- Occasional Late Payment: 35% of your credit score is based on payment history. Whether your payment is 1 day late or 30 days late, it’s classified as a “30 day late payment” if the issuer reports to the credit bureaus.
- Carrying High Balances: Using too much of your credit limit is bad for your FICO score. So if you currently have any cards that are maxed out or close to it, a credit card for fair credit will probably be easier to get approved for.
- Bad Debt: Even just one bad debt or account written off will significantly bring down your credit score. It stays on your report for at least 7 years, but will have the greatest impact during the first 2-3. If this has happened to you, your credit might be classified as "fair."
- Limited Credit History: Are you relatively new to credit or have you rarely used it in the past? If so, then you probably fall under this category.
*Top Pick* Capital One® Cash Rewards
Not only is this one of the best cards for fair credit… it’s one of the best credit cards, period! Why? Because it offers an extremely generous cash back program (and without the usual tricks hidden in the fine print). There is no minimum amount of cash back required for redemption, so you can redeem your rewards whenever you want!
- You earn an unlimited 1% cash back on all purchases. Then you also receive a 50% bonus on all the cash back you earn each year. When combined, that means you are earning a total of 1.5% cash back!
- The cash rewards don't expire and you can redeem them at any time.
- You get a 0% intro APR on purchases until February 2014. After that, 19.8% (V) is the regular APR.
- The annual fee is $39
Capital One® Platinum Credit Card
This is an excellent choice for those with a limited credit history. Why? Well for starters, with this card you will get to enjoy Platinum benefits such as the extended warranty program, auto rental insurance, 24-hour travel assistance services, and more. Best of all, you get all this for a very reasonable annual fee.
- You have the option of customizing your credit card’s design. Upload your own picture or choose from one of Capital One’s designs.
- Text alerts for spending and 24/7 account access make it easy for you to manage your card.
- The annual fee is only $19 and it’s waived for the first year.
Capital One® Cash Rewards for Newcomers
Are you new to the US? If so, you probably already know how hard it can be to get approved for a credit card. Fortunately, Capital One has created this card for people who are new to the country and looking to establish their credit history. It comes with a number of benefits and will earn you cash back on spending.
- No annual fee.
- Earn 2% cash back on eligible travel purchases and 1% on everything else.
- Most credit cards charge a 2-3% foreign transaction fee when they’re used outside the US. However with this card, there are no foreign transaction fees.
Discover it® for Students
This card is for college students only. If that’s you, then keep reading! This has the same popular rewards program as the regular Discover it card, but that one requires excellent credit. With this version, the bar is set lower – it’s created for college students who have fair and limited credit history.
- Earn 5% cash back on spending categories that change each quarter. When you sign-up for them, you earn 5% on up to $1,500 in eligible category purchases.
- You get 1% cash back on all other purchases.
- 0% Intro APR on purchases for 6 months. Then the variable purchase APR applies, currently 12.99% - 18.99%. *Click apply for Terms & Conditions.
- No annual fee. No overlimit fee. No late fee on your first late payment.
Don’t know where you stand? Then try this tool!
Are you unsure whether you have good credit, fair credit, or bad credit? If so, then try out this tool which will help you find credit cards that best match your credit profile. In three easy steps, you can check if you pre-qualify for a card without affecting your credit score.
Opening a new card account and managing it responsibly is one of the best things you can do for your personal finances. Why? Because the difference between bad and good credit is like night and day. Once you build (or rebuild) a good credit history, new opportunities will await. This is because car loans, mortgages, and most reward cards are hard to get approved for with a mediocre or average credit rating. But once you break that barrier and achieve a great score, you will find those opportunities come more easily.
Reviewed and rated by Michael Dolen