How to Climb the Credit Card Ladder in 2025

The credit card ladder. It is a climb from basic and functional credit cards that are simply spending tools up to cards that earn you large amounts of cash back and points for free travel to cards with exclusive perks like airport lounges and VIP benefits at hotels to finally invite only black cards that are like having your own private butler who will cater to your every request. This is how to climb the credit card ladder in 2025. Hey credit warriors, welcome to the show. My name is Ben Hedges aka the credit shifu and on this channel I cover US credit cards and personal finance. If you like the sound of that, do subscribe. And this video is brought to you by Kickoff, but more on that later. So the credit card ladder is a system that I invented back in 2017 to explain the different tiers of credit cards in the US market. And it is a pretty useful system for people just starting out to set goals for themselves or for those who are already on a credit journey to understand where they are and what categories the cards they have fall into. Since different credit cards are designed for different uses. Some are for earning points, some are for benefits like hotel status, and some like the Amx black card are major lifestyle goals and are only achievable by simultaneously building wealth. But let's start at the beginning. Tier one. So, this is a functional tier. It's going to be where most people start, and it could also be a tier that people who've gotten into debt or have ruined their credit come back to later in the game. In this tier, we have credit builder cards, secured cards, balance transfer cards, and the dreaded fee harvester cards. Now, in the past, I used to say that all the cards in this tier have no annual fees and no rewards on spending whatsoever. But in 2025, it's not that black and white. And I will include some cards that do have low annual fees and very basic rewards. So for credit builder cards, a good example is the Capital 1 Platinum. This card's only real function is to build credit since it offers no rewards on spending. Look, Capital 1 even mentions an award it has received. Get the credit you need with the number one credit card for customer satisfaction. No annual fees or rewards by JD Power. That's a really specific category, right? The number one card that has no annual fees or rewards. Anyway, that is a card that I personally got at the beginning to build credit and it worked pretty well. But in 20125, there are some credit builder cards that do earn some rewards, like the Chase Freedom Rise. This card used to be called the Chase Freedom Student, but they changed the name and made it open to everyone. Although they do say having at least $250 in an account with Chase will improve your chances of approval. This card is built as a credit builder and offers very basic rewards. Just 1.5% cash back on everything with no welcome bonus. So, I'm going to still put this in tier one. I used to include student cards in this tier, but so many of them now earn good rewards with even rates up to 5% cash back on some categories that I would say that they're probably split between tier one and tier two with the better ones in tier 2. What we do have in this tier though are secured cards where you put down a deposit and this then becomes your credit limit and if you don't pay your bill, the bank can pay itself back out of your deposit money. There is a secured version of the Capital 1 Platinum that you can get that has no rewards. And Open Sky have another set of secured cards that are purely for helping people build credit. These ones are exceptions to my annual fee rule for tier one since one of them has a monthly fee of $2 and the other has an annual fee of $35. Then there's another one with no annual fee, but on that one you have to put down a higher deposit of $300, which you do get back eventually. Discover also has a secured version of its Discover it cashback card, which I guess even though it earns rewards, because it's secured, I would still put it in this tier. So, those are for people who need to build or rebuild credit. But what about options for people who are in credit card debt? Well, you will find those in this tier, too, in the form of balance transfer cards. These are credit cards that will give you a certain number of billing cycles interest free, so you can concentrate on paying down your debt. And while many cards have a bounce transfer feature in addition to earning rewards, cards that are solely marketed as balance transfer cards can be light on rewards or have no rewards at all, yet offer long interestf free periods. And it is these specific cards that we're going to include in this tier. Cards such as the Bank of America Bank America card that gives you 0% for 18 billion cycles. Sorry, I read that wrong. 