Did you know 70% of Americans have a credit score below 700? If you’re in this group, don’t worry. A credit card for fair credit could help you gain financial freedom. Fair credit scores are between 580 and 669 on the FICO scale, so you’re not alone in improving your score12.
Credit cards for fair credit offer a chance to boost your score and enjoy some benefits. They help you build a good credit history by reporting to major credit bureaus. Plus, you can earn cash back rewards of 1% to 2% on your purchases1.
These cards may have higher APRs, from 15.24% to 35.99%. But, they’re a step towards better credit. By using credit wisely, you could see your credit limit increase over time1. The subprime credit market is growing, with some cards offering up to 10% cash back at certain stores2.
If you want to improve your credit score or just check out your options, credit cards for fair credit are a great choice. Let’s explore how these cards can aid in your credit-building journey.
Key Takeaways
- Fair credit scores typically range from 580 to 669 on the FICO scale
- Credit cards for fair credit can help improve your credit score
- Some cards offer cash back rewards from 1% to 2%
- APRs on fair credit cards range from 15.24% to 35.99%
- Responsible use can lead to credit limit increases
- Some cards offer up to 10% cash back with select merchants
- These cards are valuable tools for credit building
Understanding Fair Credit Scores
Credit scores are key to your financial health. Scores from 580 to 669 are considered fair for FICO® Scores and 601 to 660 for VantageScore3. This range is in the middle of the credit score spectrum, which goes from 300 to 8503.
What is considered a fair credit score?
In 2023, the average FICO Score in the U.S. was 715, with most scores between 600 to 7504. If your score is between 580 and 669, you’re in the fair credit range. You’re not in the subprime range, but you can still improve your credit history.
Factors affecting your credit score
Several factors influence your credit score. FICO’s model looks at these key elements:
- Payment history: 35%
- Credit utilization ratio: 30%
- Length of credit history: 15%
- Credit mix: 10%
- New credit: 10%4
To improve your score, pay on time, keep your credit use low, and have a varied credit mix. Focus on these areas for better credit repair.
Why fair credit matters
Fair credit can affect your financial chances. For example, a score of 600 might get you over 16% approval for some credit cards, while a good score of 700 gets nearly 29% approval5. Also, a fair score could mean paying more in interest. On a $30,000 auto loan, a fair score of 600 versus a good score of 700 could mean paying $101 more monthly and $3,637 more in total interest over 36 months5.
By working on credit repair and managing your credit well, you can aim for a better score. This can lead to better financial products, lower interest rates, and more favorable loan terms in the future.
Benefits of Credit Cards for Fair Credit
Credit cards for fair credit help you grow financially. They are for people with scores from 580 to 669, as per FICO®6. These cards make it easier to build credit and have better approval chances than premium cards.
They also offer rewards. For example, the Capital One QuicksilverOne Cash Rewards Credit Card gives 5% cash back on hotels and rental cars through their travel portal7. This way, you can earn rewards while boosting your credit score.
Many fair credit cards don’t have an annual fee. The Capital One Platinum Credit Card is one such card, with no annual fee7. It also looks at increasing your credit limit after six months of good use.
Credit-building tools are a big plus. They report to credit bureaus regularly, helping you build a good credit history. Some cards even let you check your credit score for free, so you can see how you’re doing over time.
“Paying bills in full each month is crucial to avoid expensive interest charges and improve credit scores.”
WalletHub’s editors look at over 1,500 credit card offers to find the best ones for fair credit8. Their research helps make sure you get the right card for building your credit.
Top Credit Cards for Fair Credit
Looking to improve your credit score? Picking the right credit card is key. For those with fair credit, scores between 580 and 669, there are many options with great features9.
Capital One QuicksilverOne Cash Rewards Credit Card
The Capital One QuicksilverOne Cash Rewards Credit Card is a top pick for its rewards. You get 1.5% cash back on all buys, perfect for daily expenses. Although it has a $39 yearly fee, the rewards can make up for it if you use it a lot.
Upgrade Cash Rewards Visa®
The Upgrade Cash Rewards Visa® combines a credit card with a personal loan. It offers credit limits from $500 to $25,000 and 1.5% cash back on buys. This card is great for those needing to consolidate debt or buy big items.
Capital One Platinum Credit Card
For those who don’t want to pay an annual fee, the Capital One Platinum Credit Card is a good choice. It can help you get a higher credit limit after just six months of paying on time. This is a great option for building credit10. It also reports to credit bureaus, helping your credit score9.
