A Guide to Finding the Best Credit Card for Fair Credit
It’s not always easy to know where to begin when attempting to improve your credit score. Below are our top picks and several tips to help you boost your credit for the future. Here, we look at:
Not sure what to expect? We’ll share how to build credit and how to maximize your fair credit card.
Comparing the best credit cards for fair credit
|Best For:||Average Credit Card||Annual Fee|
|Building Credit||Capital One Platinum Credit Card||$0|
|No foreign transaction fee||Avant Credit Card||$59|
|Walmart purchases||Capital One Walmart Rewards® Mastercard®||$0|
|Flat-Rate Rewards||Capital One QuicksilverOne Cash Rewards Credit Card||$39|
|International purchases||Upgrade Visa® Card with Cash Rewards||$0|
|Fraud Protection||Indigo® Platinum Mastercard®||$0-$99|
|College Students||Discover it® Student Cash Back||$0|
|Cash back rewards||Credit One Bank® Platinum Visa® for Rebuilding Credit||$75 for the first year. After that, $99 annually ($8.25 per month)|
|Rebuilding credit||Milestone® Gold Mastercard®||$35-$99|
|Rewards||Credit One Bank® Platinum Rewards Visa||$95|
|No Annual Fee||Petal®1 “No Annual Fee” Visa® Credit Card||$0|
|No Credit History||Chase Freedom® Student credit card||$0
Editor’s picks: the best credit cards for people with fair credit
Why we picked it: The Capital One Platinum Credit Card gives you the opportunity to get a credit limit increase after as little as 6 months, something not often seen with credit-builder cards.
Pros: The Platinum offers no annual fee, making it an excellent choice for a first card. Also, there’s fraud protection, online banking, access to a contactless card and more.
Cons: This card doesn’t offer a sign-up bonus or ongoing rewards, which is something to consider when looking for a card for the long term.
Who should apply? This is a great card for anyone hoping to avoid an annual fee or a secured card deposit while working their way up from average credit.
Who should skip? If you’re more concerned about earning rewards than building credit, this card will likely disappoint.
Read our Capital One Platinum Credit Card review.
Avant Credit Card: Best for no foreign transaction fee
Why we picked it: Compared to many credit-building cards, the Avant Credit Card offers a relatively high credit limit to start (up to $1,000 based on credit worthiness) and requires no security deposit.
Pros: This card allows potential applicants to check if they’re preapproved without dinging their credit. The application process is quick and applicants generally receive a decision in as little as 60 seconds.
Cons: This card offers no rewards and is generally short on perks beyond its lack of a foreign transaction fee.
Who should apply? This card could be a match for credit-builders looking to boost their score without putting cash down for a security deposit. Travelers will like its lack of foreign transaction fees.
Who should skip? Someone hoping to earn rewards will be disappointed by this card’s lack of a rewards program. Those who tend to carry a balance should be mindful of the high APR (24.99% variable).
Read our Avant Credit Card review.
Why we picked it: If you are loyal to Walmart, this card just keeps giving you love by way of rewards. Earn 5% cash back at Walmart stores using Walmart Pay for your first 12 months of card membership, then earn 2%. Also, earn 5% cash back on Walmart.com purchases, including pickup and delivery.
Pros: In addition to earning 2% at Walmart stores, you can get that rate on restaurant and travel purchases. Also, earn 2% cash back at Walmart stores as well as at Walmart and Murphy USA Fuel stations.
Cons: Be mindful that the 5% rewards rate with Walmart Pay in Walmart stores only applies for the first 12 months, then reverts to 2%, though the 5% back on Walmart.com purchases remains. If you prefer to do your shopping in person, you might find the card less valuable after your first year.
Who should apply? If Walmart is your go-to one-stop shop of choice, this card offers a lot of potential value. Online shoppers can take advantage of this card’s high rewards rate for Walmart.com online purchases.
Who should skip? This card won’t be of much use unless you do a good bit of shopping at Walmart, specifically Walmart.com which offers the highest long-term rewards rate.