18 billing cycles, which is basically 18 months, 18 billion cycles. That'd be awesome. Or you also have the US Bank Shield card, which is a new card, and that gives you even longer 24 billing cycles. That's 2 years. And this card does offer very limited rewards. It's actually a good rate, 4% cash back, but it's only on US Bank's own travel portal. So, when you use the card, just shopping at regular stores, there's no rewards at all. Then the final type of credit card in this tier is what I would call fee harvester cards like this one from Credit One. Now to be fair, Credit One is not as bad as they used to be, but this card is basically a credit builder card with very basic rewards, 1% cash back, and it charges you an annual fee, $75 for the first year and then $90 a year after that. The APR on this card is also pretty high if you do end up carrying a balance. So, I'm going to still put this in tier one since it is specifically targeting people who are building credit. It has an annual fee, which we don't normally see until tier three. Okay, cards with much better rewards would normally have annual fees. So, that's a major limiting factor. And the rewards, like we said, they're also not as high as cards in tier three, but even not as high as cards in tier 2. And that is where we're going to go to now. But first, if you're going to climb the credit card ladder yourself, you are going to need good credit. And that is why I have partnered with Kickoff, an affordable option to build credit fast that just happens to be the number one credit building app in the app store. You see, when you sign up for Kickoff, which unlike getting a credit builder card, requires no credit check, they will open a kickoff trade line for you. That trade line is only used for building credit. So, the credit utilization is always super low, and it also adds to your credit mix in the average age of accounts. Plans start at $5 per month, and that monthly payment gets reported to all three major US credit bureaus. Kickoff users with credit scores under 600, which is where a lot of people who are just starting out will be, on average, increase their credit score by 25 points in the first month and 84 points in the first year. I really wish I'd had something like Kickoff when I first started on my credit journey and I was still getting charged outrageous deposits for things like $400 upfront for a cell phone plan and 3 months rent upfront for an apartment because I had no credit. So, if credit is holding you back, start building today. Kickoff is the safest and easiest way to build credit quickly. Kickoff is giving my audience 80% off their first month, which means you're paying as low as $1 to try it out. So, click the link below or go to getkickoff.com/ben and build your credit fast. Tier two. So, this is the beginning of regular rewards cards. You will normally need either a few months to maybe a year of credit history to get these and your credit score should be in the upper 600s, maybe 670 or higher. In general, these cards still don't have annual fees, but most of them will have welcome bonuses of around $200, and they will earn rewards at higher rates than 1%. So, in this tier, we have 2% non-category cards, 5% rotating category cards, cards with specific categories around 3%, and basic hotel and airline cards. What is generally absent here is going to be cards that independently earn transferable points, although there is one big exception that we're going to talk about. All right, let's get into the cards in this tier. For 2% cashback cards, we have the City Double Cache. It earns 2% everything. That cash back can be converted into City Thank You points if you have a tier three city strata premier card, but the card can't earn points independently on its own. Currently, the card has a $200 welcome bonus, which is standard for the tier. Other 2% cards include the Wells Fargo Active Cash, which also earns 2% on all spend, has no annual fee, and has a $200 welcome bonus. Then we have the TDU up card, which is also 2% cash back on everything, no annual fee, and a $200 welcome bonus. It looks like those two other banks are looking at city like this. I guess if it works, you might as well release something similar. Next, we have 5% rotating category cards. Well, I say rotating category, but not all of them rotate since we've had some new additions over the years that are a little different, but they all share that same trait of having 5% back on a limited amount of spending. either per quarter or per month. Usually, it works out at around $500 or so per month. So, the most famous one is going to be the Freedom Flex, which earns 5% cash back on up to $1,500 in spending in categories that change every quarter. Like with the City Double Cash, you can convert that cash back into points if you transfer it over to a tier three Chase card like the Sapphire Preferred. Now, there are several cards like this, all with no annual fee and 5% back with a spending limit. The Discover it cashback card is another great example. That one also has categories that change each quarter. Then we have some variations like the US Bank Cash Plus, which has a higher spend allowance of $2,000 in spend each quarter on categories that you choose. All right? They don't rotate, you choose them. And then we have the City Custom Cash that is 5% back on $500 in spend per month. This time in your bigger spend category. So that one is automatic. You don't need to choose the category. And City sees this as a major selling point. You don't have to keep tabs on rotating categories. This is the only rotating I care about. Or activate anything to earn. Your cash back automatically adjusts for you. But although there are variations, the banks have worked out that they can deliver a card customers like and be profitable by offering 5% back on categories with a spending cap. Again, once one does it, all of the others follow. So, where were we? Oh, yeah. Two more types of tier 2 card. First, we have cards with no annual fee that earn about 3% cash back in set categories. A great example is the Capital 1 Saver, 3% on dining and entertainment with no annual fee. And look, there's a $200 welcome bonus. See a pattern there? We also have the MX Blue Cash Everyday. Another great example. This one offers 3% cash back in some everyday categories like groceries, limited to $6,000 in spending per year. Again, no annual fee and a welcome bonus of around $200. Actually, it's increased to $250 right now. Now, the final type