Credit Cards for Average and Fair Credit

In our “everyone is special” culture, the words average and fair have taken a decidedly negative tone. Actually, by definition they are not negative – they are normal, right in the middle, as to be expected, what you would anticipate in a given situation. Luckily, there are a few cards designed for this average category that are anything but – cards that really could go head-to-head against premium offerings.

Before we jump in, a word about FICO scores: average is around 620-680 but to get yourself one of these top cards you will need to fit in closer to the top end of that range, let’s say 650-680.

Average and Fair Credit Score Credit Cards

Best Overall Credit Card: AMEX Gold Rewards
Best Cashback: Rogers
Best Welcome Bonus: Marriott
Best Balance Transfers: MBNA Platinum

The AMEX is unique in the category in that it offers a dynamite welcome bonus, excellent insurance coverage, and a very good point earn rate. How does it do that? It charges a higher processing fee to merchants – which is why it is not almost universally accepted like Visa and Mastercard – and it requires $1,500 in spend- worth approximately $45 in fees to AMEX – within three months to cash in on the $250 point welcome bonus.

The travel medical insurance alone, which is difficult to find in non-premium cards, is an excellent reason to opt for the AMEX. Add the welcome bonus, the 1-2% point rewards and the first year fee waiver and this is king of the castle. Only a $15,000 annual income requirement.

You want cashback? That is exactly what Rogers gives. You get 1.75% back on all purchases which can be redeemed in full against your statement, one of the best offerings of any cashback card in the marketplace. And Rogers is the indisputable heavyweight champion of Canada when it comes to foreign exchange rates – they cover the 2.5% Mastercard charge AND add an additional 1.5% on top. That’s right, 4% back on all foreign currency purchases.

And they do this without an annual fee (provided you stick one Rogers or FIDO product as a recurring payment on the card). So how do they make any money? Basically, they offer no insurance so fixed costs are low, and the sign up bonus is a small but considerate $25. No stated income requirement.

Marriott offers a crazy sign up bonus of 30,000 points, good for up to four nights at one of their many hotels (“their many hotels” meaning all owned properties, not simply the marriott brand), and this is available after using the card only once. How do they afford it? First, the marginal cost of giving away a hotel room that would otherwise be empty is probably pretty low for Marriott (though this ignores the fact that the points may be converted into 10,000 Aeroplan points, a value of approximately $125). Second, customers get no insurance benefits with the card, and the basic point earn rate is relatively low, though some spending categories – particularly Marriott spending – gets back massive value.

And did we mention they waive foreign currency exchange fees as well?
No stated income requirement.

The MBNA Platinum Plus card is not just the best balance transfer card in the average credit score category – it is the best balance transfer card in Canada by a country mile. 0% APR for 12 months, both for balance transfers or cash advances up to your credit limit. If you are in need of such a service just stop reading and apply now, there is no real need for discussion on this one.
No stated income requirement.

What Sort of Cards Target an Average Credit Score?

Credit cards in this category (aside from the AMEX) must provide lower value on one or a few of: the point earn rate, the welcome bonus, or packaged benefits like insurance. This is necessary because:

  1. There will be no/a lower income requirements to qualify;
  2. Higher income requirements are a necessary requirement to charge higher processing fees to merchants;
  3. Higher processing fees means greater per-transaction profit for banks, meaning quicker fixed cost paybacks AND the ability to return more to the customer from the margin.

Additionally, average credit scores on average have less credit history, which means extending a credit line is inherently more risky. To make a return on investment, banks need to extend a decent amount of credit – but there is less certainty as to the ability of a customer to handle balance payments.

More Credit Score Articles

credit cards for fair credit score

Credit Cards for Average and Fair Credit

In our “everyone is special” culture, the words average and fair have taken a decidedly negative tone. Actually, by definition they are not negative – they are normal, right in...

best credit cards for good credit score

Credit Cards for Good Credit

While FICO differentiates between good and excellent credit, we avoid such hair splitting; if you are able to get a premium credit card we will go ahead and say you...

Leave a Comment

Scroll up