Read our Capital One Walmart Rewards® Mastercard® review.
Why we picked it: Earning unlimited cash back rewards while strengthening your credit makes this our pick for the best credit card for fair/average credit for flat-rate rewards.
Pros: You’ll earn consistent 1.5% cash back on all purchases, with no need to juggle rotating rewards categories or track spending. Plus, with responsible use, you will be considered for a credit limit increase after your first 6 months of on-time payments.
Cons: The $39 annual fee will cut into your cash back earnings and the card’s APR is very high at 26.99% (Variable), making it a risky choice should you need to carry a balance.
Who should apply? This card is ideal for those with so-so credit hoping to earn a decent rewards rate on day-to-day spending.
Who should skip? If paying your monthly balance in full is a struggle, this card could end up costing you a lot in interest. Additionally, big spenders would be better off going with a card that maximizes earnings on top spend categories.
Read our Capital One QuicksilverOne Cash Rewards Credit Card review.
Why we picked it: As a Visa card, this product is excellent for overseas travel, thanks to the Visa network’s widespread acceptance. To top it off, this card has the added feature of no foreign transaction fee, which means you can make international purchases with no extra cost.
Pros: This card is light on the fees, including no annual fee and no monthly fee. Also, earn an unlimited 1.5% cash back on purchases every time you make a payment.. An added feature: See if you prequalify without dinging your credit score.
Cons: There’s no sign-up bonus with this card, as well as no introductory 0% APR offer on purchases or balance transfers. That said, the regular APR starts out super low at 8.99%-29.99% variable, if you can qualify for it.
Who should apply? Someone who struggles to keep up with payments may find the reward incentive to be a useful motivator. Travelers will enjoy its lack of foreign transaction fees and high acceptance around the globe.
Who should skip? If your credit score allows it, you can certainly find a more valuable flat rate cash back card.
Read our Upgrade Visa® Card with Cash Rewards review.
Why we picked it: When it comes to your personal finances, peace of mind is extremely important. The Indigo Platinum Mastercard can help you breathe easier with fraud protection if your card happens to be stolen or misplaced.
Pros: You’ve got a good chance at approval, even if you’ve been through a credit disaster like bankruptcy. And since it’s an unsecured card, you won’t have to put down any money up front.
Cons: You won’t earn any rewards from using the card and its annual fee could run you anywhere from $0-$99 after the first year (see terms). Plus, Indigo doesn’t specify when or if you can qualify for a higher credit limit.
Who should apply? This card is a potential match for those who have bad to fair credit or a history of bankruptcy, and who want to avoid shelling out a deposit on a secured card.
Who should skip? If you have difficulty making on-time payments or carrying a balance month-to-month, this card could cost you in fees.
Read our Indigo® Platinum Mastercard® review.
Why we picked it: Earning extra cash for being responsible with your credit card is one of this card’s most valuable benefits. With a high rewards structure, you’ll earn cash back at the places you usually spend money, like grocery stores, restaurants, gas stations, select rideshares and online shopping.
Pros: You’ll be raking in the rewards while building credit thanks to this card’s terrific rewards rate and low fees. Even better, Discover will match all the cash back you’ve earned at the end of your first year.
Cons: The card needs upkeep: You must enroll in the rotating bonus category every quarter to earn 5% cash back (on up to $1,500 in purchases per quarter, then 1%). And though its standard variable purchase APR is typically lower than that of most competitors (12.99% to 21.99% variable after six months of account opening), a 0% introductory APR on new purchases (for first six months) could be risky for inexperienced cardholders.
Who should apply? For anyone new to the world of credit, this Discover card’s consumer-friendly terms, lucrative first-year bonus and rotating cash back categories make for an excellent start.
Who should skip? If plotting out spending to take advantage of rotating categories strikes you as tedious, this is probably not the card for you. Likewise, those prone to overspending could land in trouble once the regular APR kicks in (12.99% to 21.99% variable after six months of account opening).
