Navigating the credit card landscape with fair or average credit (typically a FICO score in the 630-689 range) can be challenging, but there are credit cards tailored for individuals in this credit score bracket. While they may not boast the hefty sign-up bonuses of cards designed for excellent credit, these cards can still offer valuable features and benefits. Here’s a roundup of the best credit cards for fair or average credit as of January 2024:
Capital One QuicksilverOne Cash Rewards Credit Card
Our Pick for: Flat-rate Cash Back
This card extends the same cash-back rate as the regular Quicksilver card but is designed for those with fair credit. The primary distinction is the presence of an annual fee, unlike its regular counterpart. The card is an excellent choice for flat-rate cash back rewards.
Upgrade Cash Rewards Visa®
Our Pick for: Cash Back + Flexibility
The Upgrade Cash Rewards Visa® combines elements of a credit card and a personal loan, offering flexibility with predictable terms. The card allows you to assess the terms you qualify for before officially applying, and it comes with no annual fee.
Capital One Platinum Credit Card
Our Pick for: Simplicity
While lacking rewards, a sign-up bonus, or a 0% introductory period, the Capital One Platinum Credit Card is ideal for those with fair credit who need a no-annual-fee card to build credit.
Petal® 1 Visa® Credit Card
Our Pick for: Cash Back with Select Merchants
Petal® 1 assesses creditworthiness based on factors beyond credit scores, such as income, expenses, savings, and debts. The card earns a decent cash-back rate, particularly with select merchants, and comes with no annual fees, late fees, or foreign transaction fees.
Mission Lane Cash Back Visa® Credit Card
Our Pick for: Prequalification + Up to 1.5% Cash Back
For individuals uncertain about their credit eligibility, the Mission Lane Cash Back Visa® offers a prequalification process. This process allows you to see the potential offer, which could include up to 1.5% cash back, before submitting an official application.
Prosper® Card
Our Pick for: Help for ‘Less Than Perfect Credit’
While lacking rewards and charging an annual fee, the Prosper® Card actively encourages individuals with “less than perfect credit” to apply, making it a suitable starting point for credit building.
Discover it® Student Chrome
Our Pick for: Rewards for College Students
Tailored for students seeking their first credit card, the Discover it® Student Chrome stands out with cash back bonus at restaurants and gas stations. The card simplifies rewards with no activation requirements or rotating categories.
Capital One® Spark® Classic for Business
Our Pick for: Small Business
While not featuring an impressive rewards rate or a sign-up bonus, the Capital One® Spark® Classic for Business is valuable for business operators with fair credit, offering options in the limited landscape of business credit cards for this credit tier.
What is Considered Fair or Average Credit?
Fair credit, commonly known as “average” credit and falling within the 630-689 range on the FICO scale, indicates a moderate risk level for potential lenders, situating it between poor and good credit. Factors influencing these scores encompass credit utilization, payment history, credit history length, credit types, and recent credit applications.
In the pursuit of early retirement, individuals with fair credit might encounter credit cards tailored to their needs. However, optimizing access to top-tier credit cards with exceptional rewards often necessitates a credit score enhancement. It becomes imperative to comprehend the credit card specifically crafted for your score range, ensuring improved approval chances and preventing unwarranted negative impacts on your credit report.
How a Credit Card Helps Improve Fair Credit
Credit cards designed for fair or average credit can serve as tools for credit improvement when used responsibly. Key factors influencing credit scores include:
- History of Payments: Paying your credit card bill on time is crucial, as the history of your payments is the most significant factor in credit scores. Paying in full each month is advisable to avoid high-interest charges.
- Credit Utilization: A low credit utilization ratio (the amount owed relative to the credit limit) positively impacts credit scores. Responsible credit card usage helps in achieving and maintaining a low utilization rate.
- Credit Mix: Credit scoring models reward individuals who can handle different types of credit. A combination of revolving accounts and loans, such as credit cards, can positively influence credit scores.
- Length of Credit History: The duration of credit usage affects credit scores. Opening the right credit card at an early stage can contribute positively to the length of credit history.
- Recent Credit Applications: Applying for new credit may result in temporary score dips. Strategic and targeted applications for the right credit card can minimize potential negative impacts.
What to Know Before Applying for a Credit Card
- Know Your Credit Score: Understand your current credit score to identify cards tailored for your score range. Continuous applications for the wrong cards can harm your credit.
- Learn from Rejections: If rejected, determine the reason by reviewing the notice from the bank. Check for inaccuracies in your credit report and the submitted application. Consider contacting the issuer for reconsideration.
- Apply for the Right Card: Choose a credit card aligned with your credit score to increase approval chances. Tailoring your application to your credit range minimizes the risk of rejection.
- Understand Fees: Be aware of the different fees relevant to the credit card, such as annual fees, balance transfer fees, foreign transaction fees, and late-payment fees. Responsible usage can help avoid unnecessary fees.
In conclusion, credit cards designed for fair or average credit provide valuable opportunities for credit building. By selecting the right card, understanding its features, and using it responsibly, individuals can pave the way toward improved creditworthiness. Remember, the journey to excellent credit involves strategic card selection, responsible usage, and continuous monitoring of credit scores.
