Having a credit card offers many advantages. Affected by an unexpected expense such as a flat tire or a broken water pipe? You can take care of it right away and pay the bill over time. You can also keep an itemized list of payments, apply for loans, and even earn rewards like airline points.
Having a less than perfect credit score is not a barrier to getting a credit card. There are many cards geared towards people with fair credit scores, and owning one is a great way to start building a solid credit history.
What is Fair Credit?
There are several metrics for measuring a credit score, but there are many banks and lenders use the Fair Isaac Corporation (FICO) model to calculate it:
- Arm: 300-579
- Honestly: 580-669
- Good: 670-739
- Very good: 740-799
- Extraordinary: 800-850
A reasonable credit score is below average, but it is an excellent springboard for better credit in the future. Many people start with a fair score when they first get a credit card. One of the best ways to increase your score is by make timely credit card payments, even if you only pay the minimum amount per month. Of course you need a credit card to get started.
The best cards for people with reasonable credit
Applying for one of these cards is a good idea if you want to improve your credit score.
Capital One Platinum credit card
This card is one of the best options if you have a reasonable credit score. It offers no annual or hidden fees. You can choose when your payment is due each month, and six months after opening your account and making regular payments, Capital One will consider you for a higher credit limit.
The downside is that the variable APR is 29.74%, which puts it at the higher end. The card also does not offer a rewards program. However, it does come with a $0 fraud liability and unlimited account access from your desktop or phone. You can also pay contactless by holding the card over a payment terminal.
Upgrade Cash Rewards Visa credit card
The Upgrade Cash Rewards Visa Card is a cross between a credit card and a personal loan card. It offers an APR of just 14.99% for those who qualify, although the APR can be as high as 29.99%, which is steep. You also do not get a sign-up bonus with this card.
However, the Upgrade Cash Rewards Card gives you 1.5% cash back on all purchases you make with it. This rate is comparable to what you would earn with cards that require good to excellent credit. In addition, the remaining balance that is transferred will be converted into an installment loan with a fixed monthly payment.
Credit One Bank Wander Card
Do you travel a lot? Credit One Bank’s Wander Card offers high reward rates for travel. It has an impressive program that gives you 5% back on hotels, restaurants, flights and even gasoline, making it good for everyday use and more adventurous excursions. In addition, it offers 1% back on other purchases and has an introductory offer of 10,000 bonus points. It is an unsecured credit card that does not require a security deposit.
The Wander Card is one of the few travel cards available to people with reasonable credit. However, if you don’t travel often, it may not be worth it – the main advantage of the card is the rewards program. With a fairly high APR of 28.24% and a $95 annual fee, there are cheaper routes to take if you just want to build credit.
Capital One QuicksilverOne Cash Rewards Credit Card
While the name is a mouthful, this card is an excellent option for those with reasonable credit. It only has a $39 annual fee and gives you at least 1.5% cash back on every purchase. You can also redeem rewards as statement credit. Within six months of regular payments, Capital One will automatically consider you for a higher credit limit.
You can pay contactless with this card. It comes with a free six-month Uber One membership and has a 5% cash-back reward when you book hotels and rental cars through Capital One Travel.
As with most credit cards offered to those with reasonable credit, the regular APR is high at 29.74% and you cannot increase your rewards earnings through bonus categories. And if you don’t travel often or make a lot of large purchases, you may end up paying more in annual fees than you earn back through the rewards program. However, it’s still a good option to start building your credit.
OpenSky secure Visa credit card
Visa’s OpenSky card requires a minimum $200 deposit, but has a modest annual fee of just $35. There’s no credit check when you sign up. Capital Bank can even approve your application for this card without any credit history, making it a great first credit card.
While it doesn’t offer a rewards program, the OpenSky card has a low running variable APR of just 21.64% and a simple application process. After six months of on-time payments, Capital Bank will consider you for an increase in your credit limit with no additional down payment required. This card also has a limit of up to $3,000, making it easy to keep your credit utilization ratio on the low side.
Petal 2 Visa credit card
The Petal 2 has a credit limit ranging from $300 to $10,000, no annual dues, and no security deposit. It offers 1% cashback on daily expenses and 1.5% cashback after one year of on-time payments. There are no costs associated with late payment, exceeding the credit limit or making a foreign transaction.
The variable APR can be as low as 17.49% if you qualify, but can also be as high as 31.49%, which is higher than most fair credit options. While this card doesn’t offer cash advances or balance transfers, nor does it have an APR intro offer, it’s a good option if you’re trying to restore a fair credit score.
Milestone Gold Mastercard
There is no deposit for the Milestone Gold Mastercard. However, it offers excellent security measures – it gives you protection against fraud without liability if someone steals your card or you lose it, and it also offers identity verification to protect your personal information.
This card has an annual fee of $35 to $99 and a high APR of 24.90%. It has no rewards program or introductory offer to help offset costs. However, one advantage of having a Mastercard is that it is a reputable brand, so just about any merchant will accept it.
Discover It Student Cash Back Card
Are you a college student? Then you can apply for the Discover It Student Cash Back Card. You don’t even need a credit history to qualify, making it great for those with less than excellent credit scores.
American students owe nearly $1.5 trillion in student loans as of 2019, but don’t let that put you off purchasing a credit card. Developing a good credit score is critical if you ever need to make a major purchase such as a home or car.
With this card, you can build more credit while earning 5% cash back rewards on many everyday purchases at select locations. For all other purchases you automatically receive 1% cashback. This card has no annual fee and offers a cashback matching program, which means that Discover will automatically match any cashback you’ve earned at the end of the year.
The regular APR ranges from 17.24% to 26.24%, but there is a 0% APR for anything you buy during the first six months of opening your account.
Mission Lane Visa credit card
While this card’s regular APR is steep at 26.99% to 29.99%, it has several positives for those with reasonable credit. You can access your account at any time via the mobile app. There is no interest as long as you pay on time and in full each month. There’s also no security deposit required, and Visa will consider you for a higher credit limit in just seven months of regular payments.
The annual fee can be as low as $0 to as much as $59, depending on how you qualify. Unfortunately, this card does not offer intro APR offers for balance transfers or purchases.
This card allows you to pre-qualify even if you have gone bankrupt. It has a low credit limit of just $300, and the annual fee ranges from free to $99, depending on your credit score. However, as long as you pay on time, it can strengthen your credit score and give your monthly budget some wiggle room.
You can use the Indigo Mastercard online, in apps and in stores that accept Mastercard. It also has a $0 liability for unauthorized charges and does not require a security deposit.
Climbing the credit ladder
It is common to have an honest credit score. For example, when you first get a credit card, you might have a fair score because you don’t have a credit history yet. You may also fall into the “fair” category if you’ve applied for multiple credit cards.
Banks and credit unions usually reserve the best cards for those with higher scores. However, you can work towards an upgrade by starting with a basic credit card that offers fewer benefits. If you make your payments on time and watch your expenses, you should have a good credit score in no time.