What's up you guys, sasha here now in this video, i want to talk to you about how you can go and climb the credit ladder exactly how long some of these processes will take, how you can qualify for better products over time. What products are available at the different stages and tell you exactly? I can go from basic entry-level credit cards through to the most prestigious the most fancy, the best credit cards out there and the steps in between and what you'll get at every stage now been at credit street food that you might have heard of it's a very Big us-based credit channel on youtube, go and look him up if you're interested i'll also put a link below to the video that i'm referencing put out a video a few years ago, where he talked about exactly this and actually very recently, he went and updated it And he talks about a specific tier-based strategy. It's very simple and i really liked it it's really clean, but he talks about the same kind of thing for the us market, and so when i saw that when i saw that he updated it, i kind of thought. Well, it would be really interesting to do exactly the same thing for the uk market instead, so that's what i'm going to do, i'm going to walk you through exactly all the different credit cards in the market that i would classify into these different things.

Tell you some interesting anecdotes, so, let's jump right into the first tier and the first tier is what is commonly known as near prime credit cards. Now, really, really simply the reason that they're called near prime and the reason that subprime credit cards don't really exist is because of the way that the credit card commercial model works. There is a certain risk level, a certain level above which, if a customer's likelihood of default is too high, it is impossible to create a credit card that would actually be able to be priced effectively for that level of risk. That's the reason why you don't really have subprime credit cards anywhere that actually target real supreme customers when people talk about separate credit cards, they talk about this near prime segment.

So what i mean by that is typically you'll see credit cards that are priced up to sort of like 30 to 35 percent territory in terms of the advertised rate and then for the high risk customers that get accepted. That rate can be as high as 60 to 80 percent, but there's no credit cards that will offer you 1 200 percent or five thousand percent, or anything like that. That you'll see with some of the loan products and the reason is a credit card - works in a fundamentally different way to the way that a loan works and it just wouldn't work in those segments. So that's the highest risk.

That's the lowest level that you can enter the credit card spectrum at now. There's several different players in there there's aqua they offer aqua classic and aqua advance. They also do the amazon classic cars and they do other products like marbles opus and fluid. There's um tesco foundation, there's vanquish.

They do several different brands. Again they do vanquish origin aqueous. In the past, they've used lots of other ones like black diamond or granite. Then there's capital one classic.

They also do ocean finance, which is the same car just under a different brand. Then there's the 118118 money credit card, which is interesting. They don't do any fees, unlike all the other ones, but the same sort of interest rate. Then there's barclaycard forward now barclaycard have been talking about doing near prime credit cards for some time, but they were always not quite there, but recently they've crept down further and further and further, and their forward card is very similar to the aqua advance card and that, If you make payments over time, then what will happen is your rate will reduce.

They tell you they'll, reduce by three percent in the first year and then reduced by two percent in the second year aqua used to do five percent per year from the starting rate. If you continue paying on time, but if you look at their website for the aqua advanced today, it doesn't actually anywhere say how much it reduces by it doesn't say on any page when you're looking at it, it doesn't say in the terms conditions, it doesn't say In the summary box, i looked so exactly how much you reduce it by is a mystery. They just tell you that it will reduce by some amount anyway. What will happen with these is you're, not gon na get any perks whatsoever, you're going to pay 30 to 35 interest.

If you choose to pay interest by not paying the car in full so because that's really expensive, it's just a really really bad idea to use. One of these credit cards for actually borrowing money - if you are new to credit, if you wanted to build credit, if you had credit issues in the past, you might want to go and get one of these credit cards in order to build credit. So just getting the card putting some spending on every single month then repaying it in full. Without ever paying any interest will build your credit and it will enable you to climb the ladder whether you knew whether you've had issues in the past.

It will help that's how credit builder credit cards work. That's why they're often referred to as credit builder credit cards now tier 2. We have basic credit cards and in the past there used to be way way more of these. Today there aren't as many and certainly if you look at comparison websites, you pretty much, won't see any of these because they're just vanilla, they're neutral, they don't really do anything.

They don't have any features. They don't have zero percent terms. Some of them do some of them have short to zero percent terms for like six months, sometimes nine months, but there's no specific feature for advertising them they're. Just like the most basic usual credit card, you'll have but they're a bit better than the ones that we were talking about in tier t01 and typically, the way you'll find them is.

If you just go to a website of a big bank, let's say hsbc you'll be able to go and click on credit cards and see like one of these credit cards in there they're, typically like priced 18.9 to 23.9 percent, or something like that. They give you pretty much, no perks, very, very limited, sometimes like a zero percent on purchases for a short period. Their credit limits will probably be somewhere like one and a half to five thousand pounds or they're about so it's enough for most people for like regular everyday shopping over the course of the month. So if you repay it in full, then that's probably enough for just buying food buying petrol and paying for some bills um for most households.

