It can be exciting to move into a new credit score range, especially if you have been working hard to improve. Individuals with fair credit still have quite a bit of work to do, but are able to start reaping some rewards of moving up at bit. One of the possibilities at this point is often easier approval of credit card applications. Credit companies offer different types of conditions to each credit tier. It is important to read the fine print on any application or offer. There are a few key features of credit cards that should be considered when you are applying with a fair credit score.
Interest Rates and Fees
Interest rates and fees are often the very cause of low credit scores in the first place. People get behind and the fees add up, resulting in poor reports to the credit bureaus. Many cards have outrageously high interest rates that put you at risk for higher monthly bills. Once you reach a fair credit rating, however, you should expect better treatment. These fees may still be high, but should show some decline when compared to previous offers. Diligence in paying off the card each month helps to avoid problems from high interest rates.
Annual fees are also something that many cards add on to cards that are offered to lower credit applicants. These fees are often added to the card immediately, and severely lower the spending limit until they are paid off. Some cards also charge an activation fee. There are laws in many places that are helping to limit these extra fees, however, they are still quite common. If you receive a pre-approval letter for a card with these fees, it may be best to look for another option. With a fair credit rating, you should soon be receiving offers of credit from quality companies, without extra fees.
Another great feature of many cards is the ability to apply for a credit increase every 6-12 months. Cards with this feature are excellent for those with fair credit. This allows you to increase your overall credit amount without applying for another credit card. Credit checks for cards put marks on your credit, often lowering your score. A fair credit score needs to stay stable and improve, not go down. A credit increase is usually dependent on regular monthly payments. This feature is, therefore, also a great motivational tool to help you stay on a payment schedule.
Secured credit cards are a common route taken by those building credit. While you may have been using one of these while working your way up to a fair score, it is time to move on. The best credit cards for fair credit should not have to be secured. If you already have a secured card, talk to the bank about changing your status. You may be able to stay with the same company with new regulations. New credit card offers are likely coming your way now that you have achieved a higher score. A new unsecured card is likely to be in the very near future.
Credit cards for fair credit start to look different than those for poor credit. While there are still likely to be limit restrictions and higher interest rates, the features should start to improve. Interest rates should decline, credit increases should become available, and unsecured options should be offered. Those with fair credit can begin to enjoy a few results of working hard to rebuild their credit score.