When picking a card, think about annual fees, APRs, and how it helps build credit. Top cards for fair credit often have no annual fees and offer 1.5% to 5% cashback8. Always pay your bill on time to boost your credit score, as this is a big part of your creditworthiness8.
Features to Look for in Fair Credit Cards
When looking for a credit card with bad credit or a secured card, it’s key to know what features can help improve your finances. These cards, for those with fair credit, are for FICO scores between 580 and 669. They provide a way to get better credit with smart use11.
Choose cards that report to major credit bureaus to help build your credit history. Many fair credit cards have annual fees and higher interest rates. So, it’s important to compare them carefully11. The Capital One QuicksilverOne Cash Rewards Credit Card, for instance, offers up to 5% rewards but has a $39 annual fee1211.
Having free credit score access is also a great feature. Cards like the Petal® 2 “Cash Back, No Fees” Visa® Credit Card give more rewards for good behavior. You can earn up to 1.5% cash back after making 12 on-time payments12.
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Look for cards with no annual fee, like the Chime Credit Builder Secured Visa® Credit Card. It doesn’t need a credit check and has no annual interest charges11. For students, the Capital One SavorOne Student Cash Rewards Credit Card offers up to 10% rewards with no annual fee11.
| Card Name | Annual Fee | Rewards | Special Features |
|---|---|---|---|
| Capital One QuicksilverOne | $39 | Up to 5% cash back | Fair credit acceptance |
| Chime Credit Builder | $0 | None | No credit check, secured |
| Capital One SavorOne Student | $0 | Up to 10% cash back | $50 sign-up bonus |
While rewards are nice, focus on cards that offer a clear way to get better terms as your credit score improves. Balance the rewards against fees and interest rates to pick the best card for your financial goals.
How to Choose the Right Credit Card for Fair Credit
Choosing the best credit card for fair credit means looking closely at your options. With scores between 630-689, you have several choices2. Let’s explore what to consider for a smart choice.
Assessing Your Spending Habits
Look at your monthly spending to find a card that fits your life. Some cards give bonus cash back at places like restaurants and gas stations, great for those who eat out or drive a lot2. Others offer up to 1.5% cash back on all buys, perfect for everyday expenses2.
Comparing Annual Fees and Interest Rates
Annual fees for fair credit cards vary a lot. For instance, the Capital One QuicksilverOne Cash Rewards Credit Card has a $39 yearly fee2. APRs usually range from 15.24% to 35.99%, depending on the card1. Think about how these costs fit into your budget and spending habits.
Evaluating Rewards Programs
Search for cards with cash back, points, or miles that suit you1. Some cards offer 1% to 5% cash back on purchases, which can help you save more1. Using your card wisely can also help boost your credit score over time.
When picking a card, think about your credit card approval odds. Applying for cards suited to your score increases your approval chances2. Keeping your credit use below 30% helps keep your score healthy2. With the right card and smart use, you can improve your credit and maybe get better offers later.
Building Credit with Fair Credit Cards
Fair credit cards are great for fixing and building credit. They are for people with scores from 580 to 669. Using these cards right can help improve your credit over time96.
Many fair credit cards have features to help you improve your credit. They report to big credit agencies regularly, so your good payment history gets noted13. Some cards also let you check your credit score for free, so you can see how you’re doing13.
To get the most from your fair credit card:
- Make timely payments
- Keep your credit use under 30%
- Check your credit report often
While you’re building credit, you can also get cash back rewards. Some cards give up to 1.5% cash back, so you earn while you improve your credit13.
“A fair credit card is not just a financial tool; it’s a stepping stone to better credit and greater financial opportunities.”
Improving your credit score takes time and steady effort. By using your fair credit card wisely and keeping an eye on your progress, you can move from fair to good credit. This opens up better financial options for you in the future.
| Credit Score Range | Card Type | Key Features |
|---|---|---|
| 580-669 | Unsecured | Cash back rewards, no annual fee |
| Below 580 | Secured | Security deposit, lower credit requirements |
Choosing a secured or unsecured card is up to you. The main thing is to see it as a way to better your credit. With patience and careful use, your fair credit card can lead to a brighter financial future.
Rewards Programs for Fair Credit Cards
Credit cards for fair credit often have rewards programs. These let you earn as you build your credit. Let’s look at the rewards you can get and how they help you.
Cash Back Options
Cash back rewards are a favorite among fair credit cards. Some cards give a flat cash back on all buys. Others offer more in certain categories.
The Discover it® Secured Credit Card gives 2% cash back at gas stations and restaurants on up to $1,000 in combined buys each quarter14. It also matches all cash back earned in the first year, doubling your rewards14.
