchases. Find out if you’re eligible for the new, limited-time, 80,000-point Chase Sapphire Preferred welcome bonus here.
Chase Sapphire Preferred®
On the secure Chase site
5X points on Lyft journeys through March 2022, 2X points on travel and restaurants worldwide, 1X points on all other purchases
80,000 bonus points after spending $ 4000 on purchases in the first 3 months after opening the account – up to $ 1000 worth while traveling when redeemed through Chase Ultimate Rewards®
Variable from 15.99% to 22.99% on purchases and balance transfers
Either $ 5 or 5% of the amount of each transfer, whichever is greater
Another option to consider is the new 100,000 mile welcome bonus offered by the Capital One® Venture® Rewards credit card for a limited time.
Like the Sapphire Preferred card above, the Venture Rewards card also offers rewards on your purchases. Since travel has slowed during the coronavirus pandemic, new cardholders can also redeem this bonus for statement credit to cover their expenses on food delivery, take-out and streaming services.
Find out how to earn his new welcome bonus offer here.
Capital One® Venture® Rewards credit card
Capital One® Venture® Rewards credit card information was independently collected by CNBC and was not reviewed or provided by the card issuer prior to posting.
5X miles on hotels and rental cars booked through Capital One Travel℠, 2X miles per dollar on every other purchase
100,000 bonus miles when you spend $ 20,000 on purchases in the first 12 months after opening the account or earn 50,000 miles if you spend $ 3,000 on purchases in the first 3 months
N / A for purchases and balance transfers
17.24% to 24.49% variable on purchases and balance transfers
3% for APR promotional offers; none for balances transferred to the regular APR
Overview of a primary borrower: their income and debt level
Major borrowers have, on average, an estimated annual income of $ 98,206 and an average total debt of $ 110,110, according to Experian data for the first quarter of 2020.
It may at first seem surprising that consumers with good credit are in debt. Debt is undesirable, but borrowing at good rates can be an important part of a financial plan. Over time, you can use your assets, like a house, to increase your wealth.
And it is actually important for your credit score to have a combination of credit accounts. Your credit combination makes up 10% of your FICO credit score, so making on-time payments on everything from credit cards and student loans, to car payments and a mortgage, shows you can handle it successfully. different types of debt.
Experian has provided the following additional data for the average primary consumer:
- Credit cards: 4.5
- Credit card balance on all cards: $ 6,236
- Additional Retail / Store Credit Cards: 3.4
- Retail / Store Credit Card Balance for All Cards: $ 952
- Student loan balance: $ 37,705
- Automatic scale: $ 19,889
- Mortgage balance: $ 216,070
In reviewing this data, it’s important to note that with a higher credit score, you will likely be approved for credit cards with higher credit limits. This means that you can keep a balance on your credit card month after month while maintaining a low rate of credit usage, which helps maintain a stable score.
While this can benefit senior borrowers, it’s still ideal to pay off your credit card bills in full when they’re due.
The average credit score of a subprime borrower is 578 – here is the income and debt they have
From super prime to deep subprime, here are 5 credit score categories you need to know
Editorial note: The opinions, analyzes, criticisms or recommendations expressed in this article are those of the editorial staff of CNBC Select and have not been reviewed, endorsed or endorsed by any third party.