Best Credit Card for Fair Credit

One benefit of a credit card is that you don’t need perfect credit to get one. While some credit cards are tailored to people with good or excellent credit, other cards are designed specifically for people with fair or average credit. So whether you’re looking to reestablish or improve your credit history, there’s a card for your spending lifestyle and credit range.

But while finding the right credit card for your wallet isn’t too hard, you’ll find that some credit cards are more suitable than others. Here’s what you need to know about credit cards for fair credit.

Discover the Best Credit Cards for Fair Credit

What is Fair Credit?

Before going any further, it’s important to understand what constitutes fair or average credit. Credit scores are three-digit numbers (ranging from 300 to 850) used by the lender to assess how well you manage debt and payments. During your early credit days, it’s not uncommon to have a lower score. Credit scores slowly increase with time. So the longer you have a credit file, and the more responsible you are with your credit, the higher your personal rating.

Each bank has their own guidelines for what they consider to be bad credit, fair credit, good credit and excellent credit. Typically, fair credit is a credit score between 580 in 669,  according to Experian.com.

Why Should You Care About Credit Scores?

With a fair credit score, you’ll likely meet a bank’s basic requirements for getting a credit card or a loan. But although fair credit allows for financing, you might not receive the same favorable terms as someone who has good credit or excellent credit, hence the importance of coming up with a plan to increase your score.

Building a stronger credit history can open the door to better financing opportunities. The truth is, your credit score affects just about every aspect of your life. If you buy a house, a car or apply for a student loan, many banks will review your credit to evaluate your payment history, and then base your approval and interest rate on your credit history and credit score.

Similarly, if you move into a new house and set up utility services, many companies will check your credit beforehand. And oftentimes, your credit history dictates whether you’ll need a security deposit. A utility company may waive the security deposit if you have good credit or excellent credit, but require a deposit if you have bad or fair credit.

Progressing from fair credit to good credit takes time, so be patient. Keep in mind that the more you use credit, the faster you can improve your score. So if you have fair credit and looking to boost your score, getting a credit card for fair credit might be the answer.

Pros and Cons of Credit Cards for Fair Credit

Even though you can get a credit card with a fair credit score, you won’t qualify for every type of card on the market. Some credit cards are specifically for people who have higher scores. And if you apply for one of these cards, the credit card issuer might deny your application. To avoid the hassle of a rejection, search out credit cards for fair or average credit, and make sure you understand the advantages and disadvantages of these cards.

Advantages of credit cards for fair credit:

  • Cardmember benefits. Credit cards for fair credit not only accommodate lower credit scores, many of these cards offer the same cardmember benefits as cards designed for people with good credit or excellent credit. Benefits vary by credit card, so make sure you understand a card’s benefits before applying. These benefits might include an extended warranty on purchases made with the credit card, price protection, rental car coverage and a rewards program that lets you earn points, miles or cash back for every dollar you spend.
  • Opportunity to increase your credit rating. If you’re looking to improve a fair credit score, get a credit card and practice good credit happens to demonstrate creditworthiness. For example, keep your balances low and pay your bill on time every month.

Disadvantages of credit cards for fair credit:

  • Higher interest rates. Because you don’t have the highest credit rating, you’ll pay a slightly higher interest rate than someone who has excellent credit. But although higher rates are typical with fair credit cards, you shouldn’t settle for any credit card rate. Shop around and compare rates to find a competitive offer. To minimize how much you pay in interest, pay off your card balance in full every month.

Lower credit limits. Another downside to these credit cards is that some come with a lower credit limit. When you apply for a credit card, credit card issuers determine your credit line based on different factors, including your income, your credit and how much you currently owe on other credit cards. People with fair credit are riskier applicants; and because of this higher risk, you might receive a credit card with a lower limit. So whereas someone with excellent credit might receive a credit card with a $1,000 credit limit, the bank might cap your credit limit at $500. To qualify for a higher credit limit later on, always pay your bills on time and don’t max out your card. Make sure your balance doesn’t exceed 30% of your credit line.

What to Compare When Shopping for a Credit Card for Fair Credit?

Choosing the right credit card is a big decision, and it takes time to narrow down your options. As you compare credit cards offered by different banks, there are several things to consider.

  1. Credit card fees

Credit cards charge a variety of fees, which is how credit card issuers make money. To minimize your out-of-pocket costs, be sure to compare fees. Find out how much the credit card charges for annual fees, balance transfer fees, foreign transaction fees and late payments.

Do a side-by-side comparison of at least three or four different credit cards. If you stumble upon a card charging an annual fee, research the card to see what you’re getting for the money. The card might be worth the fee if you’re able to utilize most of its benefits.

