Best Unsecured Credit Cards for Fair Credit October 2022 | Credit card
Our team of experts uses a methodology to identify the credit cards most likely to meet your needs. We look at annual percentage rates, annual fees, issuer satisfaction ratings and other factors to determine which cards are winners. Learn more”
Summary of the best cards
Discover it® Student Cash Back
Why this is one of the best unsecured credit cards: People with fair credit or new to credit may qualify for this card. Cardholders can earn 5% cash back on everyday purchases at different places each quarter like 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, and Discover will match any Cash Back you have earned at the end of your first year. The card also offers free access to your FICO credit score and charges no annual fee. See our full review.
Discover it® Chrome Student
Why it’s one of the best unsecured credit cards: This card is designed for college students who spend mostly on gas and meals. Cardholders earn 2% cash back at gas stations and restaurants, on up to $1,000 in combined purchases each quarter. All other purchases earn 1% unlimited cash back. Discover will match any Cash Back you have earned at the end of your first year. See our full review.
Capital One QuicksilverOne Cash Rewards Credit Card
Why this is one of the best unsecured credit cards: Consumers with fair to good credit may qualify for this unsecured card that charges a $39 annual subscription. You’ll earn a flat rate of 1.5% cash back, which is comparable to some of the best rewards credit cards. 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. He has a $0 annual fee, and after six months of responsible payments, you will automatically be considered for a credit limit increase. See our full review.
Capital One 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 are designed as a crash course in credit cards. Earn 1% cash back on all your purchases. Pay on time to increase your cash back to a total of 1.25% for that month. Eno®, Capital One®’s assistant, can help you manage your account and keep an eye on maturities. 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 to 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 backed 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 make more money upfront in the event of a cardholder default. Like secured cards, unsecured cards for fair credit generally have low credit limits – although they are usually higher than secured card limits.
Who can get an unsecured credit card for fair credit?
Unsecured credit cards for fair credit are designed for people who have trouble getting approved for regular cards. These credit cards have lower approval requirements, so you can be approved even with a fair credit score. They can offer a good opportunity to rebuild or establish your credit, but they often come with downsides like high interest rates and fees.
Unsecured credit cards for fair credit are useful for people who:
- Have a fair FICO score (669 and below)
- 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 deposit a deposit – usually 50% to 100% of the credit limit – to secure the account in case the customer fails to make 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 low or no credit to build their scores and possibly switch to unsecured cards. From a business perspective, this limits the risk a credit card company takes on.
Do you have fair credit?
Your credit score is a numerical representation of your creditworthiness. This is one of the factors lenders use when making approval decisions.
Your credit score indicates how well you are repaying your debts and how much risk you pose to lenders. There are several different credit scoring models, but the most common is the FICO score.
Your FICO score is calculated based on data from your credit report collected by the three major credit bureaus: Equifax, Experian and TransUnion. This dataset includes your outstanding debt, payment history, defaults, judgments, and bankruptcies.
- Outstanding (800+)
- Very good (740-799)
- Good (670-739)
- Just (580-669)
- Poor (579 and below)
If you have a credit score in the fair FICO range, you have fair credit. People with fair credit have poor credit and often have trouble getting 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 non-profit credit counselor (use a government-licensed counselor)
- Your monthly credit card statement, if offered as a cardholder benefit
What are the pros and cons of Fair Credit unsecured credit cards?
Benefits of unsecured cards for people with fair credit:
- No initial cash deposit
- Higher credit limits
Disadvantages 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 applying:
- 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
- Cardholder Benefits
Unsecured credit cards for fair credit typically have APRs that are 10 to 15 percentage points higher than traditional cards for people with good credit scores. Maintaining a balance on a high interest rate card can result in significant interest charges, so you should find a card with the lowest possible rate.
Most credit cards for fair credit charge an annual fee to maintain the account, either in one large sum or in several 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 charges are charged directly to your balance, where they will accrue interest, just like a purchase. Even if you never use the card for purchases, just owning it and incurring charges will cost you money.
Additionally, credit limits on unsecured cards for fair credit are usually much lower than those on traditional cards. All of these charges can lead to a high utilization rate, which can negatively affect your credit score.
How to Apply for Unsecured Credit Cards for Fair Credit
- Check your credit reports to make sure there are no errors.
- Find a card that meets your needs. Check the list above for suggestions on the right cards for you.
- Check the company’s website to see if the card offers pre-approval before applying. This will give you a better idea of whether or not you will be approved.
- Read the terms and conditions.
- Apply on the company’s website. Applying may lower your credit score slightly, as issuers usually make serious credit inquiries at this point.
- Once you receive your card, start building good habits by using your card the right way.