Are you like most and thought premium credit cards were just for the rich and famous? Well, a few weeks ago, I helped a friend get approved for a card that he thought required a “high-six-figure income.”

His salary? $55,000. Today, I’m pulling back the curtain on what banks actually care about – and it’s not what you assumed.

Here’s the Reality:  banks don’t care about your wealth as much as they care about specific behaviors: 

1. Credit score – of course this will vary based on card issuer but banks want to see someone with a score of at least 720.  This is demostrates an example of your ability to effectively manage debt. 

2.  The next big requirement is “household income” but their definition of this is a bit broader than most would think.  They count your annual income as well as:

• Investments
• Side gigs
• Rental income
• Partner’s income

3. The third most important behavoir they are looking for is your debt to income.  Simple definition of this is how much debt you are carrying in proportion to your income.  Banks prefer you stay below 35% becasuse statically, the lower your DTI, the better chance you have of handling a high credit limit and not defaulting. 

Let’s break down my friend, Jeff’s, approval strategy. 

• He has an annual income of $55k salary with a credit score of 735
• His partner’s income is $65k for a total household income of $120,000
• His paycheck is direct deposited and he puts $500 per month into his Roth IRA along with investing into his employer matched 401K. 
• He has two other credit cards that he got when he was in college.
  • He’s careful not to overspend, so he can pay them off in full, every month. 
• This is his first inquiry in 24 months and his only other debt is his mortgage that he took out during the pandemic. 

He was approved for the Chase Sapphire Reserve with a credit limit of $30,000.

As you can see, Jeff is a pretty average guy that was approved without significant wealth and mortgage debt.  Yes, he is responisble with his money, which can be seen in his credit score and debt to income ratio but he’s not that different from most of us. 

A premium credit card was attainable and offers many benefits that Jeff can utlize like:

• Luxury Travel Perks
  • which gives him complimentary access to airport lounges, annual travel credits, expedited airport security

• Higher Rewards Rates and Flexibility
  • He now gets higher rewards rates on categories like travel, dining, and entertainment, which allows him to transfer those points to travel partners at favorable rates.

• Comprehensive Purchase and Travel Protections
  • He now gets benefits like primary car rental insurance, trip delay/cancellation insurance, lost luggage reimbursement and even cellphone protection. His other two cards offered limited travel insurance and their extended warranty and return protection had really low limits.

These perks are particularly valuable to Jeff can travel more often since his twins left for college and his hybrid work situation allows him more flexibity.

Tell me in the comments your dream card and why?  Thanks for reading and let’s keep Enjoying the Journey!