What to Do If a Fair Credit Score Cuts Your Credit Card Options

If you have only average credit, appealing credit cards aren't as easy to come by. But you do have some choices.
Sara Rathner
By Sara Rathner 
Edited by Kenley Young

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When it comes to picking a credit card, once you attain fair credit (FICO scores of at least 630), it can be easy to feel stuck in the middle. You’ve established the credit history needed to graduate from secured credit cards, but you won’t yet qualify for some of the more rewarding cash-back and travel cards until you attain good to excellent credit (FICO scores of 690 and above).

There are credit cards for fair credit, but they may come with annual fees, higher-than-average interest rates and so-so rewards, if any. Why aren’t credit card companies more generous to those with fair credit? In a word: risk. The lower your credit scores, the more concerned banks are that you’re experiencing financial uncertainty and may struggle to afford your credit card bills.

Broader economic conditions play a role, too. According to Competiscan, a company that tracks and analyzes direct marketing activity, the COVID-19 pandemic caused some card issuers to become more conservative, pulling back on efforts to market credit-building cards to consumers, especially in the second quarter of 2020.

What are your options if you have fair credit?

Apply for a credit card for fair credit

A limited list of choices isn’t necessarily a bad thing, especially if you’re still relatively new to using credit cards. You may prefer to choose from a short list of cards issued by banks you’re already familiar with.

Just know that there will be some trade-offs. You may earn cash-back rewards, but pay an annual fee. Or you won’t pay an annual fee, but you’ll also earn no rewards.

Still, these cards serve a purpose, much like the secured cards you may have had when starting out on your credit journey. With careful use, they can continue helping you along the way so that you eventually qualify for a wider variety of credit cards.

Consider alternative cards from startup issuers

Startups and nontraditional issuers have been launching credit cards that can look at different financial factors when you apply, beyond your credit scores — such as your income and savings. Depending on which card you choose, you may not need to have a credit history or even a Social Security number — helpful if you have less-than-ideal credit or have recently immigrated to the U.S. and are establishing yourself here.

More than ever before, these types of starter cards offer cash-back rewards programs. Some incentivize credit-building behaviors, like making on-time bill payments, by increasing your rewards rate over time.

Join a credit union

Some credit unions offer compelling credit cards that may be available to those with fair credit. Of course, credit unions require you to become a member first, but don’t let that stop you from thinking of them as an option. Joining may be easier than you think.

Typically, to be eligible to join, you must live or work in a certain city or state, work for or be a member of a specific organization, or be in the military (or a family member of someone in the military). But sometimes you can also join by making a small donation to a charitable cause or opening a bank account with the credit union.

With so many credit unions, you may need to look around to find a card that fits. But it could be worth the investigation.

Trying to get approved for a card?
Create a NerdWallet account for insight on your credit score and personalized recommendations for the right card for you.

Become an authorized user on someone else’s card

If you’d prefer to keep building your credit scores for now, you can piggyback on someone else’s responsible credit card use by becoming an authorized user. Eventually, you could be more likely to qualify for a feature-rich credit card on your own.

However, becoming an authorized user is not without potential pitfalls:

  • The primary cardholder is responsible for paying the bills. Agree upon a budget for your spending upfront to avoid conflict.

  • While you benefit from good behavior, bad behavior can cost you. Pick a primary cardholder who uses credit cards carefully.

  • Rewards don't go to you. Your spending earns rewards, but the primary user benefits from them. Think of it as motivation to eventually get a fancy new card of your own someday.

Find the right credit card for you.

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