Best Unsecured Credit Cards For Fair Credit December 2021
Summary of the best cards
Capital One QuicksilverOne Cash Rewards credit card
Why it’s one of the best unsecured credit cards: Consumers with average to good credit may qualify for this unsecured card which charges an annual fee of $ 39. You’ll earn 1.5% lump sum cash back which equates to some of the best rewards credit cards out there. See our full review.
Capital One Platinum Credit Card
Why it’s one of the best unsecured credit cards: The Capital One Platinum credit card is a solid entry-level, unsecured card for those with less than stellar credit. You won’t pay an annual fee, and after six months of responsible payments, you’ll automatically be considered for an increase in your credit limit. See our full review.
Discover it® Student chrome
Why this is one of the best unsecured credit cards: This card is designed for students who spend primarily on gas and meals. Cardholders earn 2% cash back at gas stations and restaurants, up to $ 1,000 in combined purchases each quarter. All other purchases are eligible for an unlimited 1% cash back. Discover will match any Cash Back Rewards you’ve earned after your first year. See our full review.
Discover it® Cash Back for Students
Why this is one of the best unsecured credit cards: People with fair credit or new to credit may be eligible for this card. Cardholders can earn 5% cash back on their daily purchases at various locations each quarter such as Amazon.com, grocery stores, restaurants, gas stations, and when you pay with PayPal, up to the quarterly maximum when you activate. The card offers unlimited 1% cash back on all other purchases. There are no annual fees or late fees the first time you pay late. At the end of your first year as a cardholder, Discover will match any Cash Back Rewards you’ve earned. The card also provides free access to your FICO credit score and does not charge any annual fees. See our full review.
Capital One’s Journey Student Rewards
Why it’s one of the best unsecured credit cards: For students with limited credit histories, Capital One’s Journey Student Rewards is designed as a crash course in credit cards. You will earn 1% cash back on purchases with this unsecured card and 1.25% cash back for each month that payments are made on time. Eno®, the Capital One® assistant, can help you manage your account and keep tabs on due dates. See our full review.
What is an unsecured credit card?
An unsecured credit card is simply a card that does not require a deposit or security to open an account. This is the most common type of credit card.
People with fair credit are somewhat risky for creditors. They are more likely to default than someone with a higher score, which is why applicants with fair credit are often denied new cards. Credit cards for people with fair credit are designed to provide a second chance while protecting the lender against the possibility of default.
What Are Unsecured Credit Cards For Fair Credit?
Unsecured credit cards for fair credit are not guaranteed by a cash deposit like secured cards. These are traditional credit cards that can be used to pay for purchases and are subject to interest and late fees.
With unsecured cards for fair credit, issuers offset their risk by charging high annual percentage rates, high penalties for late payments, and regular maintenance fees. With a higher cost of using the card, issuers earn more money up front in the event of a cardholder default. Like secured cards, unsecured cards for fair credit usually have low credit limits, although they are usually higher than the limits for secured cards.
Who can get an unsecured credit card for fair credit?
Fair credit unsecured credit cards are designed for people who have a hard time getting approved for regular cards. These credit cards have lower approval requirements, so you can be approved for one even with a fair credit score. They can offer a good opportunity to rebuild or build your credit, but they often come with downsides such as high interest rates and fees.
Unsecured credit cards for fair credit are useful for people who:
- Have a fair FICO score (669 and less)
- You want to establish a credit history
What is the difference between unsecured and secured credit cards?
A secured credit card, unlike more common unsecured cards, requires cardholders to put down a deposit – typically 50% to 100% of the credit limit – to secure the account in case the customer doesn’t. payments. If you miss a monthly payment on a secured card, the creditor can use the money from the deposit to pay the bill.
Most secured credit cards have very low starting credit limits. These types of accounts are for people with bad or no credit in order to establish their scores and possibly upgrade to unsecured cards. From a business perspective, this limits the level of risk that a credit card company assumes.
Do you have fair credit?
Your credit score is a digital representation of your creditworthiness. This is one of the factors that lenders use when making approval decisions.
Your credit score indicates how well you are paying off your debt and how much of a risk you are to lenders. There are several different credit scoring models, but the most common is the FICO score.
Your FICO score is calculated based on your credit report data collected by the three major credit bureaus: Equifax, Experian, and TransUnion. This dataset includes your unpaid debt, payment history, defaults, judgments, and bankruptcies.
- Exceptional (800+)
- Very good (740-799)
- Good (670-739)
- Fair (580-669)
- Poor (579 and under)
If you have a credit score in the fair FICO range, you have fair credit. People with fair credit have low creditworthiness and often struggle to get a new unsecured credit card.
How Can You Check Your Credit Score?
- Buy Direct From MyFico.com for $ 19.95 per month
- Paid credit monitoring services or websites offering free credit scores
- A nonprofit credit counselor (use a government approved advisor)
- Your monthly credit card statement, if offered as a benefit to the cardholder
What Are the Advantages and Disadvantages of Unsecured Fair Credit Credit Cards?
Benefits of unsecured cards for people with fair credit:
- No initial cash deposit
- Higher credit limits
Cons of unsecured cards for people with fair credit:
- High interest rates
- Potentially high annual fees
- Possible monthly maintenance costs
How can you choose an unsecured card for fair credit?
If you have fair credit and are looking for an unsecured credit card, look for these key features before you apply:
- Annual subscription
- Additional fees and charges
- Credit limit
- Possibility to increase the credit limit
- APR penalty
- Foreign transaction fees
- Reporting to the three credit bureaus
- Benefits for cardholders
Unsecured credit cards for fair credit typically have APRs 10 to 15 percentage points higher than traditional cards for people with good credit scores. Having a balance on a high interest rate card can incur significant interest charges, so you should find a card with the lowest rate possible.
Most fair credit credit cards charge an annual fee to maintain the account, either as a large sum or divided into monthly installments. Many also charge a variety of additional fees, including monthly maintenance fees, account verification fees, and credit limit increase fees.
All of these fees are billed directly to your balance, where they will earn interest as a purchase. Even if you never use the card for purchases, just owning it and incurring a fee will cost you money.
In addition, the credit limits on unsecured cards for fair credit are usually much lower than those on traditional cards. All of these fees can result in a high usage rate, which can have a negative effect on your credit score.
How To Apply For Unsecured Credit Cards For Fair Credit
- Examine your credit reports to make sure there are no errors.
- Find a card that meets your needs. Check out the list above for suggestions of good cards for you.
- Check the company’s website to see if the card offers pre-approval before you apply. This will give you a better idea of whether you are approved or not.
- Read the terms and conditions.
- Apply on the company’s website. Applying may lower your credit score slightly, as issuers usually do serious credit investigations at this point.
- Once you’ve received your card, start building good habits by using your card the right way.