Points and Miles
Some fair credit cards offer points or miles, though it’s less common. The Bank of America® Travel Rewards Credit Card for Students gives 1.5 points for every $1 spent on all buys14.
For travelers, the Credit One Bank Wander® Card earns 10X points on hotels and rental cars booked through their travel partner. It also earns 5X points on flights, dining, and gas buys14.
Introductory Bonuses
Introductory bonuses are available on some fair credit cards to start your rewards. The Bank of America® Travel Rewards Credit Card for Students offers 25,000 online bonus points after spending $1,000 in the first 90 days14.
Other cards, like the Chase Freedom Rise℠, give a $25 statement credit for setting up automatic payments14.
When picking a rewards card, think about your spending and financial goals. Most travel credit cards need scores of 670 and above. But, some are for those rebuilding their credit scores14. With careful use, these rewards can be valuable while you improve your credit.
Credit Card for Fair Credit: Key Considerations
Looking for a credit card with fair credit? First, know what fair credit means. It’s scores from 580 to 669 on the FICO® Score or 601 to 660 on the VantageScore®15. About 17% of people have these scores, making up 13% of the VantageScore group15.
APR is a big deal. Cards for fair credit have APRs from 19% to 29% or more. The Citi Double Cash® Card has a variable APR of 19.24% to 29.24%16. Always compare APRs to find the best deal.
Annual fees matter too. Some cards have fees, but the Citi Double Cash and Citi Custom Cash don’t16. This makes them great for building credit without extra costs.
Rewards programs differ a lot. The Capital One QuicksilverOne Cash Rewards Credit Card gives 5% cash back on hotels and rental cars17. The Citi Custom Cash® Card offers up to 5% cash back on your top spending category each cycle16.
Think about credit limit increases too. Some cards review your limit after you show you can handle more. This can help your credit score by lowering your credit use ratio15.
Last, choose cards that report to all three major credit bureaus. This helps build a good credit history, which can boost your score15. Remember, fair credit is below average. Using your card wisely can help you move up to better credit levels.
Secured vs. Unsecured Credit Cards for Fair Credit
When building credit, you can choose between secured and unsecured credit cards. Secured cards require a cash deposit, usually $200 to $500, as collateral. This deposit helps protect the issuer1819.
Unsecured cards don’t need a deposit but require higher credit scores. You’ll need a score of 670 or more for these cards. Secured cards are better for those with no credit or scores under 66918.
Secured cards are a good first step in building credit. They report to major credit bureaus, helping you start a credit history. Some, like the Discover it® Secured Credit Card, offer rewards without an annual fee18.
Unsecured cards offer better perks and lower interest rates. They often have rewards programs, like cashback or travel points. But, they’re harder to get if you have fair credit18.
| Feature | Secured Credit Cards | Unsecured Credit Cards |
|---|---|---|
| Deposit Required | Yes | No |
| Typical APR | Over 20% | Lower than secured cards |
| Credit Score Needed | No credit or below 669 | 670 or higher |
| Rewards | Sometimes available | More common |
Both secured and unsecured cards can help build credit if used right. The main thing is to pay on time and keep your credit use low. With good habits, you could move to an unsecured card in six months to a year20.
Improving Your Credit Score with Responsible Card Use
Improving your credit score is a long-term effort. But, using a credit card wisely can help speed things up. Let’s look at how you can use your card to better your credit history and start fixing your credit.
Making Timely Payments
It’s key to pay your credit card bill on time. Payment history is 35% of your FICO® Score, making it the biggest factor in your creditworthiness21. You can set up automatic payments or reminders to avoid missing due dates. Paying on time can boost your credit score in three to six months22.
Managing Credit Utilization
Your credit utilization rate is crucial for your credit score. The CFPB suggests keeping your credit card balances under 30% of your total limit22. Aim for a utilization rate under 10%23. Paying your bill early or making extra payments can help keep your balance low.
Monitoring Your Credit Report
Check your credit report often for mistakes or identity theft signs. The big three credit bureaus, Experian, TransUnion, and Equifax, use reports from credit card companies23. Use free credit monitoring services, like Experian’s, to keep an eye on your score and get tips for improving your credit.
Building credit takes time. With patience and smart card use, you can see big improvements in your credit score and financial health.
Common Mistakes to Avoid with Fair Credit Cards
Using credit cards wisely can boost your credit score, but missteps can set you back. Let’s explore some pitfalls to sidestep on your journey to better credit.
