Credit Cards for Fair Credit | An Expert Guide
Consumers with fair credit still have credit card options but these cards tend to come with an annual fee and a lower credit limit. Even still, they can be a good option if you have fair credit as it will allow you to establish payment history and work toward improving your credit over time. Below our experts highlight factors you should consider when evaluating these credit cards and are approaching the application process. Click on the images below to get specific advice from our experts.
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What To Look For When Applying
If you are applying for a credit card and you have fair credit, then you should look for a basic card with competitive rates and fees. For example, there are many cards with no annual fees, and there are some more simple cards that have reduced or eliminated late fees, foreign transaction fees and penalty interest rates. It can also be a good idea to apply for a card issued by a company that you already have a banking relationship with, so that payments and other account information can all be accessed from one site. Finally, look for a card that offers valuable benefits such as purchase protection, travel insurance and rental car collision damage waiver policies.
What To Avoid When Applying
If you have fair credit, then you should avoid applying for cards that require good or excellent credit, as a denied application will not help you. You should also be aware that some products can cost you more over time, and you need to determine whether the benefits are worth the cost. That includes cards with less favorable terms, such as those that carry a monthly fee or lack a grace period. Also consider whether reward cards that earn points, miles, or cash back serve your needs best, as these cards will have higher interest rates than other non-reward cards. Finally, if you're thinking of applying for a card with an annual fee, weigh the benefits of that card, as there are plenty of cards for fair credit that have no annual fee. In addition, those with fair credit may not need to consider secured cards, since they can typically qualify for a standard card.
Should You Apply For More Than One?
If you have fair credit, then it's ideal to focus on finding the best credit card for your needs and using it responsibly. Once cardholders have a record of on-time payments and little debt, then it might be time to consider getting a second card that offers better rates and terms, or additional features and benefits. However, those who will use an additional credit card to incur more debt (rather than keeping a low balance or paying it in full each month) are better off having just one card. Opening an additional account, and managing it responsibly, will contribute to your credit history and may gradually improve your credit score over time as long as you are paying all of your creditors on time and keeping your balances low relative to credit limits.
When Is The Best Time To Apply?
If you have fair credit, then your credit is considered flawed, but not to the point of being considered poor. Before applying for a new credit card, you should make sure that any new credit card application will serve to help, rather than hurt your credit. This means that you should wait until you have been responsibly managing your finances and paying your bills on time. Next, take the time to find the best credit card for your needs, rather than applying for the first offer you see. Finally, consider waiting until your debt levels are low enough and you have enough income to be approved for a standard credit card.
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