Best Credit Cards for Fair/Average Credit of June 2024 | Bankrate (2024)

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Why your credit score matters

Your credit score doesn’t just impact how much interest you pay on loans. It plays a much bigger role:

• Renting an apartment: When you rent an apartment or condo, your landlord may run a credit check to determine how likely you are to be a good tenant. The same factors that impact your credit score the most (your repayment history and the amount of debt you carry) could affect your application.
• Buying a home: With a lower credit score, you may not qualify for a conventional mortgage. This factor can make it harder to buy the home you want, as many sellers prefer conventional loans over government-backed loans.
• Insurance costs:In most states, insurance companies use your credit history to help determine how much you pay for insurance. A good credit score could save you hundreds or even thousands of dollars when buying auto or homeowners insurance.
• Utilities and phone plans: Utility companies and phone carriers also run credit checks to determine how well you manage your finances. A lower score could mean having to put down a deposit for service or phone plans.
• Credit limits: Not all credit cards for fair credit have high limits. Depending on your credit score, you could end up with a credit limit as low as $200 to $300, making it difficult to build credit, especially if you use too much of your available credit.

Do you need a secured card?

A secured card can be a handy financial tool if you’re starting your credit journey but aren’t ready for an unsecured card (or would rather avoid the annual fees typically required on unsecured credit-building cards).

Secured credit cards can be especially helpful since many charge no annual fee and give you a chance to set your own credit limit. Since secured cards usually use your deposit as the basis for your credit limit, they give you more control as you work on keeping credit utilization low (a key credit scoring factor).

That said, if you’re confident in your ability to use a credit card, an unsecured credit card could be a better choice. Unsecured cards don’t require an upfront deposit, which may be preferable if you’d rather not tie up money for months as you build credit. And while your starting credit limit might be lower than it would be with a secured card, many unsecured credit cards offer a chance at a higher credit line after a few months of positive payment history.

When looking for a credit card with fair credit, it’s best to get advice from others who have already gone through the process and can recommend specific strategies or even specific cards.

Redditors from the r/CRedit community recommended that those who have credit scores in the 600 range look at cards from Discover and Capital One, specifically the Discover it® Secured Credit Card and the Capital One QuicksilverOne Cash Rewards Credit Card. Many users cited these cards’ rewards as a key draw.

Other users suggested anyone in the military or who has a family member that served in the military consider cards from Navy Federal Credit Union.

No matter what card you decide on, many of the users suggest trying to prequalify for the card through the issuer first to get a sense of your odds of approval without adding a hard pull to your credit report. Another method of avoiding a hard pull is to get preapproved through tools like Bankrate’s CardMatch, which lets you see which cards you’ll most likely get approved for based on your credit history.

*The quotes and citations included on this page have been verified by our editorial team and are accurate as of the posting date. Be sure to check the issuer's website/terms and conditions for all up to date content. Outlinked content may contain views and opinions that do not reflect the views and opinions of Bankrate.

• Pay your bills on time and avoid debt

  Missing a credit card paymentcan hurt your score and might stay on your credit report for up to seven years. The later a payment, the worse it is for your credit score.

  Plus, not paying your balance in full can lead tocredit card debt, especially if you have a high APR. Paying the balance on your card in full each month is a key way to work toward a higher score.

• Check your credit report

  Incorrect information on your credit report — even something as simple as a misspelling of your name — could keep your credit score lower than it should be. You’re entitled to a free copy of your credit report once every 12 months, so check your report for any discrepancies and find out how todispute errors. Your report is also a great way to keep track of your progress as you build credit.

• Wait before opening new accounts

  Opening too many new accounts at once can actually hurt your score because it can look suspicious or like you're in financial trouble. In fact, some issuers have rules that prevent applicants from opening up too many cards in a certain amount of time, such asChase's 5/24 rule. Once you’ve applied and an issuer approves you for a credit card for fair credit, use it responsibly for a while to demonstrate your ability to handle new credit. Overall, be patient andwait between credit card applicationsto benefit your score.

• Consider keeping older credit accounts open

  A credit card that you’ve had for a long time adds to your length of credit history, a significant contributor to your credit score. If you outgrow your credit card for fair credit, don’t close it right away. If it doesn’t have maintenance fees,keep the account openand active to boost your score.

Our data: How having good credit can increase your chances of approval

Learn more:Your New Year’s credit card debt payoff plan

When evaluating the best cards for [students / building credit], we consider a mix of factors, including how cards score in our proprietary card rating system and whether cards offer features that make it easy to build credit history while minimizing costs.

We analyzed over 50 of the most popular cards designed for [students / people with no credit history, bad credit or a fair credit score] and rated each based on its cost, APR, credit-building features and more to determine whether it belonged in this month’s roundup.

Here are some of the key factors that we considered:

Learn more:How we rate our cards