Many Americans carry credit card balances month-to-month, thinking it improves their credit score. This is a myth. In reality, it can hurt your credit and lead to debt2425.
Your credit utilization ratio is key to fixing your credit. Experts say keep it under 30%. Using less than 30% of your credit limit can help you get your card approved24.
Late payments can really hurt your credit score. A 30-day late payment can drop your score by up to 83 points. A 90-day delay can cause a drop of up to 133 points25.
“Paying your credit card bill on time and in full each month is the golden rule of responsible credit use.”
Avoid maxing out your card. Top credit scorers use only 7% of their credit. High utilization can lower your score and signal financial strain25.
Don’t apply for multiple cards in a short time. Each application results in a hard inquiry, temporarily lowering your score. Space out applications by at least six months2425.
| Mistake | Consequence | Recommendation |
|---|---|---|
| Carrying a balance | High interest, increased debt | Pay in full each month |
| Late payments | Credit score drop, late fees | Set up automatic payments |
| High utilization | Lower credit score | Keep usage below 30% |
| Frequent applications | Multiple hard inquiries | Apply no more than once per 6 months |
By avoiding these common mistakes, you’ll be on track to improve your credit score and make the most of your fair credit card.
Transitioning from Fair to Good Credit
Moving from fair to good credit takes dedication and smart money habits. A fair credit score is between 580 and 669, and good credit scores are from 670 to 73926. This change can save you over $22,000 in the long run27.
To improve your credit score, use credit wisely and consistently. Always pay on time. Payment history is key to your credit score26. Keep your credit use under 30% to help your score26.
As you improve your credit, you might get better card offers. Some cards, like the Petal 2 Visa Credit Card, offer more cash back rewards for responsible use28.
The Impact of Credit Improvement
Improving your credit score can save you a lot on different loans:
- Mortgage savings: Up to $16,677
- Credit card savings: Lower APRs
- Auto loan savings: Lower interest rates
- Personal loan savings: Better terms
These savings can reduce your monthly payments by $9227. Over time, you could save tens of thousands of dollars on interest and fees.
Fixing your credit takes time. It took Kara Stevens seven years to get her score from the low 600s to an excellent 76628. Stay patient, keep up good credit habits, and you’ll see better financial options and health.
Credit Card Issuers That Cater to Fair Credit
Many credit card companies have products for people with fair credit. These cards help build or improve credit scores. Let’s look at some top companies and what they offer for fair credit seekers.
Capital One
Capital One is a top choice for those with fair credit. Their Platinum Credit Card is great, needing a fair credit score (300-669) to get it. It has no annual fee and a variable APR of 29.99%, making it easy for many to get29.
Discover
Discover has the Discover it Secured Credit Card for building credit. It offers cash back rewards and can lead to an unsecured card with good use. This card helps improve your chances of getting approved over time.
Credit One Bank
Credit One Bank focuses on cards for fair to poor credit. They have different rewards and fees to fit various financial needs. These cards can help you move to better credit and access more premium options.
Fair credit cards usually have higher APRs than prime credit cards. But, they offer great chances to improve your credit. On average, people with fair credit see big improvements in their scores over time30.
Remember, getting a fair credit card is not guaranteed. It’s important to compare options, understand the terms, and pick a card that fits your financial goals and spending. With careful use, these cards can be key in your journey to better credit.
Alternative Options for Building Credit
Building credit doesn’t need a traditional credit card. For those wanting to improve their score, there are other ways that work well. Becoming an authorized user on someone else’s card is a good choice. It lets you enjoy their good credit without having to pay back the money31.
Credit-builder loans are also a solid option for fixing credit. These loans, usually between $300 and $1,000, help you build credit while saving money32. The money you borrow is kept in a savings account until you pay it all back. This ensures you don’t spend more than you have.
Reporting rent and utility payments to credit agencies can also boost your score. Many landlords and utility companies now offer this service. It shows you’re good with money3132. Some fintech companies have created products that don’t need a traditional credit check. This makes it easier for people with little credit history to build credit.
Remember, your payment history is 35% of your FICO score. So, making payments on time is key for building credit33. By trying these alternatives, you can find the best way to improve your credit score and reach your financial goals.
FAQ
What is considered a fair credit score?
What are the benefits of credit cards for fair credit?
What are some top credit cards for fair credit?
What features should I look for in a fair credit card?
How can I choose the right credit card for fair credit?
How can I build credit with a fair credit card?
What types of rewards programs are available for fair credit cards?
What should I consider when evaluating a credit card for fair credit?
What’s the difference between secured and unsecured credit cards for fair credit?