So so that's pretty good um! You probably should go to your own bank to go and see if they offer it. There's no real difference between them, but with your own bank, you're more likely to actually be accepted and qualify. Now, if you're moving up through the tiers - and you start to say with um no previous credit history, you will probably need to hold your aqua card. Tesco foundation by clicking forward cap, one classic any of those credit cards.

Uh, i've forgotten a few of them um for at least a period of 12-20 months before you're going to be able to qualify for one of these, and that's because a lot of the metrics that these credit card companies use will go at least 12 or 18 Months in the past, in order to be able to see your trajectory and your progression and your ability to make repayments on credit in some cases, if you've had phone contracts, if you had a current account with an overdraft, that might not be the case, and you Might be able to condense it a lot more make sure you stay on top of things by setting up an account with something like clearscore and checking regularly on various comparison websites, because not all of these different comparison websites operate with all the different products. So you need to go and shop around a little bit, but with soft check you can do that every now and then to see when you do actually end up qualifying, i'm just talking about. On average, now there used to be more of these products because of the downturn and the economic situation. A lot of banks pulled out of these vanilla products because a lot of the customers sitting in this sort of don't quite qualify for tier three products, but are a little bit above the tier 1 products.

The likelihood is that if the situation goes and worsens and more people lose their jobs and there's a massive economic downturn in the next few months, then these customers are likely to go into a much higher risk profile. So, instead of them being, i don't know, let's make up a number - let's say four or five percent likely to default - maybe they're going to go and have a 10 or a 15 likelihood of default. So if you're only charging 18.9 interest on those customers and their risk of default goes up considerably and you have all the costs on top and the cost of operating the product, the cost of funds, etc, etc, etc. Then, suddenly this product will not be viable.

So a lot of banks, a lot of credit card companies have actually pulled these products, so there's not that many of them. Usually this is a huge proportion of the overall portfolio of credit cards um. It's definitely windowed down a little bit. So, let's talk about tier three tier three is what you hear about the most.

This is like the most popular thing that people like martin, lewis and other websites talk about. This is all your rewards, credit cards and sort of the depth debt shifting debt, whatever debt. Shifting credit cards, so what i mean by that is all the kind of balance transfer credit cards where you're moving a debt from one credit card to a different credit card, because it's cheaper and you're able to say for 12 18 24 months. However long you get on it to not pay any interest and just pay that one off three percent or four percent fee there's also the money transfer credit cards which again is sort of like shifting debt.

Typically, you'll move money to your current account, so that then you can use it to repay something else or to make a purchase, but then that money transfer after some directory period and most cases will still be charging you interest. So there's those types of like sort of zero percent credit cards on money transfers, balance transfers. Some of them will offer you zero percent on purchases for a fixed period. That's just trying to encourage you to go and spend right up to your credit limit over the first three months.

Typically, and then, once you have that balance, then the balance will stick around and after your zero percent promotional period ends. However long you have 12 18 again 24 months or maybe longer in some cases, it depends when you're watching this video um, then you'll notice that suddenly the balance hasn't reduced by as much as you thought it would and you probably went and spent on it after The first three month period as well, and then you can be paying a lot of interest on that now. The rewards side, i'm gon na, come to the more popular, the sort of like the very fancy rewards cards in just a second but sort of everyday regular loyalty. Rewards cards probably fall into the spectrum as well, so you're talking like all the sort of supermarket, rewards and loyalty programs that come with a credit card and but the two best ones in this space are the ones i mentioned a few videos ago.

They're, the two cashback reward credit cards by american express they're very, very similarly named they're, both platinum. They both look pretty much identical. One comes with an annual fee of 25 pounds, the other one does not for people who spend more, and especially in the first year, the 25 pound card makes more sense. You've got to go and make your own mass decision as to which one you'd prefer, just by way of a really quick disclaimer.

I am not a financial advisor. I know nothing about you, so i can't provide financial advice to you. If you do need financial advice, please go and seek it with a suitably qualified professional. All of this is just my personal opinion.

I'm just telling you what i kind of think about these products anyway. So if you're looking for a rewards card, i i would say those two american express cards today are far beyond far better than pretty much any other offering in terms of what you're able to get go and watch the video that i'm going to go and link Up here and in the description below for the details as to exactly how good those amex cards are and why somebody might go and consider them, i actually don't benefit whatsoever from recommending them. In fact, american express doesn't like me because i've previously made some videos that weren't as complimentary about them, but anyway, i think i think these are very good. Maybe they won't stick around too long, so maybe we won't have them um soon either, and then there will be no good rewards cards in the uk at all.

