We start by identifying the cards with the lowest annual fees, preferably $0 per year, as it is best to keep costs low while building credit. We then identify the cards with the best rewards, using low APRs as a tiebreaker, because people working to build credit should strive to pay their credit card bill in full every month. Finally, the cards with the lowest two-year cost are selected.
WalletHub's Key Rating Components
Two-Year Cost: 35% – We estimate the total cost or overall value of carrying the card over a two-year period for consumers with fair credit. This includes annual fees and the value of any rewards earned.
Fees: 17% – We review all associated costs, including annual fees, monthly fees, and any additional charges that could impact affordability for someone working to build or rebuild credit.
Security Deposit and Credit Limit: 15% – We review whether a security deposit is required, the minimum amount needed to open the account, and how the deposit affects the available credit line. We also evaluate the issuer’s policies for reviewing accounts for credit limit increases and whether cardholders may become eligible for unsecured credit products after establishing a positive payment history.
Rewards: 13% – We assess the value and usability of the cards’ rewards programs, prioritizing simple cash back or flexible points that align with common expenses.
Editor’s Rating: 11% – Our editors evaluate each card based on accessibility for fair-credit applicants, long-term value, credit-building potential, and how it compares to other cards designed for this credit tier.
User Reviews: 6% – We incorporate cardholder feedback to reflect experiences with the application process, customer service, fee transparency, credit limit increases, and overall satisfaction while building credit.
Credit Reporting: 3% – Because many applicants with fair credit are working to strengthen their credit standing, we evaluate whether each card issuer reports account activity to the major credit bureaus. Reliable reporting helps ensure that on-time payments and responsible credit usage are reflected in a consumer’s credit profile over time.
Some cards featured here may use a slightly adjusted scoring approach, including options for students or for individuals who prefer store-branded cards.
How Two-Year Cost Is CalculatedTwo-year cost is used to approximate the monetary value of cards for better comparison and is calculated by combining annual and monthly membership fees over two years, adding any one-time fees or other fees (like balance transfer fees), adding any interest costs, and subtracting rewards. Negative amounts indicate savings. When fees or other terms are presented as a range, we use the midpoint for scoring purposes.
Rewards bonuses and credits have been taken into account for two-year cost calculations. However, bonuses applicable to only a very small portion of cardholders are not considered. For example, credits and bonuses awarded for spending or redeeming rewards through a company portal with non-co-branded cards have not been taken into account. Similarly, bonuses and credits related to spending with specific merchants using a non-co-branded card have not been taken into account (for example, if Card A offers credits with DoorDash, this feature would not be factored into calculations because it is hard to assess how many cardholders would use the benefit or exactly how much value they'd get from it).
Cardholder Spending Profiles
Given that different users have different goals and are likely to use their credit cards differently, we identified spending profiles that are representative of different users’ financial priorities and behaviors. For each cardholder type, we have assumed a specific amount of monthly spending by purchase type (e.g., groceries, gas, etc.), as well as an average balance, balance transfer amount, amount spent on large purchases and average monthly payment. Spending assumptions are based on Bureau of Labor Statistics data for consumers and PEX data for businesses.
Sources
WalletHub actively maintains a database of 1,500+ credit card offers, from which we select the best credit cards for different applicants as well as derive market-wide takeaways and trends. The underlying data is compiled from credit card company websites or provided directly by the credit card issuers. We also leverage data from the Bureau of Labor Statistics to develop cardholder profiles, used to estimate cards’ potential savings.
