When you’re trying to recover from a less-than-perfect credit history — or build your credit history from the ground up — it can be tough to find real credit card offers.
Some cards designed for consumers with fair, bad credit or no credit are so full of program fees that they risk making your debt problems even worse. Others charge excessive interest rates, big late fees or offer barely any benefits to cardholders.
Don’t give up. There are still good credit cards out there – including those for people with low or mediocre credit scores. Some cards for consumers with less-than-perfect credit even offer modest rewards or other important benefits, such as an automatic credit limit increase after you prove that handle the card responsibly i.e. on-time monthly payments.
If you’ve got a credit type classified as poor or bad – meaning a credit score below 580 – you might find that a secured card is your best option. In exchange for securing your card with a refundable deposit, you could get a relatively affordable card with a modest credit line.
If you have better credit or fair credit – meaning your credit score hovers around 580 to 669 – you have even more options for a new credit card from credit card issuers. You might even be able to get an unsecured card with perks that are nearly as good as those offered by cards for people with good or excellent credit.
Here are four of the best credit card options for consumers with fair or poor credit.
Best for: Those who want to earn some rewards while building or rebuilding their credit.
Features for people with fair or bad credit:
APR: 24.74% variable
Annual fee: None
Other fees: No late payment fees the first time you pay late. After that, up to $39; up to $39 returned payment fee; 3% balance transfer fee, up to 5% fee on future balance transfers (see terms)*; Cash advance fee of either $10 or 5% of the amount of each cash advance, whichever is greater; 26.74% variable cash advance APR; no penalty APR.
Bonus: Discover matches all of the cash back you’ve earned in your first year. For example, if you earn $100 in cash back in the first year, Discover will give you another $100.
Best for: Borrowers who are seeking an unsecured credit card with no annual fee.
Annual fee: None
Other fees: Up to $38 late payment fee; no balance transfer fee; 3% (or $10) cash advance fee; no foreign transaction fee; 26.99% cash advance APR; no penalty APR.
Best for: Borrowers who are building their credit from scratch.
Annual fee: $0
Other fees: Up to $25 late payment fee; up to $37 returned payment fee; no penalty APR; no foreign transaction fee. Balance transfers and cash advances are not allowed on this card.
Best for: Cardholders with not-so-great credit who want to earn a significant amount of cash back.
Annual fee: $39
Other fees: Up to $38 late payment fee; 3% (or $10) cash advance fee; no balance transfer fee; 26.99% cash advance APR; no penalty APR; no foreign transaction fee.
If you have the discipline to pay off your purchases in full, the Discover it Secured card and the QuicksilverOne card might be the best bet for you. With their easy application process, you simply need to use the card for everyday purchases and pay your bills on time in order to build or rebuild your credit. In exchange, you might earn enough cash back to treat yourself to a nice dinner.
The APRs on all of these cards are high, though, so you’ll want to avoid carrying a balance from month to moth. The best way to rebuild your credit with a card like these is to use it like a debit card and charge only those purchases that you can pay off quickly.
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