Credit cards for people with fair credit

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When you have fair credit, it can be difficult to get approved for new credit card accounts with attractive terms, which are usually reserved for people with good or excellent credit. So if your credit is just fair, you might end up applying for cards that are designed for people with bad credit. But you may be able to do better. What credit score exactly is considered fair credit can vary, but the credit bureau Experian defines it generally as a FICO® score between 580 and 669.

 

Having fair credit often results from a limited credit history or a history of significant credit problems. But people with fair credit are in a better position to get a credit card than those with bad credit. In either case, using a credit card responsibly can be a helpful way to work toward improving your credit history. So if you have fair credit, how can you find a top credit card for your individual needs? Fortunately, many credit card issuers have products specifically available to applicants with fair credit.

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These cards may have more generous rewards than cards for poor credit but less attractive benefits than cards for people with stellar credit records. And while most fair credit cards don’t have an annual fee, there are some that do. To choose the top cards in this category, we looked for issuers that are specifically marketing their cards to people who have credit between poor and good. We then looked for cards that offer compelling features such as cash back rewards, low fees, and valuable benefits.

How we chose the top fair credit cards

To find the top fair credit cards, we first divided the market into the following five categories:

  • Simple cards for fair credit
  • Simple student cards for fair credit
  • Top student rewards cards for fair credit
  • Top rewards cards for fair credit
  • Small business cards for fair credit

Then, we looked at more than a dozen major credit card issuers and credit unions to find the top cards in each of these categories. We included only cards that are offered to all applicants, leaving out products offered by credit unions that not everyone can join. And for each category, we looked at the most relevant factors. For example, top rewards cards need to offer the most valuable cash back rewards, while the top simple student cards for fair credit need to offer benefits that students would want, like 0% APR introductory financing. While credit card terms may change from time to time, the following rankings reflect information that was accurate in September 2021.

Top simple cards for fair credit

If you’re looking for a fair credit card, you may not need many bells or whistles. You may just want a basic card that allows you to build credit without enticing you to overspend or incur debt. For the top simple fair credit cards, we looked for cards that were easy to use. Just keep in mind that simplicity also means that these cards won’t offer rewards or other benefits that similar cards may provide.

If you want a simple card for fair credit: Capital One Platinum

The Platinum card from Capital One is a very straightforward card for those with fair credit. Since this is a simple card, there aren’t many benefits. However, the card does offer automatic consideration for a higher credit line in as little as six months. There are also no foreign transaction fees with this card. This card doesn’t have an annual fee, either. What you do get is a simple credit card from a major card issuer that can be your gateway to more full featured cards if your credit history improves.

Top simple student cards for fair credit

Due to their age and limited income, many students may fall into the fair credit category. For students who want a credit card to help them work on their credit history and to give them a reliable method of payment, a simple card specifically for students with fair credit may be just what they need. And since students tend to have limited income, we looked at cards that also offered 0% introductory APR to give them an opportunity to take a break from interest charges as they save for the future or try to get ahead on future payments.

If you want a simple student card for fair credit: BankAmericard Credit Card for Students

The BankAmericard Credit Card for Students is a simple card for students with fair credit. Although new account bonuses are rare for student cards, this card offers new cardholders the opportunity to earn a $100 statement credit after making at least $1,000 in purchases in the first 90 days of account opening. The card also offers an introductory 0% APR for 18 billing cycles for new purchases and balance transfers made within 60 days of account opening. There’s a 3% balance transfer fee for each transaction, with a minimum of $10. After the introductory APR, a variable APR between 12.99% and 22.99% applies. There’s no annual fee for this card.

Top student rewards cards for fair credit

Some students may want a card that gives them cash back rewards, but many such cards may be out of their reach due to their fair credit status. Thankfully, there are some rewards cards that are available to students with fair credit. To find the top student rewards cards for fair credit, we looked for cards with a straightforward rewards earning structure. After all, students have enough to think about without having to remember bonus categories!

If you want a student rewards card for fair credit: Capital One Quicksilver Student

The Capital One Quicksilver Student card is a rewards card that is specifically for students with fair credit. Capital One defines students as anyone currently enrolled or admitted and planning to enroll within the next few months at an accredited university, community college, or higher education institution. This card has a simple earning structure that may appeal to busy students. Earn an unlimited 1.5% cash back on every purchase. There are also no foreign transaction fees. This card doesn’t have an annual fee.

Top rewards cards for fair credit

Applicants with fair credit shouldn’t have to forgo a card that offers cash back rewards, if that is what they’re interested in. When looking at competitive rewards cards for fair credit, we considered it important to find a card that offers valuable cash back rewards without an annual fee.

