Best Credit Cards for Fair Credit

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.

In this article

    Best Secured Card with a Variable APR

    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. 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

    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 low purchase interest rate. 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 for College Student

    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 grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. Plus, 1% unlimited cash back automatically on all other purchases.

    Best Fair Credit Card for Students

    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.

    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. 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.

    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.

    Please Note: Information about the Discover it® Student Cash Back, Discover it® Secured, Discover it® Student chrome and Capital One QuicksilverOne Cash Rewards Credit Card have been collected independently by TheSimpleDollar.com. The issuer did not provide the details, nor is it responsible for their accuracy

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