Read our Discover it® Student Cash Back review.
Why we picked it: You’ll earn 1% cash back rewards on eligible purchases of gas, groceries and mobile phone, internet, cable and satellite TV services. Getting cash back in such practical categories should help you offset the card’s annual fee at least a bit.
Pros: Not only is it an unsecured card – meaning you won’t have to put down any money up front as a deposit – you may be able to increase your credit limit over time with responsible use. Plus, the card comes with credit-building tools like free online access to your Experian credit score and the option to set up alerts to ensure you keep up with payments and avoid late fees.
Cons: While it’s a decent option if you’ve had a few financial stumbles and are looking to get your credit back on track with an unsecured card, it could cost you. The Credit One Bank Platinum Visa for Rebuilding Credit charges an annual fee of $75 for the first year. After that, $99 annually ($8.25 per month), along with annual charges for adding authorized users and a fee for using the card abroad.
Who should apply? For credit-builders, it’s tough to find a credit card that offers any sort of cash back rewards program, much less one so straightforward.
Who should skip? With a foreign transaction fee of 3%, frequent travelers may want to look elsewhere.
Read our Credit One Bank® Platinum Visa® for Rebuilding Credit review.
Why we picked it: Thanks to no required security deposit and a pre-qualification process that won’t hurt your credit score, this card provides ways for cardholders to build back their credit history.
Pros: This card offers no cash advance fees in your first year as a cardholder (either $5 or 5% thereafter, whichever is greater), plus identity theft protection and a competitive foreign transaction fee of 1%.
Cons: The card’s initial credit limit of $300 is a reason it comes up short for some, along with its $35-$99 annual fee, a high regular APR and the lack of additional perks.
Who should apply? This card’s low entry barrier makes it an attractive option for those with a history of bankruptcy or bad credit.
Who should skip? Even among cards for people with bad credit, this card’s hefty fees and high APR are off-putting. And if earning rewards are a high priority for you, look elsewhere.
Read our Milestone® Gold Mastercard® review.
Why we picked it: This card offers a practical, simple and straightforward structure that gives people with less-than-perfect credit the opportunity to earn generous cash back rewards and benefits.
Pros: Earn 5% cash back on the first $5,000 of eligible gas, grocery, internet, cable, satellite TV, and mobile phone service purchases each year – that means you could earn $250 for the year. It’s 1% back after that.
Cons: The regular APR is one of the highest around, at 23.99% Variable. Also, there is no welcome bonus. Finally, this card’s $95 annual fee puts a dent on any rewards you earn.
Who should apply? For anyone with fair credit hoping to rack up cash back rewards, this card is a strong choice.
Who should skip? If you have a tendency to carry a balance, the regular APR (23.99% Variable) could be problematic, especially if you’re trying to build up your credit score.
Read our Credit One Bank® Platinum Rewards Visa review.
Why we picked it: In addition to no foreign transaction fee, a rarity for cards that accept fair or average credit, this card also offers no annual fee. Late and returned payment fees may apply.
Pros: On top of earning 2%-10% cash back at select merchants, you can get a credit limit of up to $5,000, and that’s with no refundable deposit required. You can also see if you are pre-approved within minutes of applying.
Cons: The regular APR is sky high on this card, at 19.99%-29.49% variable. Also, there is no sign-up bonus offer, and there are no ongoing rewards.
Who should apply? This card is a good fit for anyone with limited to so-so credit history hoping to build up their score without paying an annual fee or security deposit.
Who should skip? A high end range of the variable APR means this card may not be the best option for someone who carries a balance month-to-month.
Read our Petal® 1 “No Annual Fee” Visa® Credit Card review.
Why we picked it: Chase’s first credit card for college students rewards responsible spending: Cardholders receive a $20 bonus after each account anniversary year, for the first 5 years, if their account is in good standing (meaning their minimum payments are being made on time). Plus, there’s no annual fee.
