bad Credit

Best Unsecured Credit Cards for Fair Credit of December 2021

The best summary of the cards

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 an annual fee of $39. You’ll earn a flat 1.5% cashback rate, which is equivalent to some of the best rewards credit cards. See our full review.

Capital One Platinum Credit Card

Why this is one of the best unsecured credit cards: The Capital One Platinum credit card is a solid unsecured entry-level card for those with less than excellent credit. You will not pay an annual fee, and after six months of responsible payments, a credit limit increase will automatically be considered. 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 mainly on gas and dining. Cardholders earn 2% cashback at gas stations and restaurants, on combined purchases of up to $1,000 each quarter. All other purchases earn unlimited 1% cashback. Discover will match all the refunds you’ve earned after your first year. See our full review.

Discover It® Student Cashback

Why this is one of the best unsecured credit cards: Individuals with fair credit or new to credit may be eligible to get this card. Cardholders can earn 5% cashback on everyday purchases at various places every quarter such as Amazon.com, groceries, restaurants, gas stations and when paying with PayPal, up to a quarterly cap upon activation. The card offers unlimited 1% cashback on all other purchases. There are no annual fees and no late fees the first time you pay late. At the end of your first year as a cardholder, Discover will match all the cash you’ve earned. The card also provides free access to your FICO credit score and does not charge an annual fee. See our full review.

Capital One Student Trip Rewards

Why this is one of the best unsecured credit cards: For students with a limited credit history, Capital One’s Journey Student Rewards program is designed like an intensive credit card course. You’ll earn 1% cashback on purchases with this unsecured card and 1.25% back for every month paid on time. Eno®, the Capital One® assistant, can help you manage your account and keep track of 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 guarantee to open an account. This is the most common type of credit card.

Persons with fair credit are somewhat of a risk to creditors. They have a higher chance of default than anyone with a higher score, which is why applicants with fair credit are often denied access to new cards. Credit cards for people with fair credit are designed to provide a second chance while also protecting the lender from the possibility of default.

What are unsecured credit cards for fair credit?

Unsecured fair credit credit cards are not backed by a cash deposit like secured cards. They 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, heavy penalties for late payments and periodic maintenance fees. With the higher cost of using the card, the issuers earn more money up front should the card holder default on the payment. Like secured cards, unsecured cards for fair credit usually have lower credit limits – although they are usually higher than the limits imposed on secured cards.

Who can get an unsecured credit card for fair credit?

Unsecured credit cards are designed for fair credit for people who have trouble getting approved for regular cards. These credit cards have lower approval requirements, so even one credit card with a fair credit score may be approved. They can offer a good opportunity to rebuild or create your credit, but they often have drawbacks 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 below)
  • Want to create 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 make a deposit—typically 50% to 100% of the credit limit—to secure the account in the event a customer fails to pay. If you miss a monthly payment on a secured card, the creditor may use the money from the deposit to pay the bill.

Most secured credit cards have very low credit limits. These types of accounts are intended for people with bad or no credit as a way to build up their score and eventually move to unsecured cards. From a business perspective, it limits the amount of risk a credit card company can take.

Do you have fair credit?

Your credit score is a numerical representation of your creditworthiness. It is one of the factors that lenders use when making approval decisions.

Your credit score indicates how well you can pay off your debts and how much risk you pose to lenders. There are many different credit scoring models in use, but the most common is the FICO score.

Your FICO score is calculated based on data on your credit report collected by the three major credit bureaus: Equifax, Experian, and TransUnion. This data set includes your debts, payment history, defaults, judgments, and bankruptcies.

  • Exceptional (800+)
  • Very good (740-799)
  • Good (670-739)
  • just (580-669)
  • Weak (579 and below)

If you have a credit score in the FICO fair range, you have fair credit. People with fair credit have little creditworthiness and often find it difficult to get a new, unsecured credit card.

How do you check your credit score?

  • Buy directly from MyFico.com For $19.95/month
  • Paid credit monitoring services or websites that offer free credit scores
  • nonprofit credit advisor (use a Certified government advisor)
  • Your monthly credit card statement, if offered as a cardholder benefit

What are the advantages and disadvantages of unsecured fair credit cards?

Advantages 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 fee

How do 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:

  • April
  • Annual fee
  • Additional Fees and Charges
  • credit limit
  • Ability to increase credit limit
  • April penalty
  • Foreign Transaction Fee
  • Reporting to the three credit bureaus
  • Rewards
  • Cardholder Benefits
  • Pre-qualification

Unsecured credit cards for fair credit typically have an APR that is 10 to 15 percentage points higher than traditional cards for people with good credit scores. Maintaining a balance on a high-interest card can incur significant interest charges, so you should find a card at the lowest rate possible.

Most fair credit credit cards charge an annual fee to maintain the account, either a large amount or divided into monthly installments. Many charge a variety of additional fees as well, including monthly maintenance fees, account verification fees, and credit limit increase fees.

All of these fees 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 fees will cost you cash.

In addition, the credit limits on unsecured cards for fair credit are usually much lower than on traditional cards. All of these fees can result in a high utilization ratio, which can have a negative impact on your credit score.

How to Apply for Unsecured Credit Cards for Fair Credit

  1. Review your credit reports to make sure there are no errors.
  2. Find a card that meets your needs. Check out the list above for suggestions on good cards for you.
  3. 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.
  4. Read the terms and conditions.
  5. Apply on the company’s website. The application may lower your credit score slightly as issuers usually make difficult credit inquiries at this point.
  6. Once you receive your card, start forming good habits by using your card the right way.

.

About the author

Publishing Team

Leave a Comment