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11 Unsecured Credit Cards for Fair Credit (2020)

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Most consumers prefer unsecured credit cards for fair credit because they don’t require a large upfront deposit to secure the line of credit.

If you have a fair credit score — a FICO score between 580 and 669 — you shouldn’t have to accept terms associated with bad credit when shopping for a credit card. That means skipping the secured credit card listings that call for large deposits and heading straight for the unsecured card offers.

We’ve compiled a list of the best unsecured credit cards for fair credit that can not only help you build credit, but they can also help you obtain a higher credit limit and lower annual fee.

Best Overall | Other Recommendations | How to Build Credit | FAQs

The Capital One® Platinum Credit Card has everything that someone with average credit could want in a card. And while your initial credit limit may be lower than you’d like, you can earn quick credit limit increases with consecutive on-time payments.

  • Pay no annual fee
  • Be automatically considered for a higher credit line in as little as 6 months
  • Fraud coverage if your card is lost or stolen
  • Use online banking to access your account, even from your smartphone, with our mobile app
  • Check out quickly and securely with a contactless card, without touching a terminal or handing your card to a cashier. Just hover your card over a contactless reader, wait for the confirmation, and you’re all set.
  • Pay by check, online or at a local branch, all with no fee – and pick the monthly due date that works best for you

N/A

N/A

26.99% (Variable)

$0

Average, Fair, Limited

Capital One actively monitors your account and will automatically increase your credit limit after you make your first six monthly payments on time. This card also features a competitive interest rate, no penalty APR for late payments, fraud protection, and unlimited access to the issuer’s CreditWise program that monitors your credit report.

And, since Capital One reports your payment history to every major credit bureau, you may quickly earn an improved credit score by using your card responsibly.

While the Capital One® Platinum Credit Card tops our list, it’s by no means the only option you should consider. The cards below offer unsecured credit with no need for large security deposits or overwhelming fees.

FAIR CREDIT RATING

★★★★★

4.8

  • Earn unlimited 1.5% cash back on every purchase, every day
  • Earn cash rewards without signing up for rotating categories
  • Be automatically considered for a higher credit line in as little as 6 months
  • Monitor your credit profile with the CreditWise® app, free for everyone
  • $0 fraud liability if your card is ever lost or stolen
  • No limit to how much cash back you can earn, and cash back doesn’t expire for the life of the account

N/A

N/A

26.99% (Variable)

$39

Average, Fair, Limited

The Capital One® QuicksilverOne® Cash Rewards Credit Card quickly makes up for the annual cost of the card with its cash rewards.

By charging $500 each month to your card — which you can likely do simply by paying some of your monthly bills through your account — you can earn a profit each year with the card. Just be sure to pay off every charge you make right away. Otherwise, the interest charges will negate the earnings potential.

FAIR CREDIT RATING

★★★★★

4.7

  • All credit types welcome to apply!
  • Free access to your Vantage 3.0 score From TransUnion* (When you sign up for e-statements)
  • Monthly reporting to the three major credit bureaus
  • See if you’re Pre-Qualified without impacting your credit score
  • Fast and easy application process; results in seconds
  • Free online account access 24/7

See website for Details

N/A

25.90% – 29.99%

See website for Details

Bad, Poor Credit

The Surge Mastercard® has one of the highest initial credit limit offerings for someone with average credit. But don’t expect that higher limit to come cheap.

The Surge Mastercard® has rather high annual fees that get higher after the first year. A higher-than-average interest rate doesn’t make the charges any lighter on your bank account. But if you need a higher limit, and don’t mind paying for the privilege, this card may cover you nicely.

FAIR CREDIT RATING

★★★★★

4.7

  • Enjoy peace of mind with $0 Fraud Liability
  • Qualified applicants will receive a card with a competitive APR and no annual fee along with 1% cash back rewards on all purchases, terms apply
  • View updates to your Experian credit score with free online access, terms apply
  • Make paying your bill easier with the ability to choose your payment due date, terms apply
  • Access your account on-the-go with the Credit One Bank mobile app
  • Never miss an account update with customizable text and email alerts

N/A

N/A

17.99% to 23.99% Variable

$0 – $99

Fair

Just how valuable the Credit One Bank® Platinum Visa® is to you will depend upon how fair your credit is. That’s because this card bases its annual fee and interest rate on your creditworthiness. The better your credit, the lower your fees.

If you’re on the higher end of fair credit (a FICO score closer to 650 than 600), you could pay no annual fee and have a competitive interest rate to match. Just keep in mind that Credit One Bank starts off all cardholders with a fairly low initial credit limit. You aren’t guaranteed a credit limit increase with on-time payments, either.