If you want a rewards card for fair credit: Petal 2

Although issued from a lesser-known bank, the Petal 2 card offers a good cash back rewards structure that grows with you over time. The card is issued from WebBank, Member FDIC and runs on the Visa network. With this card, you earn 1% cash back right away on eligible purchases. But after making 12 on-time monthly payments, you can earn 1.5% cash back. Plus, earn between 2% and 10% bonus cash back at select merchants. Cardholders are eligible for a credit limit between $500 and $10,000, depending on creditworthiness. As an added bonus, there are no fees associated with this card. That means no late fees, foreign transaction fees, or any other fees. And of course, there’s no annual fee with this card.

Top small business cards for fair credit

Individuals aren’t the only ones who could benefit from fair credit cards; small business owners with fair credit may want to take advantage of these offers as well. However, there aren’t too many small business cards for small businesses with fair credit. We looked for cards with an easy earning structure for small businesses and with no fees.

If you want a small business card for fair credit: CapitalOne Spark Classic

The Capital One Spark Classic offers an easy rewards earning structure without many fees. Small business owners can earn an unlimited 1% cash back on all purchases with this card. Although its benefits are limited, the card does offer free roadside assistance and extended warranty on eligible purchases. This card doesn’t have foreign transaction fees. There is also no annual fee for this card.

The takeaway

Credit cards can help those with fair credit build a credit history and potentially a stronger credit score when other credit cards are out of reach. As with any credit card, it’s important to manage your card responsibly by paying your bill on time and avoiding debt. Since credit cards for those with fair credit may have more limited rewards and benefits than cards available to those with better credit, you may want to consider graduating to other cards if your credit improves.

 

However, these top fair credit cards are a great place to start and can offer many benefits for the right applicant.

 

This article originally appeared on lanterncredit.com and was syndicated by MediaFeed.org.

 

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Pros & cons of using a debit card online

 

These days, debit cards are accepted almost everywhere credit cards are accepted, both in-person and online. And that can be a game-changer for consumers who are trying to control their spending.

 

Unlike credit cards, which allow you to borrow money from the card issuer to pay for a purchase, debit cards only allow you to spend the money you have deposited in your checking account. As a result, consumers can’t rack up bills that they can’t afford to pay. However, debit cards may not offer the same perks and consumer protections against fraud that you often get with credit cards.

Read on to learn how to use your debit card wisely (and safely) online.

 

Related: 10 personal finance basics

 

DepositPhotos.com

 

Generally, if a website accepts a credit card for online purchases, it also will accept a debit card. You may not see debit cards listed specifically as a payment option on a merchant’s website. But if the front of your debit card has a credit network logo (such as Visa or Mastercard) and the business accepts credit cards from that network, you should be able to use it.

 

To use a debit card for an online purchase, you’ll want to check “credit card” as the payment method and then enter your debit card’s account number, expiration date and three-digit security code (CCV) to make the purchase.

 

Unlike debit purchases you make in-person, you won’t need to provide your PIN when purchasing something online. The reason is that the transaction will be treated as a “credit” transaction, which means that the transaction is pending (meaning waiting to be authorized, cleared and settled). The money will be deducted from your checking account around two to four days later.

 

Before an online debit transaction clears, you may see a difference between your checking account’s “current” balance, which includes only deposits and deductions that have actually cleared, and your “available” balance, which includes authorized transactions that haven’t yet cleared.

 

DepositPhotos.com

 

There are a few advantages to using a debit card as opposed to a credit card for online purchases that consumers may want to consider. These include the following.

 

DepositPhotos.com

 

Using a debit card to make online purchases may help reduce credit card use (and debt). When you shop with a credit card vs. a debit card, you’re borrowing money you’ll have to pay back later. If you don’t pay the debt back within a designated period of time, the lender is going to charge interest. And if you only pay only the minimum required to carry your balance each month, that debt could grow into a hard-to-get-rid-of burden.

 

Sign-up bonuses, discounts, cash-back offers and travel points can make it tempting to use a credit card for every purchase. But shoppers need to be careful about paying off those purchases on time or they could end up spending more on interest payments than they receive in rewards. When you use a debit card, you can’t spend more than you have at the moment. And because there’s no debt, there’s no interest to worry about.

 

stefanamer / istockphoto

 

While rewards and perks for spending are mostly associated with credit cards, many debit cards are now offering rewards programs as well, including cash back, points or miles every time you swipe your card.

