Best Credit Cards for Fair Credit

Your credit history can impact your financial future. If you've got a fair or average credit score, you may wonder what credit cards are available.

It's not the end of the world if your credit score is fair; with the right credit card, you can build your credit score to create a more positive credit history.

In this article, you'll learn all about credit scores, upgrading from a fair credit score to a good or excellent one, and we've picked the best credit cards for fair credit.

What Is a Credit Score?

A credit score is a three-digit number that lets lenders know your creditworthiness.

It tells lenders if you're a good person to loan credit to, as your credit score reflects your credit history. Several factors determine your credit score.

Your credit score is calculated with these factors in mind:

• Credit utilisation: Allows lenders to see how much you've used of your total available credit and how much you owe on different accounts. Credit utilisation determines future credit limits on future credit accounts.
• Payment history: If you've got a good or bad history with making payments, this will determine your credit score and eligibility for new credit cards.
• Length of credit history: This lets you see how long you've been building your credit report and lets lenders know if you have any long-term debts.
• Types of credit: If you've got multiple credit lines across mixed credit types, they’ll appear on your credit report.
• New credit inquiries: If you've applied for a credit line recently, the lender will conduct a soft search on your credit report, which will show up on your credit report each time.

How Your Credit Report Is Scored

Your credit score is labelled Poor or Fair, depending on the credit bureau you use.

The major credit bureaus in the UK are Equifax, Transunion, and Experian. Most credit bureaus offer online credit score access.

Equifax rates credit scores as follows:

• Excellent: 800 to 850
• Very good: 740 to 799
• Good: 670 to 739
• Fair: 580 to 669
• Poor: 300 to 579

TransUnion rates credit scores as follows:

• Excellent: 781 to 850
• Fair: 661 to 720
• Poor: 601 to 660
• Very poor: 300 to 600

Experian rates credit scores as follows:

• Excellent: 961 to 999
• Good: 881 to 960
• Fair: 721 to 889
• Poor: 561 to 720
• Very poor: 0 to 560

If you have a credit rating of 721, considered fair by Experian, it could be calculated as a good credit score with Equifax. Your three-digit number should be the same regardless of your chosen credit bureau.

Why You Should Consider Applying for a Credit Card for Fair Credit

So, your credit score falls under the fair credit category? A credit score between 661 and 899 is okay; it means you've made a good start aiming for an excellent credit score. You may be wondering why it matters, and we're here to tell you that your credit score can significantly impact your financial future.

By increasing your credit score, you can open the doors to many financial tools you might need, such as applying for a mortgage or a personal loan.

The higher your credit score, the less of a risk you appear to lenders.

There are several benefits to increasing your credit score, such as:

• Better interest rates: The higher your credit score, the more likely you'll be offered better interest rates for future credit lines.
• Higher credit lines: Once you've built up your credit file, you'll be eligible for higher credit lines.
• More credit access: Some personal loans and credit cards require you to have an excellent credit score, so by achieving this, you may find a way better deal on credit cards.

Now that you know the importance of upgrading from the fair credit category, consider applying for a credit card to propel this process. In the following section, you'll learn all about the different types of credit cards.

The Different Types of Credit Cards

If you're new to the world of credit cards, there are seven different types-each with their own purpose and use.

Some cards offer multiple features, or you can pick a card specialising in your desired quality. For example, if you’re looking for a card to spread the cost of purchases, you can apply for a card just for purchasing.  

