Best Credit Cards for Fair Credit

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If you have fair credit (between a FICO score of 650 and 699), you’ve likely made a few financial mistakes in the past. But the good news is that a higher credit score is well within your reach and a credit card may be able to help. As someone with fair credit, your primary credit card hurdle will likely be qualification, as many credit cards require applicants to possess good to excellent credit scores. So, I focused my search on cards available to those with bad to fair credit, that allow you to monitor your credit score, and that offer educational tools and opportunities for credit line increases.

The Simple Dollar’s Top Picks for Best Credit Cards for Fair Credit

Top Picks for Best Credit Cards for Fair Credit

Best Secured Card with a Variable APR

Apply Now on Discover's secure website

Discover it® Secured Highlights
Card Highlights Provided by Discover:
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It’s a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • We automatically match all the cash back you’ve earned at the end of your first year.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.

When you think of traditional credit cards, unsecured credit cards are what come to mind. These cards extend an actual line of credit to you. Secured credit cards, on the other hand, require a cash deposit that you can borrow against. Because they report your credit score to the three major bureaus each month, secured credit cards are an excellent way to build or rebuild your credit score — so paying your bill on time each month and following your card’s terms and conditions are crucial.

Of these cards, the Discover it® Secured is my top pick. First and foremost, the card is unique in that it has no annual fee. And — like Discover it® Student Cash Back and Discover it® Student chrome — Discover matches all the cash back you’ve earned at the end of your first year. At that time, Discover also automatically reviews your account and overall credit management across all your other credit cards and loans to see if your security deposit can be returned and you can transition to a traditional Discover credit card.

Best Secured Card with a Fixed APR

Apply Now on UNITY's secure website

UNITY® Visa Secured Credit Card Highlights
  • Limited Time Offer: New cardmembers get a $25 rebate* - To be eligible, applications must be submitted between now through 12/31/16 and accounts must be in good standing for 90 days after opening.
  • Unlike your Prepaid Card, UNITY Visa secured card can help you build your credit. Apply online in less than 5 minutes, and you could be approved today!
  • No Minimum Credit Score required; low fixed interest rate of 17.99%; Fully refundable FDIC security deposit* required at time of application; if you have a min of $250 to deposit immediately, you can start now!
  • No application fee or penalty rate
  • Monthly reporting to all 3 major credit bureaus
  • 24/7 online access to your account
  • *See the Cardholder Agreement for more details.

If you are looking to grow your credit score, you likely don’t need a reminder that you should be paying off your card every month. There are some situations, however, wherein you must carry a balance from month to month. In those rare cases, I’d recommend the UNITY® Visa Secured Credit Card. One of its selling points is its interest rate: 17.99%. This interest rate is not only low, but also fixed, which means it stays the same regardless of any fluctuation in the market interest rates. In general, most people with fair credit can expect to get an interest rate between 20-25%.

As I’ve said before, you don’t want to carry a balance from month to month. UNITY® Visa Secured Credit Card’s How to Rebuild Credit program advises the same. In addition to reiterating many of my recommendations, the program provides you with a nine-step guide to improving your credit score. The program offers plenty of financial tips, too, as does UNITY®’s secured credit card blog.

Best Fair Credit Card for Students

Apply Now on Discover's secure website

Discover it® Student Cash Back Highlights
Card Highlights Provided by Discover:
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants or Amazon.com up to the quarterly maximum each time you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 14.99% - 23.99%.

As we’ve detailed in the past, Discover it® Student Cash Back provides several benefits: It helps you build your credit and earn cash back for necessary expenses while serving as an emergency line of credit to be used in an urgent situation, such as an unexpected trip to the ER (not an unexpected trip to Amazon).

Discover it® Student Cash Back is the best choice for most students, offering 5% cash back at different places each quarter like gas stations, grocery stores, restaurants or Amazon.com up to the quarterly maximum each time you activate. Plus, 1% unlimited cash back automatically on all other purchases.

Apply Now on Discover's secure website

Discover it® Student chrome Highlights
Card Highlights Provided by Discover:
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 14.99% - 23.99%.

Some students, including those who haven’t mastered the art of cooking in their dorms or those who make frequent trips home, will benefit more from the Discover it® Student chrome card rather than Discover it® Student Cash Back. With this card, you receive 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter — there are no signups necessary — along with 1% unlimited cash back automatically on all other purchases.

Both cards offer additional benefits, including a $20 statement credit each school year your GPA is 3.0 or higher for up to the next five years, and a cash back match at the end of your first year. And to help you build good credit, Discover offers FICO® Credit Scores for free on statements and online, and doesn’t charge a late fee or change your APR the first (and hopefully last) time you make a late payment.

Best Fair Credit Card for Members of the Military

USAA is a well-respected organization, so it’s no surprise that the USAA Classic Platinum Visa® is my top pick for members of the military. The card doesn’t charge a foreign transaction fee, and it grants you a 4% interest rate on all balances for up to 12 months during deployment or PCS. Similarly, with the card’s special Servicemember’s Civil Relief Act rate, you receive a 4% APR on your existing balance until one year after you complete active duty. Plus, the USAA Classic Platinum Visa® rebates all finance charges you accrue while serving in qualified military campaigns.

The downside to this card is that balance transfers aren’t available, so you can’t transfer existing credit card debt. You can, however, boost your credit score by consistently making payments on time, so you’ll be periodically considered for an automatic upgrade to a premium credit card.

