Best Credit Cards for Fair/Average Credit for April 2024

For most credit scoring models, a fair or average credit score isn't necessarily the middle of the road. Instead, it's usually where you'll find people working on building their credit. You may be building credit for the first time, or you may need to rebuild your credit after making a few mistakes.

With a fair credit score, you're still proving to lenders that you can handle credit responsibly, so you might have a harder time getting approved for certain credit products. Read on for more information on the best credit cards for fair credit.

While you may not qualify for the best credit card offers out there with fair credit, you do still have some quality options for making purchases and even earning rewards.

Capital One Platinum Credit Card

Great for: Building credit with no annual fee

The Capital One Platinum Credit Card (see rates and fees) is a basic starter card designed for people who need to build credit. It doesn't have many bells and whistles -- there's no purchase rewards, for instance -- but it also charges no annual fee and offers convenient online banking.

Read the full Capital One Platinum Credit Card review

Petal® 2 "Cash Back, No Fees" Visa® Credit Card

Great for: Unlimited cash back

The Petal® 2 "Cash Back, No Fees" Visa® Credit Card is a cash back rewards card that encourages responsible credit habits. You'll earn unlimited 1% cash back right away, with a boost to 1.5% cash back after making 12 on-time monthly payments.

Read the full Petal® 2 "Cash Back, No Fees" Visa® Credit Card review

Capital One Spark 1% Classic Card

Great for: Small business owners

• The Capital One Spark 1% Classic Card is one of the few business credit card options for small business owners with fair credit. It charges no annual fee, and it comes with unlimited 1% cash back on purchases.

Read the full Capital One Spark 1% Classic Card review

The exact range of what is considered to be a fair credit score will depend on the scoring model. Most lenders use the FICO® Score, and that has a range of 300 to 850. Within that model, average or fair credit scores range between 580 and 669. Anything lower than 580 is considered a bad credit score, and scores from 670 to 739 are considered good.

An average credit score is standard among folks who have just started building their credit, as it takes time to reach the higher score ranges. If you started working on your credit within the last year or so, you most likely have an average score.

You could also have an average credit score if you have a longer credit history, but you’ve made some mistakes along the way. For example, if you’ve missed payments every now and then, that could keep your score in the average range.

Comparing credit card offers when you have fair credit isn't quite as straightforward as it is for folks with good or excellent credit. That's because your credit card options are limited by your credit history.

So, the first step to comparing cards will be to find out which cards are most likely to approve applicants with similar credit scores. In general, this will mean student cards, starter cards, and secured credit cards.

Once you have a short list of cards you're likely to qualify for, you need to decide what features you want your card to have.

• Do you want to earn rewards on your purchases?
• Do you want to pay an annual fee?
• Do you want to make a deposit for a higher credit line?

Answering these questions should narrow down your options significantly, allowing you to make a choice on which card to take to the next step.

Having a fair or average credit score tells credit card issuers that you're still building your credit. This means that your choices won't be as lucrative as the credit cards for good credit, but you can definitely earn competitive purchase rewards and find options for no annual fee cards even with fair or average credit scores..

If you're not a student, then you may need to settle for a regular starter credit card, such as the Petal® 2 "Cash Back, No Fees" Visa® Credit Card or the Capital One Platinum Credit Card. You may also want to consider a secured credit card, as secured cards are ideal for building credit. They're easy to get so long as you can make the required deposit, and many secured cards also have purchase rewards and no or low annual fees.

Before you can work on building your credit, you need to work on really understanding your credit score. This means knowing what will help you increase your credit score -- and what will hinder your progress.

Each credit scoring model will weigh factors differently, but, in general, there are five main things that go into calculating your credit score:

1. Payment history: The main thing lenders want to know about a potential borrower is if they'll actually repay what they borrow, and your payment history is the key. Every missed debt payment will seriously hurt your credit score. This doesn't mean you were a few days late, however; you'll need to be more than 30 days past due before it'll be reported to the credit bureaus. If you find yourself missing payments frequently, consider setting up autopay, even if it's just to ensure you make at least your minimum payment on time each month. Use our credit card interest rate calculator to see how much interest will be added by making minimum payments.
2. Amount owed: Having a large amount of debt is rarely good, but your total debt isn't the only thing lenders look at. In particular, your credit score will consider how much debt you have versus how much credit you have available. This ratio is called your utilization ratio, or utilization rate. For example, if your credit card has a total credit limit of $500, and you're using $100 of it, your utilization ratio is 20%: $100 / $500 = 0.2 = 20%. A utilization rate above 30% will start raising red flags, and maxed-out credit cards will seriously hurt your score.
3. Credit history length: A long, positive credit history shows lenders that you can handle credit over the long term, not just for a little while. This is one reason it's important to start building credit early, so you have the benefit of time. It also helps if you can avoid closing your oldest credit card accounts (unless they have annual fees, that is). Most lenders like to see at least two years of positive credit history, but the longer, the better.
4. Credit mix: A long, positive credit history shows lenders you can handle credit responsibly, but a diverse credit mix shows you can handle multiple credit lines and different types of credit at the same time. Most people will develop a healthy credit mix naturally as they go through life, such as getting an auto loan when you need a new car or a mortgage loan when you purchase a home.
5. New accounts: Each new credit card or loan you take out represents more debt you could take on. So, opening too many new accounts in a short period of time makes lenders think you'll soon take on a bunch of new debt. What's more, even applying for a lot of new credit products in a short time can be concerning to lenders, and every new application usually comes with a hard credit check. Since these hard inquiries are noted on your credit report, lenders know if you've been applying for too many new products. It's best to space out applications for credit and new accounts by at least a few months, if not six months to a year. See our guide on whether applying for a credit card will hurt your credit score.

If you're not keen on the card offers for fair credit, you can always look into the options for credit cards for bad credit. Specifically, there are a lot of secured credit cards that have no annual fees and purchase rewards. Plus, your credit limit on a secured card will be determined by the size of your deposit, so a secured card could help you get a higher credit limit than an unsecured card for fair credit will offer.

And speaking of low credit limits, since most credit cards for fair credit will have low credit limits and high interest rates, they're not ideal for large purchases or carrying a balance. So if you need more financing than you can get with a credit card, you might consider personal loans for fair credit. Personal loans can be used for just about anything, and they can be a good option for building credit if you need a loan anyway.

If you don't need a personal loan but you would like to build credit without a credit card, you can also look into credit-builder loans. These loans are actually designed specifically for people who need to boost their credit scores and build credit history. Credit-builder loans usually have you make monthly payments into a secured account over the course of six months or more. Once you've made all the payments, you get the money back and you've built a positive payment history. Win-win.

Credit cards are one of the best tools for building credit, making them a good choice for most people with fair credit. As long as you can use your card responsibly -- by paying your bills on time every month and keeping your balances low -- then using your card should improve your credit score.

However, if you know you have trouble with missing payments or overspending when you have a credit card, it may not be the right choice for you. In this case, you may be better off using a small personal loan or credit-builder loan to improve your credit -- or even avoiding credit altogether while you work on creating better financial habits.

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

Our highest-rated credit cards have:

• A rewards rate above 2% (or 2x points or miles) with average spending, or competitive 0% intro APR balance transfer and purchase offers
• Attainable welcome bonuses that make up for any annual fees
• Low annual fees or a balance transfer fee of 3%
• Top perks such as purchase and travel protections, no foreign transaction fees, travel credits, and status upgrades

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.