The seven different types of credit cards are:

• Credit builder cards: Ideal for people with bad credit or fair credit; with one of these credit cards, you can work towards having good or excellent credit scores. Credit builders are ideal for people looking to build credit.
• Purchase cards: A card designed to spread the cost of big purchases. Usually, credit card issuers will offer a 0% interest rate for a set period, and some will continue this period if you make on-time payments.
• Balance transfer cards: If you've already got a credit card, you can use balance transfers to reduce the interest by transferring the balance from your new card to the old one. Some credit card issuers offer a 0% interest rate for a set period; if you pay off the debt during this period, you'll avoid paying interest.
• Purchase and balance transfer cards: You can get the best of both worlds with this card as it allows you to make both purchase and balance transfer transactions.
• Money transfer credit cards: Allows you to transfer credit over to your debit card and is used to pay overdrafts.
• Rewards cards: Allow you to earn rewards for spending. Some credit card issuers provide a rewards programme to maximise your spending, and rewards can vary between shop discounts and cashback.
• Travel credit cards: Designed to make spending while travelling easier. Usually, if you use your debit or credit card abroad, you can be charged foreign transaction fees, and these cards reduce the cost of using a card abroad.

Taking out any credit line is a serious commitment, so before you fill out any applications, you should know what you're getting yourself into.

Advantages

✔️ Build your credit report: A credit card can help you build your credit score, which can be helpful if you plan to get a mortgage later in life. You'll also see a credit limit increase as your credit score increases.

✔️ Spread the cost of purchases: A credit card is a good option if you need to make a big purchase before payday, and it allows you to spread the cost making it more affordable.

✔️ A safer alternative to cash: If you lose your purse or it's stolen, it can be challenging to retrieve the money. However, if your credit card is stolen and used, you can cancel the card, get a new one, and claim a refund from the card provider.

✔️ Spending abroad: You don't have to worry about cash while you travel. You can use your travel credit card, making it safe to purchase overseas with little to no foreign transaction fees.

Disadvantages

❌️ Credit file damage: If you miss any repayments, you may harm your credit score.

❌️ High-interest rates: Interest rates will vary across the different types of credit cards. It's essential to watch for interest rates after the interest-free period.

❌️ Long-term debt: If you don't repay your credit cards on time, you could fall into long-term debt. Avoid this by paying back more than the minimum on your credit card.

Unsecured Credit Card vs Secured Credit Card

On top of the seven different types of credit cards, you may cross unsecured or secured credit cards.

The seven types can fall under these two categories, but you must know the difference between the two.

• Secured credit card: You fund this credit card by depositing an amount determining the card's limit.
• Unsecured credit card: Your credit balance on this type of card is determined by your credit report.

Secured Credit Cards Explained

Secured cards aren't common. They don't require a credit check, as you'll have to deposit cash to get one as security. If you miss a payment, the lender can take the money from the initial deposit. Secured credit cards are good for credit building, but only if you can afford the initial deposit.

Unsecured Credit Cards Explained

Most credit cards fall under this category. You don't need to deposit money beforehand, as your credit balance will be based solely on your credit history. Credit cards are available for all credit score tiers, so it's the most used option to build credit.

How We Decided Which Are the Best Credit Cards for Fair Credit

Before we dive straight into the best six credit cards for fair credit, we wanted to share with you the factors that helped us form our decision.

Factors we considered:

• APR rates: Annual percentage rates can be high on credit cards (up to 36%). However, the national average credit card rate is 16.65%, so we looked for cards around this figure to ensure you get a good deal.
• Features: Some cards have benefits like zero-interest introductory periods and a rewards programme.
• Annual fees: Some cards require annual fees varying between £100 and £250. We ensure the best credit cards for fair credit have little to no annual fees.
• Credit limits: You may not be offered a vast credit limit with fair or average credit. However, card limits differ between card providers.
• Eligibility: You may only be eligible for some credit cards with fair or average credit, but we have found ones that accept applicants with a fair or average credit rating.

The 4 Best Credit Cards for Fair Credit Scores

Considering all the above factors, we've compiled a list of the 4 best credit cards for fair credit. Let's dive right in.

1. Capital One Platinum Credit Card

The Capital One Platinum credit card is a great way to increase your fair credit score.

With this credit card, you can build your credit and apply for a credit limit increase six months after opening the account if you've made all your repayments on time.

Capital One Platinum Credit Card

Max Credit Limit

£1,500

Representative % APR (variable)

28.9% APR

• For people with bad credit or building credit.
• £200 to £1,500 credit limit.
• No annual fee.