Pros: The Chase Freedom Student credit card lets students earn rewards: 1% cash back on every purchase. They also receive 5% total cash back on Lyft rides through March 2022, and a complimentary 3-month subscription to DashPass, DoorDash’s subscription service that provides free deliveries on eligible orders over $12. Just be mindful – after 3 months, you’ll be automatically enrolled in DashPass at 50% off for the next nine months and you must activate the benefit by Dec. 31, 2021. Plus, there’s a sign-up bonus: Cardholders earn $50 after making their first purchase with the card in the first three months.
Cons: Depending on their spending habits, students could arguably earn more over time with other cards in this category. For instance, the Journey Student Rewards from Capital One offers 1 percent cash back on general purchases, but also lets cardholders earn 25 percent bonus points when they pay on time (an overall rate of 1.25X points). Learn more about the best student credit cards.
Who should apply? This card’s great credit-building tools make it an ideal starter card for students.
Who should skip? Students already in good financial standing who have regular high expenses may be able to earn more from a card offering a higher rewards rate.
Read our Chase Freedom® Student credit card review.
What is fair/average credit?
Fair credit and average credit are largely synonymous and refer to the FICO credit scores between 580 and 669 (standard FICO Score 8 model). For VantageScore, fair/average credit can range from 601 to 660 (standard VantageScore 3.0 model). FICO and VantageScore are the two major credit scores in the United States. FICO was the creator of the first credit score and is still the most widely used score today. Both scoring models range from 300 to 850.
FICO score ranges
Is a fair credit score good?
Simply put: No. “Fair” is a below-average score for both FICO and VantageScore. Since credit offers are based on creditworthiness, people with fair credit get below-average offers.
But if you have fair credit, all hope is not lost. While lenders typically prefer credit scores to fall in the good to excellent range, people with fair credit scores are still considered viable applicants for many loans. Additionally, with some work, persistence and responsible credit usage, you can improve your credit score.
Common ways that consumers improve their credit ratings are by contacting the major credit bureaus (Experian, Equifax and TransUnion) and asking them to remove reporting errors, paying down credit card balances and paying off accounts that have been placed in collections. Another tactic is to ask for an increased credit limit on your credit cards. For people who carry credit card balances, an increased credit limit lowers the credit-to-debt ratio, a key factor in credit scoring.
Although credit scores can be improved in a few weeks, most improvements take months and some take years. It may take some time before you qualify for the very best credit card offers, but there are plenty of good options for fair credit in the meantime.
By increasing your credit score, you will have access to better financial opportunities, such as lower interest rates and better credit card offers. To see what credit card offers are available to you, check out our CardMatch tool or review our list of fair credit cards and cards for those with no credit history.
Check for and report errors on your credit reports
Breaches are a top reason for checking those credit reports, and for good reason. We found in our recent data breach poll that Americans are more worried about identity theft than home burglaries. Some 46% said having their identity stolen would be worse, while 27% said a home break-in would be worse. And as consumers age, the spread is greater, with a 6-point difference for millennials and a 32-point difference for Baby Boomers.
But for all that fear, consumers are not protecting their data: Some 92% of U.S. adults have been guilty of at least one risky data security behavior within the past year.
What should you do? Besides varying your passwords (which 82% of consumers fail to do, it turns out), regularly check your credit files for mistakes. Notify the credit bureaus of any errors you find, no matter how small, because even a little one can be a sign that you’re a victim of fraud, and that can ultimately impact your score.
Are there credit cards for fair/average credit with instant approval?
Yes, there are cards that offer instant approval, even if you have fair/average credit. Instant approval cards can be a great way to learn within minutes if you are conditionally accepted as a cardmember. Just keep in mind that instant approval isn’t a guarantee that you will be granted the card – a more thorough check of your file will be conducted if you are allowed conditional approval. Plus, whether you can get approved or denied right away is based on if the company can verify your identity. In the case that your identity cannot be easily identified, the application process could take a few days. Focusing on cards that fit within your credit range is crucial to your financial health, and using the card responsibly is the key to strengthening your credit. Check out our list of the top instant approval cards to see if any are a good option for you.
