According to Experian, which is one of the three credit reporting bureaus, average or fair credit is typically defined as a credit score in the middle to upper 600s: By FICO’s standards, that would be 580 to 669; by Vantage’s standards, it’s 550 to 649. Consumers with average credit who are looking for low interest credit cards don’t have a lot of options. Credit cards with low interest rates are generally offered to those with good or excellent credit. However, credit card rates for consumers with fair credit are typically 24.99%.
Therefore, you’ll have to weigh other factors to determine the best card for average credit. For example, a card with no annual fee would be considered a good option. If there is an annual fee, you want it to be as low as possible. Below are some of the options to choose from.
Capital One Platinum
Capital One Platinum is one of the best credit cards for consumers with average credit. There is no annual fee and no balance transfer fee. The Capital One Platinum card also has a smart chip. After making the first 5 monthly payments on time, consumers can get a higher credit line. However, there are no rewards associated with this card, and the interest rate is 24.99%.
Credit One Bank Unsecured Platinum Visa
The Credit One Bank Unsecured Platinum Visa is issued by Credit One Bank, which is headquartered in Las Vegas, NV, has a regular APR of 14.24% to 25.24%. The annual fee could range from $0 to $99. Consumers can receive 1% cash back on eligible purchases. After demonstrating responsible use, consumers can obtain a credit line increase, but there’s a fee for the increase.
Capital One QuickSilver One Cash Rewards Credit Card
While the Capital One Platinum has no annual fee and no rewards, the Capital One QuickSilver One Cash Rewards card has both: it offers rewards, but it also has a $39 fee. The other features are similar to the Capital One Platinum card: it has a smart chip, after making the first 5 monthly payments on time, consumers can get a higher credit line.
The Milestone MasterCard is issued by Mid America Bank & Trust Company, in Dixon, MO. It has a 23.90% interest rate. Consumers can expect to pay an annual fee that ranges from $39 to $99, depending on credit level. One feature of the card is the absence of cash advance fees for one year.
Indigo Platinum MasterCard
The Indigo Platinum MasterCard, which is issued by Celtic Bank in Salt Lake City, UT, stands out for its offers protection from fraud coverage in the event that the card is lost or stolen. The card has a 23.90% annual interest rate. The annual fee ranges from $0 to $99. There is no balance transfer option with the Indigo Platinum MasterCard.
It should be noted that no card with an interest rate in the 20s is considered “good.” Also, while 15% is better than 24%, the goal is to get into the credit range that will allow you to obtain a credit with a single-digit interest rate. Some credit card offers for consumers with good-to-excellent credit still have double-digit interest rates. However, they typically don’t have annual fees but they do offer great rewards programs. In addition, cards in this category usually have 0% introductory balance transfer rates.
Secured credit cards are another option. They require a security deposit, which usually starts at $200, but can be higher. After establishing a history of consistent payments, you may have a credit amount that is half of your deposit. Since your deposit is used as collateral, there is less risk, so the interest rates are sometimes lower.
Improving Your Credit Score
To apply for credit cards with lower interest rates, consumers need to get into the good or excellent credit range.
The FICO Score range for a good credit score is 670-739. A very good rating would include a score between 740-799. An exceptional credit score would be 800-850. Vantage considers 700-749 to be a good score. An excellent credit score is 750 to 850. Vantage does not have a “very good” category.
So, how is your credit score determined? There are 5 factors:
Payment history is 35% of your score – and weighs more heavily than any other factor, so paying your bills on time is important.
Amounts owed is the second most important factor. It accounts for 30% of your total score. This is why you need to ensure that you are not close to your spending limits.
Length of credit history is 15% of your score. All of your accounts are evaluated to determine the average age – or how long the accounts have been open. Older credit is viewed more favorable than newer credit. That’s because paying on an account for a long time demonstrates that you’re a responsible consumer. With newer accounts, you haven’t established a track record of timely payments yet.
Credit mix is 10% of your score. Credit mix includes the different types of credit that you have: mortgage, student loan, credit card, etc.
New credit is also 10% of your score. New credit refers to credit that you have applied for. Whenever you apply for new credit, your score temporarily takes a drop.
Understanding how your credit score is calculated can help you make decisions that can lead to a better score, which leads to more lucrative credit card offers.