Having a credit card can help people pay for things in times of limited cash flow or emergency. Millions of Americans use credit cards as their primary way of purchasing items. But if you have an average credit history due to certain incidences, you may find it hard to get a credit card. Most items stay on your credit history for up to seven years, it may not be worth waiting this long to get a credit card. Instead, you should look for lenders who offer credit cards to people with average credit. You may not be able to get rewards cards or other awesome deals, but you can still have a good chance of getting back on the credit ladder.
It’s important to be wary when navigating the credit card industry if you have poor credit, you don’t want to end up being duped into signing up for an inferior or costly credit card. This article will look at various factors that determine the best credit cards to apply for if you have average credit. It will also outline the advantages and disadvantages of obtaining a credit card with average credit.
What to Look For
If you’re looking for a credit card and you have average credit, you should consider the following factors before deciding on which card to use: needed credit score, reputation of lender, and interest rate.
- Needed Credit Score – If you have an average credit score the first thing you should consider when applying for a credit card is the credit score you need. You don’t want to apply for a card you can’t get and end up with a credit inquiry on your credit report for no reason – this can damage your score. Research online and find out the average range of accepted scores for the cards you want to apply for. There are various lenders that traditionally lend money to people who have scores between 600-670.
- Reputation of Lender – The reputation of the lender you opt for can have a positive or negative impact on your credit report, and will also ensure you don’t have any hidden costs or fees. There are predatory lenders that attempt to sign on desperate people with poor credit histories in hopes of getting them to pay outlandish fees and charges – beware!
- Interest Rate – Because you are a high-risk borrower, you may find many of the cards have high interest rates. Since you won’t be able to get any rewards, you should try and get a card with an interest rate that is as low as possible. Anything below 20% is considered a decent rate for those applying for cards with an average credit history.
Getting one credit card when you have average credit can help you rebuild your credit situation. You don’t want to be stuck with an average score, and using a credit card and paying it off regularly can help boost your score. In addition, it’s a great way to help bridge gaps in cash flow in case of emergencies or other instances. As long as you are responsible with your new card, it can be a great way to move your credit score forward and return normalcy to your life.
The disadvantages lie in various aspects of cards you can attain with average credit. As you are a high-risk borrower, you will not be able to attain cards with lots of rewards points. Therefore, using your credit card will not give you any real benefit aside from building credit. In addition, interest rates can be quite high, this is also because you’re a high-risk borrower. Also, many of the top lenders will not allow you to have a card with average credit, which means you will have to use lesser known lenders to get a card (this isn’t always the case). You also want to make sure you are capable of being responsible with the card, misusing it will result in even poorer credit being attributed to your name.
If you have average credit and you want a credit card, you should consider all the factors mentioned in this article prior to making a decision. You should always ensure to use your card responsibly and carry as little of a balance as possible – you don’t want to owe large amounts of interest!