What do I do if I’m rejected for a credit card?
If your hopes of landing a credit card of your dreams have been dashed, we can help. By taking the right steps, you can recover and get the card you want and need.
1. Get the explanation from the issuer
Issuers are required to explain to you why you were rejected. You might find out online, by phone or by mail – no matter which way, read the issuer’s feedback, then rectify the situation.
2. Check your credit score and credit reports
In general, it’s a good idea to check your credit reports several times a year. You can check them for free once a year at AnnualCreditReport.com. If you’ve been rejected by a card issuer, make a point of checking your credit files to make sure there are no errors or omissions.
3. Look at a credit-builder loan with your credit union
If your credit files are too weak for even a basic secured card, talk to your local credit union about getting a credit-builder loan. These loans are designed for improving your credit rather than getting money for a home improvement or car.
4. Catch up on your bills
Payment history has the biggest impact on your credit score. If you are behind on any bills, you should call the creditor and arrange to pay the past due amounts. After making your payments, you can request that the creditor rescind any reported delinquencies so they will no longer show up on your credit report. While this may be the slowest step, it is essential to improving your credit score. Finally, your more recent activity weighs more heavily, so those on-time payments are priceless.
5. Don’t close accounts
If you already have cards, don’t close them. Instead, pay them down and keep using them. Why? Because your payment history remains on your credit files for several years, good or bad, so you aren’t protecting your credit just by closing the account. In fact, the available credit on your cards helps your file, as does continuing to pay on time.
6. Wait several months
Wait several months before applying for a card again. Too many card applications too close together can mean desperation to a lender. Also, this gives your score a chance to improve.
7. Apply for a card you are reasonably sure you will get
In this case, don’t reach for the stars. Instead, choose a card to apply for that you are pretty sure you can get. If you are unable to qualify for an unsecured card, try a secured card to help build your credit.
What impacts your credit score?
Especially with this year’s economic uncertainties, understanding what does and doesn’t affect your credit score is more important than ever if you have fair credit. Almost half (47%) of the surveyed cardholders whose incomes were harmed since March did something to potentially damage their score, according to a July 2020 Bankrate survey.
- 17% added to their debt. Additionally, 8% carried a balance, thinking it would help their score.
Could hurt your: credit utilization ratio (and wallet)
- 12% paid a bill late, and 6% didn’t pay a bill at all.
Could hurt your: payment history
- 3% cancelled a credit card, thinking it would help their score.
Could hurt your: credit history
When you boil down the noise about what factors are and aren’t considered by FICO, we’ve found late payments, keeping your card balances full and bankruptcies have the biggest impact on your score.
There are many misjudgments around credit scores. According to VantageScore’s 2020 Survey, nearly half of Americans (48%) wrongfully believe that a person’s age impacts their credit score. Additionally, that same study found that only 33% knew that a credit score is meant to represent the risk of not repaying a loan, with 14% even thinking that it represents one’s knowledge of consumer credit. While that isn’t the case, improving your knowledge of credit scores is a great step in the right direction.
So what actually impacts your credit? It’s late payments, bankruptcies and high balances on credit cards that’ll hurt your score, we’ve found. According to FICO, credit scores are based on the following 5 factors, along with the percentage of importance to your score:
- Payment history: 35 percent – If you make a payment 30 days past the due date or later, it will most likely appear on your credit report. The later the payment, the worse the impact on your credit score.
- Amounts owed: 30 percent – The less available credit you are using, the higher your credit score will be.
- Length of credit history: 15 percent – This refers to the average account age of your accounts and the age of your newest account, which gets younger each time you open a new account.
- New credit: 10 percent – Each time you apply for a new credit card or loan, a hard inquiry will hit your credit.
- Credit mix: 10 percent – Having several types of loans – such as a car loan, a mortgage and a credit card – can help your credit.