Check my eligibility See more details

Representative Example – If you spend £1,200 at a purchase interest rate of 28.94% p.a. (variable) your representative APR will be 28.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

2. Barclaycard Forward Card

Start working towards an excellent credit score with Barclaycard's Forward Card which comes with a personalised credit limit suited to your credit score. You can also use zero interest on purchases for the first three months of opening the account.

Barclaycard Forward Card

Credit Limit

Minimum £50

Representative % APR (variable)

33.9% APR

• 0% interest on purchases for 3 months (from the date you open your account).
• Credit limit £50 to £1,200.
• Minimum repayment £5.

Check my eligibility See more details

Representative Example – If you spend £1,200 at a purchase interest rate of 33.9% p.a. (variable) your representative APR will be 33.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

3. Tesco Bank Foundation Credit Card

With the Tesco Bank Foundation Credit Card, you can build your credit score and take advantage of Tesco's rewards programme. With this rewards card, you can earn extra Clubcard points for shopping using your Foundation Credit Card.

Tesco Foundation Credit Card

Credit Limit

Minimum £250

Representative % APR (variable)

29.9% APR

• Collect Clubcard points almost every time you shop.
• Credit limit £250 to £1,500.
• Access to Tesco Bank CreditView, provided by TransUnion, for 3 years from account opening.

Check my eligibility See more details

Representative Example – If you spend £1,200 at a purchase interest rate of 29.9% p.a. (variable) your representative APR will be 29.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

4. Aqua Classic Credit Card

The Aqua Classic credit card limit grows as your credit score increases. This card is ideal for anyone who needs better credit as it helps you build credit with a reasonable credit limit that prevents long-term debt.

Aqua Classic Credit Card

Credit Limit

Minimum £250

Representative % APR (variable)

34.9% APR

• Smart credit limits from £250 – £1,200.
• Build better credit with expert support in the Aqua app.
• Ability to build your credit score, if you manage your account well.

Check my eligibility See more details

Representative Example – If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Alternatives to Credit Cards

If you’ve gotten this far and are having second thoughts about applying for a credit card, maybe a credit card isn't the right financial tool for your needs. If that's the case, plenty of other options are still available.

Other options are available:

• Personal loans: If you're not explicitly looking to improve your credit score, but require quick access to cash, consider applying for a personal loan to help you out.
• Overdrafts: Try talking with your banking provider about opening an overdraft. An arranged overdraft can help you have access to cash as well as help you build your credit score.
• Short-term loans: If you require cash to tide you over until payday.
• Buy now, pay later: If you're looking to make online purchases consider Klarna or PayPal credit. You can spread the cost of your purchases, making them more affordable.

Final Thoughts on Cards for Fair Credit

All the credit cards we've recommended for fair credit will help you improve your overall credit rating.

On top of applying for a credit card, there is more you can do so you're one step closer to going from a fair credit score to a good or excellent credit score.

• Credit utilisation: Keeping your credit lines low will demonstrate your finances aren't stretched and that you’re a responsible borrower.
• Register on the electoral roll: When you're applying for a credit line, it makes it easier for lenders to see your proof of address.
• Close unused credit accounts: If you have open credit accounts you're not using, closing them will show lenders that you don't overstretch yourself when borrowing.
• Limit credit applications: Some applications require a soft or hard search on your credit file; this can leave marks and will work against you if you have multiple applications simultaneously. Only apply for credit lines one at a time.
• On-time payments: Paying back your credit card balance on time will help your credit file grow. If you miss any payments, you may risk reducing your credit rating to a bad credit score.

Now that you know all about credit cards for fair credit scores, you can start building a more positive credit file. The more you work on your credit history and increase your credit score,  the higher your future credit limits will be.

Related Guides:

• A Comprehensive List of Credit Card Companies UK
• How to Borrow Money with Bad Credit
• Best Credit Cards to Build Credit