of card that is in this tier would be basic airline and hotel cards that have no annual fee, like the Delta Sky Miles Blue AMX card, which has a very modest welcome bonus of 10,000 Delta miles and no annual fee. But these are airline miles, okay? It's not cash back, so typically they're worth more than 1 cent per mile. The Hilton Honors card from American Express is an example of a hotel card in this tier. No annual fee, and it earns hotel points. What you will notice though with hotel cards is that the welcome bonuses on them tend to be worth a bit more than say $200 on those cashback cards. I guess because for a hotel to give you a room for the night for them it only costs a fraction of what the actual published nightly rate is. So you can see with this hotel card the welcome bonus is 95,000 Hilton points which if we use a point sky valuation of 0.6 cents per point that actually gives you $570 in value. So, that's my little hack to getting great value in tier 2. Hotel cards tend to offer great bonuses and all round are a good introduction to using credit card rewards since it's normally way less points for a night in a hotel than for a flight. And if two people stay in the hotel room, it's the same number of points, but if two people wanted to take a flight, you'd have to pay double in points. But remember, these points are limited to that hotel or that airline. In the case of airline cards, they are not transferable points. And pretty much no card in tier 2 earns transferable points except for this one exception. And I put it in this tier because it also has no annual fee. And there's not really a welcome bonus on it either. And that would be the built credit card. You can earn points on rent with this card and on dining and you can transfer them to a load of really great transfer partners. But in general, cards that earn these kind of points, transferable points, are limited to our next tier, tier three. All right, so this is where the really big rewards start, okay? But all the cards in this tier do have annual fees. All right, in the past they were all just $95, but now we see a range from 95 all the way up to over 300 in some cases. But if the annual fees are higher, you will find that the card offers some sort of credits to offset it. Welcome bonus value here ranges from at least $500 to about $750. And in general, you're going to need a credit score of around 700 and a reasonable income to qualify for one of these cards. In this tier, you will find cards that earn transferable points, as well as airline and hotel cards that have better benefits than the ones in tier 2. Let's take a look at a few well-known examples. So, the MX Gold is one of my personal favorites. It has an annual fee of $325, but it offers over $500 worth of credits to allow you to get that value back. The really key thing about this card is that it earns four AMX points per dollar on US supermarkets and dining worldwide. These are American Express points, so they're worth about 2 cents per point, giving you potentially an 8% return on that spend. Welcome bonuses on these cards change frequently, but currently I am seeing 100,000 points. Next, we have the City Strata Premiere. This is City's equivalent tier three card to the MX Gold. They have a different approach with a lower annual fee of $95, but less credits. There is a $100 hotel credit, but it's only on stays over $500 or more. So, it's not necessarily that everyone's going to be able to use that each year. The card does earn three points per dollar on many categories, though. Here they all are. Air travel, non city portal hotel purchases, restaurants, supermarkets, gas stations, and EV charging stations. So, those are a couple of examples of cards that earn transferable points. Then, we also have tier three airline and hotel cards, too. This is an American Airlines card from City that has a welcome bonus of 50,000 points. That's $775 in value, and it has an annual fee of $99. That's textbook tier three stuff. The points multipliers are a little disappointing on this card, but it does give you benefits like a free check bag, preferred boarding, and a 25% discount on in-flight food with American Airlines. For hotel cards, take a look at the Marriott Bonvoy Boundless card from Chase. Again, it's a $95 annual fee. The welcome bonus is five free nights, which is actually worth a lot. It's worth between $1,500 and $2,000 according to my calculations. So, this is a very generous bonus right now. And the crucial thing though I want to show you is that this card gives you an anniversary free night every year. This tier three World of Hyatt card also does the same thing. It gives you a free night and the annual fee is also $95. So, to recap on tier three, you have bonuses worth between $500 to around $1,000, sometimes more. You have cards that earn transferable points that can be transferred to loads of different airlines and hotels. Then you also have airline and hotel cards that earn that airlines currency or that hotel's point currency. Airline cards give you benefits like free check bags and priority boarding. And hotel cards will often give you a free night in a mid-tier hotel when you renew your card each year. They may also give you some sort of hotel status that might get you a room upgrade to a higher floor or something like that, but not much else. So, what about really high-end benefits like airport lounge access or hotel status that actually gets you something meaningful like a free breakfast or a sweet upgrade? Well, for that you are going to need our next tier. Tier four. This tier is as high as most mere mortals will reach. These are premium travel cards. You'll need a