 

 

DepositPhotos.com

 

Debit cards typically don’t have any associated fees unless users spend more than they have in their account and incur an overdraft charge. By contrast, credit cards may come with an annual fee, over-limit fees (if a purchase pushes their account balance over their credit limit) and late-payment fees, in addition to monthly interest on the card’s outstanding balance.

 

There is also typically no fee for withdrawing cash using your debit card at your bank’s ATM. If you use a credit card to get cash, on the other hand, you may incur a cash advance fee. You may also have to pay interest on the advance amount, which often starts accruing the day of the advance, not at the end of the statement period as with regular charges.

 

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There are some advantages to using a credit card over a debit card. Here are a couple of things to consider when making the choice to use a debit card online.

 

 

DepositPhotos.com

 

Have you ever heard someone complain that they couldn’t get a loan or credit card because they’ve never borrowed money? They thought they were being financially responsible, but the bank didn’t want to risk lending money to someone who didn’t have a history of making payments on a loan or line of credit.

 

That catch-22 extends to purchases made with a debit card. Even though your goal may be to stay fiscally responsible by making only debit (i.e. cash) purchases to avoid debt, you’re not helping your FICO score, which represents how responsible you are with borrowed money. And even though you may have marked the “credit” payment option when paying online, the money is still coming directly from your account, so it won’t directly impact your score.

 

DepositPhotos.com

 

You may have heard that it isn’t as safe to use a debit card online because federal laws don’t offer the same consumer protections that credit cards get. It’s true that there is a difference.

 

Credit card use is covered by the Fair Credit Billing Act, which provides a set procedure for settling “billing errors,” including unauthorized charges. If someone uses your stolen credit card account number to make online purchases, you generally aren’t responsible for those charges.

 

Debit card use is protected by the Electronic Fund Transfer Act, which also gives consumers the right to challenge fraudulent charges. Your liability depends on how quickly you report the problem, though, so you need to act relatively fast to get that federal protection.

 

If someone makes unauthorized charges with your debit card number and you didn’t lose your card, you aren’t liable for those transactions as long as you report the charges within 60 days of receiving your statement. You also could have zero liability if your card was lost or stolen and you report it before any unauthorized charges occur. If you report the lost or stolen card within two business days, your loss may be capped at $50. However, if you wait more than 60 calendar days after you receive your statement to make a report, and the thief goes on a shopping spree, you could lose all the money in any account linked to your debit card.

 

Some debit card issuers now offer “zero liability” protections that go beyond what federal laws provide. If your debit card is backed by Visa or Mastercard, for example, you may find you have the same protections they offer their credit card users. (You may want to check with your financial institution to verify this coverage.)

 

DepositPhotos.com

 

Many credit cards offer purchase or damage protection, which means that if the item you buy is damaged or stolen within a specified period of time, you can get your money refunded. Credit cards may also offer extended warranties on electronic purchases and well as travel perks, such as rental car insurance. Debit cards are less likely to offer these perks.

 

Oat_Phawat / iStock

 

To protect your identity while shopping online with your debit card, you may want to follow these simple precautions:

  • Looking for the lock. When making purchases with your debit card online, it’s a good idea to make sure you’re shopping with a reputable company and on a secure website, especially when it’s time to enter your card number. A good safeguard is to look for the locked padlock icon in your browser. It can also be a good habit to log out of a site as soon as you finish shopping.
  • Monitoring your statements. It can be wise to regularly check your checking account and scan for any debit charges you don’t recognize. That’s because the faster you report a problem, the less trouble you should have recovering from any fraudulent activity.
  • Using a secured network at home. You may want to avoid shopping or paying bills when you’re using public WiFi. Even secured public networks have some risk. And you never know who might be watching over your shoulder when you enter a password or other personal information.
  • Keeping your card and account number, to yourself. Giving your card or account number to a friend or family member could lead to trouble down the road, including charges you didn’t expect. And it may be difficult to recover any lost funds because the usage may not be considered unauthorized. If you want to allow someone you trust to use your account on a regular basis, consider adding them officially as an authorized user.

 

DepositPhotos.com

 

Debit cards can be used online for most purchases and can be a great way to manage your spending. They generally don’t come with the annual fee and other fees found with some credit cards. Plus, they don’t allow you to rack up debt because you aren’t offered a credit limit that’s higher than your checking account balance.

 

However, credit cards often come with more perks and purchase protections than debit cards. And responsible use of a credit card can be a good way to build your credit score.

 

Learn more:

This article originally appeared on SoFi.comand was syndicated by MediaFeed.org.

 

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