You may have heard various credit cards or credit card issuers described as “prime” or “sub-prime.” While there are no exact standards, there are general differences between these categories.
Prime:
* Requires good credit
* Lower interest
* Higher credit limit
* Lower or no annual fee
* Lower “nuisance fees” (e.g. late or over-limit
fees)
* Possible rewards, like frequent-flyer points
* Low-rate balance transfer offers
* Convenience checks
* Grace period on purchases
Sub-Prime:
* Some bad credit acceptable
* Higher interest rate
* Lower credit limit
* Higher annual fee
* Higher “nuisance fees”
* No rewards
* Possible application and setup fees
* Possibly no grace period on purchases
While some credit card issuers specialize in one of the two segments (First USA=prime vs. Cross-country=sub-prime), others have both types of products.
