Credit Reports and Credit Scores

• Credit reports are translated into your credit score by the Fair Issac Company, which will give it a number between 375 and 900. An excellent credit score is above 680, and while there is no absolute definition, a score between 640 and 680 is considered fair or average. With a score in the fair range, it can be harder to get the best rates on credit cards and loans, although there are still many options out there. A credit card for fair credit can be a useful tool to help improve your credit. By keeping spending below your account limit and making on-time payments, you build and improve your credit history. After a period of making these positive steps, you may have more opportunities for cards with better rates or rewards.
  
  

Secured Credit Cards

• If your credit score is at the lower end of the fair range, a secured credit card may be your only option. Secured credit cards require you to put down a cash deposit as collateral for the account. The amount you put in becomes your credit line, and some banks will increase that credit line as you make on-time payments. According to Bankrate, nearly all secured credit cards charge annual fees, but there is a large variety in the amount, so it pays to shop around. Also avoid cards that charge application fees or mandatory insurance fees. Bankrate lists one card with those qualities, the Public Savings Bank Open Sky Secured Visa. This card charges a $50 annual fee, as of April 2011, and an interest rate of 6.5 percent, which is lower than similar cards.
  
  

Standard Credit Cards

• If you have had a secured card already and your credit score is improving, you might qualify for a standard credit card, with no collateral required. These may offer a lower annual fee and other benefits such as a higher line of credit, but will likely charge a higher interest rate than a secured card. This is because it is riskier for the bank to offer you credit with no collateral. Bankrate notes that Capital One offers two cards that fall into this category. The Standard Platinum card waives the annual fee for the first year, and it is $19 each year thereafter. It offers an interest rate of 24.9 percent, as of April 2011. The Capital One Classic Platinum has a higher annual fee at $39, but offers an introductory interest rate of 0 percent on purchases, which goes up to 17 percent once the promotional period ends.
  
  

Rewards Credit Cards

• Most rewards cards require scores above 680, but there are a few options for those building credit. Capital One offers rewards cards for students and those new to the United States, who may not have enough of a credit history to have a high score. The Capital One Journey Student Rewards Visa offers 1 percent cash back on all purchases, and offers a bonus rebate when bills are paid on time. There is no annual fee, and the variable interest rate starts at 19.8 percent, as of April 2011. The Cash Rewards for Newcomers Visa offers 2 percent back on travel purchases and 1 percent back on other purchases. There is no annual fee and the variable interest rate starts at 24.9 percent. Capital One also offers its No Hassle Cash Rewards card for those with average credit, which offers 2 percent cash back on gas and groceries and 1 percent cash back on all other purchases. This card charges an annual fee of $39, and charges a variable interest rate starting at 17.9 percent.