So, let's move on to tier four now tier four is sort of the premium credit cards that are available to me, immortals, like you or me, and the reason that they are available to me immortals is when i come to tier 5, i'll explain to you that Regular everyday people can't even get those credit cards, but let's come to that when we come to that, let's talk about tier four, so these are the current credit cards where typically you'll be paying a fee and usually that fee will be quite high. So, for one good example is the tesco club card plus credit card. They used to have the tesco premium credit card that charged an annual fee. Now they have this other card that is linked to their tesco club card plus program within their supermarket and you're paying 7.99 per month, and you get a bunch of perks with it.

You get perks for shopping benefits and whatever they bundle into that. So that comes out quite a lot because that comes out at what is it 80 plus 40 94 pounds a year? So that's quite a lot of money to be paying for a credit card alternatives. Are you have the ba amex so what i've got here? 5. 000, pounds avios.

If you spend 1 000 pounds in the first month three months, i'll, have the information up here and then you also get one obvious point per pound spent. So if you like your air miles that might be worthwhile, especially especially given the tesco have just literally this morning, i received my letter about the fact they're pulling out of working with avior, so you can't exchange your tesco club card points for avios any longer. So, if that's what you want to do, maybe you want to get the ba amex. Instead, other products include the amex gold credit cards.

Now don't confuse the credit cards provided by amex with their charge cards, they're, fundamentally different products, and they work in different ways, but the amex gold credit card is definitely in that premium sector you're paying 140 pound fee per year. It is free in your first year. It's waived, but from your second year onwards, you'll be paying it from the beginning of that year. So the moment your 12 month period strikes that's where you're going to begin paying it.

You get perks like 10 000 points. Um rewards points for 3 000 pounds spent in your first year now. That sounds like a lot. 10 000 points it's actually equivalent to about 50 pounds worth of benefit, so you've paid 140.

You get 50 pounds back through those points in the first three months or whatever it is that you have to spend at 3 000. So then you do get other perks like you get an ability to go on, accrue points for further spending through the year. You get other benefits to do with travel, to do with actually being in airports - probably not very useful, probably not very applicable today. So if that's what you're looking for uh, maybe you want to wait it out until those perks are actually worth something? Maybe you travel all the time, even during this period i don't know it's kind of up to you um charge cards again.

I did say that they are different, but american express do do charge cards that kind of fall into the same category, so you're paying a huge amount of money. So a good example is their platinum charge card you're paying 575 pounds per year, and for that you get 150 worth 150 pounds worth. So it's 30 000 points if you spend 4 000 pounds in the first few months and and that's kind of cool, except for there's still another 400 plus pounds worth of fees that you've handed over. On top of this perk that you need to make use of and they do offer a lot a lot of travel related benefits, so travel insurance you've got hotel, tiers and car rental tiers.

So if you go and stay in a hotel or if you're going to rent a car, you get upgraded. If you have one of these cars to the next room or to the next car level, it doesn't always work as well. As you think, i've tried it. Um, i probably should make a video at some point about that, but anyway get access to premium, lounges and airports.

You get the platinum concierge where they can get you tickets to things that nobody else can get tickets, for they can make you that unique reservation and restaurant that is completely booked up for tonight. Allegedly, apparently, i don't know it's very expensive. It gives you a lot of perks, probably not very useful this year. So again it depends on whether or not you think you use them.

Natwest reward black is another card. The same card is offered by rbs as well: they're the same the same bank, so you pay 84 pounds fee and you get some benefits like 0.5 percent cashback, one percent in supermarkets and a 5 000 pound credit limit as a minimum. So that's nice! Then you have the santander world elite, it is 15 pounds a month. So that's always that's! 180 quid a year! That's a lot of money and you get travel insurance.

You get lounges! You get 9.5 cashback. Only up to a maximum cap of 15 pounds a month see see like they don't want to give you more money than the amount you're paying them so you'll never actually see that cash back just your fee will essentially be covered uh. That's quite that's. Quite quite funny, and then you also get no forex fees.

The truth is the vast majority of these cards offer you no real benefits above the tier 3 cards. Tier 3 cards still offer you some of the travel perks. In some cases, tier 3 cards still offer you cash back and other stuff other. If you want it, these cards are really there for people who really want to kind of show off the fact they have the most premium card out there.

In most cases, you can get the same perks for much better value somewhere else. If you really do travel a lot and you can really make use of all of those things that some of these cards offer. There is a potential argument, but with some of these, the benefits are really just not worth the huge, astronomical fees that you're paying for them. You can go and get travel insurance policy for 30, 40 50 pounds for your family.