I’d also like to note that this card nearly tied with its counterpart, the USAA Classic American Express®, with the deal breaker being that Visa® cards are accepted at more places than American Express®.

Best Fair Credit Card for Gas and Groceries

Barclaycard Rewards MasterCard® is ideal for those who want to earn cash back on your everyday purchases while building your credit. The card earns you 2X points on gas, utility, and eligible grocery store purchases, plus 1X points on all other purchases. Before you sign up, keep in mind that those rewards exclude Target® and Walmart® purchases, and be sure to check if your utility company charges a service fee for paying with a credit card.

In addition, Barclaycard Rewards MasterCard® provides you with a free FICO score on your monthly statement, and after six months, accounts may be automatically reviewed to determine eligibility for a credit line increase.

If you’re more of a gearhead, or just find yourself spending a lot of money on your car, Official NASCAR® Credit Card from Credit One Bank® offers similar credit-building tools, but with rewards for gas and automotive purchases.

Best Fair Credit Card for Cash Back

Learn More on Capital One's secure website

Capital One® QuicksilverOne® Cash Rewards Credit Card Highlights
  • Earn unlimited 1.5% cash back on every purchase, every day
  • Earn cash rewards without signing up for rotating categories
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Monitor your credit profile with the CreditWise® app, free for everyone
  • $0 fraud liability if your card is ever lost or stolen
  • No limit to how much cash back you can earn, and cash back doesn't expire for the life of the account
  • Help strengthen your credit for the future with responsible card use
  • Get customized alerts and manage your account with the Capital One mobile app

Unlike many cash back credit cards, Capital One® QuicksilverOne® Cash Rewards Credit Card doesn’t involve rotating categories — gas stations one quarter, and restaurants the next — or their corresponding signups. Some of us (e.g., me) are terrible at keeping track of signup deadlines and are thus grateful.

Instead, you receive 1.5% cash back on all purchases, with no limit. Except, of course, your credit limit. Fortunately, Capital One® QuicksilverOne® Cash Rewards Credit Card offers you the opportunity to increase your line of credit with Capital One®’s Credit Steps program after you make your first five monthly payments on time. Standard Capital One® features, including fraud coverage, personalized payments, and account alerts, are included, as are Platinum MasterCard® benefits, such as auto rental insurance, price protection, and 24/7 travel assistance.

In terms of educational tools, Capital One® QuicksilverOne® Cash Rewards Credit Card partners with CreditWise®, an app that not only allows you to view your credit score for free, but also informs you of key factors impacting your credit and uses a credit simulator to show you how potential decisions may affect your credit score. It should be noted, however, that even if you aren’t a Capital One® customer, you can still access CreditWise® for free.

Did You Know?

Three Ways to Boost Your Credit Score

Whether you’re seeking a credit card or auto loan, having fair credit limits your financial options. Fortunately, there are numerous ways to grow your score, so you receive better interest rates on financial products and qualify for credit cards with higher limits and extensive perks, such as high cash back rates and large discounts on travel. Improved credit also saves money in a less obvious way: The higher your credit score is, the lower your interest rate will be on credit cards and loans, saving you a lot of money over time.

Check for errors in your credit reports.

No one is perfect — even the Big Three credit reporting bureaus! In fact, a 2012 Federal Trade Commission study found that 5% of consumers had errors in one of their three major credit reports, which could result in a higher price for a financial product, such as a loan or insurance.

The good news is that the study also found that one in five consumers had an error that was corrected by a credit reporting agency after it was disputed. Federal law allows you to obtain a free copy of your credit report every 12 months, so visit AnnualCreditReport.com and do just that. In particular, keep an eye out for any incorrectly listed late payments, which have a huge effect on your score.

Minimize outstanding debt.

If you have debts in collection or default, start there. In some cases, including with medical bills, you may be able to negotiate down your payments or seek other financial assistance. Then, start paying down your other debts. If those include credit cards, focus on the cards that are closest to their credit limit first. And try to make more than the minimum payment — even if it’s just an additional $5 or $10 or a set of two minimum payments each month. You’d be amazed at the difference such a seemingly small amount makes.

Keep paying your bills on time!

Your payment history is the most influential factor in your credit score. So, pay all your bills on time and in full. I’d suggest setting up an autopay option whenever possible along with an alarm, calendar event, or reminder. At this point, most of the recurring events in my calendar are finance-related. If you’re not a fan of autopay, then I’d suggest sitting down after each paycheck — before you spend any of it — and paying all your bills through the next pay period in one go.

The Bottom Line

As someone with fair credit, you should be working on rebuilding your credit in order to improve your score and qualify for higher credit limits along with better interest rates and card perks. All of the top picks include an element of assistance for rebuilding your credit. If rebuilding your credit is your sole objective, I recommend a secured credit card, specifically Discover it® Secured or UNITY® Visa Secured Credit Card.

You may have other financial goals, though, in which case you should choose the card that best fits your personal needs. USAA Classic Platinum Visa® is your best bet as a military member, whereas students benefit most from Discover it® Student Cash Back or Discover it® Student chrome. And although they aren’t as impressive as the perks for those with excellent credit, Barclaycard Rewards MasterCard® and Capital One® QuicksilverOne® Cash Rewards Credit Card offer cash back rewards.

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