Then again, maybe you travel frequently to foreign countries. If so, look for a credit card that doesn’t charge a foreign transaction fee. Are you thinking of consolidating your credit card debt onto one card? You can save money by searching for credit cards that don’t charge a balance transfer fee.

  1. Interest rates

A credit card’s interest rate is another factor to take into consideration when applying for a card. The amount you pay in interest often depends on your percentage rate and your credit card balance. The higher your credit card interest rate, the more you’ll pay in interest. As you compare credit cards, specifically look for cards charging a low, competitive rate. Since you only pay interest when you carry a balance from month to month, commit to paying off your credit card balance every month to avoid interest charges.

If you can’t pay off the card’s balance monthly, apply for cards that charge the least amount of interest. Also, keep an open eye for credit cards that offer 0% interest on purchases and balance transfers for the first six to 18 months. This rate is temporary, so only apply if you can pay off a balance transfer within the introductory rate period.

  1. Incentives

If you’re planning to use your credit card frequently, search for cards offering some type of incentive. These are usually in the form of a rewards program. Through these programs, you can earn miles, points or cash back for every dollar spent on the card. Pick a rewards program that fits your lifestyle. Let’s say you’re a frequent traveler. In this case, make sure you look for a card that offers airline or travel rewards. Or if you complete most of your shopping online, a cash back rewards credit card might be a better fit. You can earn a higher percentage of cash back when purchasing items through the credit card company’s online shopping portal.

  1. Frequency of credit reporting

If you have fair credit and you’re looking to improve your credit score, get a credit card from a company that reports to the credit bureaus. Credit reporting information might be found on the credit card application. If not, call the credit card issuer to see how often the bank reports credit activity, and find out which bureaus the bank reports to. Ideally, you want to build a relationship with a credit card company that reports to the three major bureaus (Experian, TransUnion, and Equifax) on a monthly basis.

How to Progress From Fair Credit to Good Credit?

Even though you can get approved for financing with fair or average credit, you may not receive the best credit terms. People with the highest credit scores enjoy the lowest interest rates, which saves them money in the long run. If you want to reap similar savings, here is what you need to do to achieve a better credit rating.

  • Get a copy of your credit report. Being a victim of identity theft and having errors on your credit report can lower your score. Order a copy of your credit reports at least once a year. Dispute any inaccurate information or fraudulent accounts by contacting your creditors directly to report errors, or file a complaint with the credit bureaus. To get your free credit reports, visit AnnualCreditReport.com or request a copy of your report from each of the credit bureaus. You’re entitled to one free credit report from the three major bureaus a year.
  • Pay down credit card balances. Your credit utilization ratio—which is the percentage of your outstanding debt compared to your available credit—also determines your credit score. You should keep your credit utilization ratio to less than 30%. So if you have three credit cards each with a $1,000 credit limit (for a total credit limit of $3,000), your total balances for all three cards should not exceed $900. If you have high credit card balances, stop using these cards and begin paying more than your minimums. Once these cards are paid off or paid down, only charge what you can afford to pay off every month. The amount you owe makes up 30% of your credit score
  • Don’t cancel your oldest credit cards. Keep your oldest credit card accounts opened, even if you don’t use these cards. Closing an older credit card account could shorten the length of your credit history and lower your score. The length of your credit history makes up 15% of your credit score.
  • Maintain a credit mix. Diversifying creditor having a “credit mix” demonstrates an ability to manage different types of accounts, which benefits your credit score. Rather than stick with only one type of credit account, apply for other types of credit over the years, such as an installment loan. The types of credit you have makeup 10% of your credit score.
  • Don’t apply for too many accounts at once. If you’re thinking about diversifying and adding new types of credit to your personal file, don’t apply for too many new accounts at once. Spread out credit applications to avoid damaging your credit score. This is important because each credit inquiry (or application) can lower your score by two to five points. If you recently applied for credit and you’re thinking about applying for another credit account, space out your applications at least six months apart. New accounts make up 10% of your credit score.
  • Pay your bills on time. Continuing to pay your bills on time is another way to progress from fair credit to excellent credit. Payment history makes up 35% of your credit score. To ensure timely payments, don’t procrastinate or wait until the last minute to pay bills. Pay statements as soon as they arrive, or set up auto pay to prevent overlooking a due date.


A fair credit score isn’t necessarily a bad thing. But if you’re looking to get easy financing and the best interest rates, a higher score can open the door to better financing deals. Continue to practice good credit habits and monitor your credit score – pay your bills on time, check your credit report and pay down your debt.