If you want it um the rest, you can get with a card that costs no no monthly or annual fee whatsoever. Anyway, let's, let's move on to the to the next tier tier number, five on my list um, this is the so i probably collectively will call them the black cards. Now a lot of people have heard of them, but the truth is, you can't actually go and just find them and apply for them that doesn't exist with some of them. Just they just alright say you can't apply.

You have to be invited with some others. They say: well, we don't currently accept applications, except they always say that and there's just no way of applying with others. The criteria for applying are so bonkers and so insane that most regular people would never in their lifetime ever hope of qualifying. Let me tell you about some of the examples, so barclays infinite it is as mysterious as it is rare.

I've never actually seen one in real life. It only has 150 pound per year fee, so that's pretty low, but it does have the same usual bunch of perks and benefits in exchange. For you holding at least 50 000 pounds worth of investment or balance on a current account with barclays. And even then you can't just qualify, you have to have your banking relationship manager or somebody go and invite you to this exclusive club.

Next up is the centurion credit card. Now this is the one that everyone's probably heard of this is the sort of the invite. Only the unique american express credit card that only select spenders get to have. It is made of titanium, which is an extra perk, because if you particularly dislike your wallet - and you want somebody to go and get you a new one for your birthday, that titanium card will be extremely good at cutting it up double quickly.

So that, then, you can show the tears to your girlfriend, wife, mother, grandmother or whoever it is that buys you wallets for your birthday. I don't really understand why you would want a titanium credit card. I mean it's gon na just be heavy. It's gon na tear stuff.

I i don't. I don't get it. I don't really understand exactly what it is useful for, but some people like it. Some people really like to show their friends that they're so wealthy.

They have a titanium credit card. The way you get invited to it is it depends on which website or which reviewer, which person you believe it is somewhere between 350 and 500 000 dollars that you have to spend on some other american express credit card in the preceding year. In order for them to then consider inviting you to this prestigious club and it's the same around the whole world, this is a global kind of card. You get to pay 10 000 as the initial fee for just joining, and then you get to pay 5.

000 per year after that, for the privilege of being able to use this credit card. So if you do want that titanium credit card, titanium is expensive. These days you know they do make tennis rackets out of it, but for credit cards it's is it. I think it's this extra premium titanium, that's going to cost you that just little bit more now, the last one on my list here is the kutz silk credit card.

It doesn't have a fee uh, it is absolutely free, but you can't quite just go and get it. There are some qualifying criteria that they actually to be fair to them. They are very open, they're, transparent on their website. They tell you exactly what it is that you have to hear to get it.

It's very simple: you either have to have an annual income of over 500 000 pounds paid into your current account, for which you also have to be invited and accepted into or just really really easily go and invest at least one million pounds into kutz savings, and One of those two criteria: if you fulfill it, will qualify you for their credit card that could silk credit card. Maybe it's not made of silk again. I've never seen one uh, but but we shall find out one day, maybe if, if, if i actually go and bother researching this and actually seeing somebody use one for for real anyway, i hope you guys found this useful if you're interested in progressing through the stages. The one thing i didn't really talk about, typically speaking, it takes probably about 12 to 18 months to go and progress from the initial to tier 2 credit card and from then on you're, probably looking at 12 to 24 month windows in order to go and improve, And the reason for that is some of the metrics that credit card companies use to try to assess your behavior are going to be weighted towards the 12 to 18 month mark in terms of the more important, the more crucial variables and the less important variables are Going to be covered over the last 36 months, so, typically speaking, you probably can get to the tier 3 tier 4 products by some point sort of um two to three years after you start building your credit history.

Theoretically again, as i mentioned earlier, go and check this go and check whether you qualify for things as you go along for these tier five credit cards. Your credit rating is really the last thing that matters by the time you have a few million pounds to go and invest in order to get a credit card. I don't think you'll really go and check your credit profile. Very often, i don't mean you'll care.

I don't think they'll care either. I hope you guys found this useful. I hope you enjoyed this if you did enjoy it, please go and smash that, like button for the youtube algorithm, i would really appreciate it was super super helped, my channel. It would be so so great for me to be able to reach more people with my content for me to be able to grow this channel more quickly.

Thank you. So much if you have smashed that like button, if you haven't even after i told you all of this, just now go and do it right now. Please come on you listen this far. The least you can do is go and hit that, like button, if you're interested in more content about personal finance, about personal finance products, interesting stuff about how to manage your money, how to manage these different products and make the most out of them make sure you Go and subscribe to this channel.

That is exactly what i talk about in every single video go and hit that bell next to the subscribe button to get notifications whenever i go and releases videos, thank you so much for watching. I really really appreciate it and i'll see you guys in the next video you.