As this shows, the most important things you can do to improve your credit are making payments on time and making payments in full. To view your current credit score for free and without impacting your score, check out our app.
How fast can credit improve?
The length of time it takes to improve your credit depends on the details of your financial situation. Along with your credit behavior, your starting score is a major factor.
For example, if you have no credit history, it will take a minimum of six months to establish a credit score. Credit score formulas require an active credit account to be present for at least six months before a score is generated.
If you are repairing damaged credit, however, it can take much longer to up your score. A person who only qualifies for a secured card, for example, can generally improve to fair credit within 12 to 18 months – with responsible card usage, of course.
While some people need to repair minor infractions, others have major issues to recover from. According to VantageScore, here are the approximate lengths of time it takes to repair credit based on your actions:
|Action||Avg. Recovery Time||Credit Score Impact|
|Applying for Credit||3 months||Minor|
|Closing an Account||3 months||Minor|
|Maxing Out a Credit Card||3 months||Moderate|
|Missing Payment / Default||18 months||Significant|
What activities affect your credit?
There are a number of factors affecting your credit, and VantageScore has identified which ones are more important than others. What makes one factor more important than another and what can you do about it? It has to do with how lenders see the behavior. Here are behaviors, how lenders view them and how much impact they have on your credit:
|Behavior||How lenders view this||Impact on your score|
|Pay bills on time||Wisely handling debt||Improvement|
|Not use all available credit||Sufficient access to credit, unlikely to need additional funds||Improvement|
|Hold accounts for long periods||Experienced credit user||Improvement|
|Use different types of loan products||Experience with different types of repayment requirements||Improvement|
|Inquire about or take out new loans||Are you just expanding access or taking on too much?||Slight drop|
|Max out credit cards or make first late payment||Potential signal of increasing risk||Drop|
|Pay multiple loans late; miss 3 or more payments||All credit at risk||Larger drop|
|Stop paying loan; foreclosure||Default||Major drop|
|Bankruptcy||Default||Maximum drop over extended time period|
How consumers with fair credit should use a credit card
When applying for a fair or average credit card, it is important to keep the goal of improving your credit in mind. Here are a few tips on how to properly use a fair credit card:
- Use your card to build credit. The most important aspect of using a card that requires fair or average credit is that you can build your credit with it, which will grant you access to better lending products.
- Keep your utilization ratio low. People with fair credit tend to have cards with low credit limits. To keep your balances low and avoid increasing your credit utilization ratio, make small, multiple payments throughout the month.
- Look for a card without an annual fee. By taking out a card with no annual fee, you minimize the costs incurred with card membership.
- Practice with rewards. Cards for fair or average cards will sometimes have rewards, such as 1% back on all purchases. This is a good way to practice for getting a rewards card down the road. Make sure you don’t carry a balance, because interest charges will negate your rewards.
- Don’t close your old card. Once your credit score has risen to the point that you can apply for a better card, don’t close or stop using your card for fair credit. By continuing to use it, at least for small charges, you keep the account active, continuing to build credit with it, and you increase your available credit.
Research methodology: How we choose the best cards for fair credit
Methodology: We analyzed 161 credit cards in the average credit range to identify the top products in the class. Core criteria we considered in our evaluation include:
- Credit building features: When building a credit score, it’s vital to have a card that regularly reports your payment habits and has flexibility with your credit limit. We looked for credit cards with perks that help bolster your credit history and make it easy to track your credit score.
- Base rewards program: Does the card provide any ways to earn rewards? Not all cards in the fair credit range do, but some options provide strong cash back earnings, attainable sign-up bonuses and rewards across several spend categories.
- Affordability: Does the card feature an annual fee? Additionally, are there any extra fees you need to watch out for? How high are the interest rates if you were to carry a balance? In other words, we considered how costly a card can be.
- Additional benefits: Some cards offer introductory 0% APR periods on purchases/balance transfers to help protect cardholders from tedious costs. Other protective benefits, like zero fraud risk, prequalification and many more, were also weighed during our analysis.
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