How can I improve my credit score with responsible card use?
What are some common mistakes to avoid with fair credit cards?
How can I transition from fair to good credit?
What credit card issuers cater to fair credit consumers?
What are some alternative options for building credit?
Source Links
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- What Is a Good Credit Score? – Experian – https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/
- What Is Considered A Fair Credit Score? | Bankrate – https://www.bankrate.com/personal-finance/credit/what-is-fair-credit-score/
- Credit Cards for Fair Credit | Capital One – https://www.capitalone.com/credit-cards/fair-and-building/
- Best Credit Cards for Fair Credit July 2024 – https://time.com/personal-finance/article/best-credit-cards-for-fair-credit/
- Best Credit Cards for Fair/Average Credit of July 2024 – WalletHub – https://wallethub.com/best-credit-cards-for-fair-credit
- Reviews of Credit Cards for Fair Credit | Bankrate – https://www.bankrate.com/credit-cards/reviews/fair-credit/
- Best credit cards for fair or average credit – https://apnews.com/buyline-personal-finance/article/best-credit-cards-for-fair-or-average-credit
- Best Credit Cards for Fair Credit of July 2024 – https://www.latimes.com/compare-deals/credit-cards/best-cards-for-fair-credit
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- Credit Cards for Fair Credit | Credit Sesame – https://www.creditsesame.com/credit-cards/for-fair-credit/
- 5 best travel cards for fair credit of July 2024 – https://www.cnbc.com/select/the-best-travel-cards-for-fair-credit/
- What is fair credit, and what does it mean if you have it? – https://fortune.com/recommends/credit-cards/what-is-fair-credit/
- Citi Adds Two Cash-Back Credit Cards For Fair Credit – https://www.forbes.com/advisor/credit-cards/citi-adds-two-cash-back-credit-cards-for-fair-credit/
- Best Travel Credit Cards For People With Bad Or Fair Credit | Bankrate – https://www.bankrate.com/credit-cards/travel/travel-credit-cards-bad-fair-credit/
- What’s The Difference Between Secured And Unsecured Credit Cards? | Bankrate – https://www.bankrate.com/credit-cards/building-credit/secured-vs-unsecured-credit-cards/
- Secured vs Unsecured Credit Card: What’s the Difference? | Nav – https://www.nav.com/blog/secured-vs-unsecured-credit-card-399295/
- Secured vs. Unsecured Credit Cards: What’s the Difference? – NerdWallet – https://www.nerdwallet.com/article/credit-cards/secured-credit-cards-vs-unsecured-difference
- How To Use A Credit Card To Increase Your Credit Score – https://www.forbes.com/advisor/credit-cards/how-to-use-credit-card-increase-credit-score/
- How to Use a Credit Card to Build Credit | Capital One – https://www.capitalone.com/learn-grow/money-management/how-to-use-a-credit-card-to-build-credit/
- How to Use a Credit Card to Build Credit – Experian – https://www.experian.com/blogs/ask-experian/how-to-use-a-credit-card-to-build-credit/
- How To Avoid The Biggest Credit Card Mistakes You Can Make | Bankrate – https://www.bankrate.com/credit-cards/advice/credit-card-mistakes-roundtable/
- 10 common credit card mistakes you may be making and how to avoid them – https://www.cnbc.com/select/common-credit-card-mistakes/
- 5 Action Items to Move from Fair to Good Credit – Experian – https://www.experian.com/blogs/ask-experian/5-action-items-to-move-from-fair-to-good-credit/
- Raising Your Credit Score Could Save You $22,263 | LendingTree – https://www.lendingtree.com/personal/study-raising-credit-score-saves-money/
- The secret to going from a credit score in the low 600s to excellent—without ever really checking it – https://www.cnbc.com/select/how-to-improve-from-fair-credit-to-excellent-credit/
- Best Credit Cards for Fair/Average Credit for July 2024 | The Motley Fool – https://www.fool.com/the-ascent/credit-cards/best-credit-cards-average-credit/
- No title found – https://usa.visa.com/pay-with-visa/find-card/apply-credit-card/fair
- 13 Ways to Establish Credit With No Credit History – https://www.incharge.org/debt-relief/credit-counseling/bad-credit/how-to-establish-credit-when-you-have-no-credit-history/
- How To Build Credit Without A Credit Card | Bankrate – https://www.bankrate.com/personal-finance/credit/how-to-build-credit-without-credit-card/
- Alternative Ways to Build Your Credit Without Using a Credit Card – https://www.debt.org/credit/alternative-ways-building-credit/