credit score of around 720 and a good income. because these cards are expensive with annual fees ranging from $400 all the way up to nearly $1,000. When I did the first credit card ladder video 7 years ago, all of these cards were $450 per year. But over the past 7 years, we have seen what I call coupon bookation. Is that a word? It is. Now, this is where they increase the annual fee, but give you a load of credits to make up for it. However, not everyone will have a use for every credit. So, the bank will come out profitable. Even if some people do max out the credits and completely offset the annual fee and earn money from the card, others won't. Now, the sort of entry-level tier 4 card from a major bank is the Capital 1 Venture X. It has a $395 annual fee, but there is a $300 travel credit, plus you get given 10,000 points each anniversary, which is worth at least $100, meaning that you are effectively being paid $5 a year to hold onto the card. You can get a $5 meal from Burger King once a year. Eat like a king on a budget. Three tasty options, fries, drink, and nuggets. All for And what benefits does this card give you? Well, there are a few bonuses with the travel portal, but the main earning category is two points per dollar on everything. Okay, so this is kind of like a catch all card. But it also gives you airport lounge access through Priority Pass and Capital 1's own lounge network. Most people view this card as the best value airport lounge access credit card on the US market. In addition to that, there is also a hotel collection where you can get all the VIP benefits you see on screen now. And things like hotel collections and lounge access are a feature of this tier. You have the MX Platinum for $695 a year offset by a load of credits. Of course, of course, that one offers MX Centurion Lounge Access and Priority Pass Lounge Access, and you get a load of VIP benefits through their fine hotels and resorts collection. I enjoyed an upgrade to an ocean view room. This is actually the ocean view. Although technically I feel it's like partial ocean view since it's not right on the front looking at the ocean, but you can see the ocean. You do get a pretty good view of the ocean. And free breakfast when I stayed at the Fairmont Orchid in Hawaii in late 2023, but booked through the fine hotels and resorts collection of course. And another example of a tier 4 card is the Chase Sapphire Reserve, which is getting a major refresh this year where the annual fee will go to probably $795 and more credits will be added. coupon bookation again, but currently that card is 550 a year and it gives you Chase lounges, priority pass lounges, and a Chase hotel collection where you get similar benefits to the other two. All three of these cards offer good rewards earning rates, especially on airfare. MX Platinum, for example, is five points per dollar on flights, and the welcome bonuses on all three of these are worth over $1,000. In addition to the cards that earn transferable points in this tier, we also have tier four cards for airline and hotel chains. Those will give you top benefits with those brands. Like the top American Airlines card for $595 gives you Admirals Club membership. And the top Hilton card gives you Hilton Diamond status. That is what got me a sweet upgrade at the Conrad in Las Vegas. Now, in general, I only recommend one tier 4 card per person, and that is because you will double up on benefits if you have more than one. You don't need two priority pass memberships, for example. Now, this rule could be broken if, say, you travel a lot and maybe you have one transferable points card like the Chase Sapphire Reserve and one hotel or airline card like the Hilton Aspire for example. But in general, most people will have just one tier four card and multiple tier three and two cards. But once you are at such a lofty level already, where can you go? You're on 10 on your guitar. Where can you go from there? Where? Put it up to 11. 11. Exactly. Well, our tiers don't go that high, but if you can make it, perhaps you can get into tier five. Now, in tier five, we have invitationon black cards. The most famous of which is the MX Centurion. This card is only available to you if you spend around $250,000 or more a year on the MX Platinum. And then you might, and I stress might, get an invitation. After that, it's a $10,000 initiation fee and then a $5,000 annual fee. But you do get perks like access to a private terminal at LAX airport, a concierge that can get you into booked out restaurants and soldout shows, as well as an exclusive lounge and dining experience on the 55th floor of one Vanderbelt Plaza in New York called Centuria New York. This is the original black card that all the celebrities have, but there are other black cards. The most exclusive in the world is probably the Dubai First Royale card that is inlaid with real gold and diamonds and is only available to Middle Eastern royalty and billionaires. At this level, credit score doesn't really matter. If you want one of these cards, it's really dependent on wealth alone. I have a whole video on black cards. It looks like this. And you can check it out if you're interested or just want to drool over how much money these people have. I'll put it on the end screen of this video. And that is it, guys. That's my 2025 update on how to climb the credit card ladder. I hope you liked it. Please share this video with your friends. And if you want to embark on your own credit ladder journey, don't forget to build your credit with Kickoff. Go to getkickoff.com/ben or click the link below. Please subscribe to the channel if you're new. We'll see you next time. Bye-bye.