FAIR CREDIT RATING

★★★★★

4.5

  • Qualified applicants will receive exclusive benefits such as 1% cash back rewards on all purchases, no annual fee, and a competitive APR. Terms apply.
  • Manage your account quickly and easily from your mobile device by using the Credit One Bank mobile app.
  • Use your Apple device to make purchases securely through Apple Pay®. Apple Pay is a registered trademark of Apple, Inc.
  • Your account is safeguarded against unauthorized charges with Zero Fraud Liability at no additional charge.
  • Take advantage of free online access to your Experian credit score and credit report summary so you can track the key factors impacting your credit health. Terms apply.

N/A

N/A

17.99% to 23.99% Variable

$0 – $99

Fair

The Credit One Bank® Visa® Credit Card with Cash Back Rewards charges a slightly higher interest rate than the market average, but don’t let that scare you away from this card.

Cardholders can earn cash back on some purchases. If you pay your bill in full each month, you can avoid the heavy interest charges and make a little money on the side with the cash back.

FAIR CREDIT RATING

★★★★★

4.5

  • Prequalify for a card today and it will not impact your credit score
  • Less than perfect credit is okay
  • Mobile account access at any time
  • Protection from fraud if your card is stolen
  • Account history is reported to the three major credit bureaus in the U.S.

  • *Dependent on credit worthiness

N/A

N/A

24.9%

$35 – $99

Bad, Poor Credit

Milestone makes it easy to find the best credit card to match your credit history. The Milestone® Mastercard® – Less Than Perfect Credit Considered is one of several cards in the issuer’s portfolio. You can find which card you’re most likely qualified for by prequalifying before you officially apply.

This allows you to research your options before adding a hard inquiry to your credit report. Plus, you’ll have the peace of mind that you likely won’t face the dreaded rejection screen.

FAIR CREDIT RATING

★★★★★

4.5

  • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
  • Enjoy no annual fee and no foreign transaction fees
  • You can help build your credit with responsible use of a card like this
  • Get Eno®, your Capital One® assistant, to manage your account via text, receive alerts, and shop safer online
  • Pick the monthly due date that works best for you
  • Be automatically considered for a higher credit line in as little as 6 months

N/A

N/A

26.99% (Variable)

$0

Average, Fair, Limited

A student credit card helps young adults build a credit history before heading into the real world, and the Journey® Student Rewards from Capital One® is one of the best options on the market.

Whether you have fair credit or limited credit, this card offers the ability to earn cash back rewards that increase when you pay your bill by the due date. It also has no foreign transaction fee, which makes this card a great companion if you study abroad.

FAIR CREDIT RATING

★★★★

4.4

  • Pre-qualify for a card today and it will not impact your credit score
  • Less than perfect credit is okay
  • Mobile account access at any time
  • Fraud protection for stolen or lost cards
  • Account history is reported to the three major credit bureaus in the U.S.

N/A

N/A

24.9%

$0 – $99

Bad, Poor Credit

You can prequalify for the Indigo® Mastercard® for Less than Perfect Credit without impacting your credit score. You may be approved for an account that has no annual fee for the first year, depending on your credit history.

Just keep in mind that after the first year, every cardholder pays the same annual fee. Since this card charges a higher-than-average interest rate, you may want to consider the other options above and consider this card as a last resort.

FAIR CREDIT RATING

★★★★

4.4

  • Checking Account Required
  • Fast and easy application process; response provided in seconds
  • A genuine Visa credit card accepted by merchants nationwide across the USA and online
  • Manageable monthly payments
  • $300 credit limit (subject to available credit)
  • Reports monthly to all three major credit bureaus

N/A

N/A

See Terms

See Terms

Fair, Bad Credit

The Total Visa® Card works with consumers who have bad credit and fair credit — but the card’s fee structure leans toward the bad credit end. New cardholders must pay a one-time program fee and an annual fee when they activate their card.

Since the initial credit limits remain low, these two fees will eat up almost half of the credit limit before you even use your card. Still, this card does provide a credit building opportunity if you’re struggling to find approval for an unsecured credit card elsewhere.

FAIR CREDIT RATING

★★★★

4.3

  • Easy application! Get a credit decision in seconds.
  • Build your credit history – Fingerhut reports to all 3 major credit bureaus
  • Use your line of credit to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt
  • Not an access card

N/A

N/A

See Issuers Website

$0

Poor Credit

The Fingerhut Credit Account technically isn’t an open-loop credit card. Instead, this account offers access to an unsecured credit line you can use to purchase name-brand merchandise through Fingerhut and its online retail partners.

And since Fingerhut reports your payment history to each major credit bureau, you can improve your credit history — and upgrade to a traditional unsecured credit card — with responsible use.

FAIR CREDIT RATING

★★★★

4.3

  • Qualified applicants will enjoy benefits including 1% cash back rewards on all purchases, no annual fee, and a competitive APR. Terms apply
  • CreditOneBank.com and the Credit One Bank mobile app makes it easy to access and manage all your account information and make payments whether you’re at home or on-the-go.
  • Zero Fraud Liability protects you if your card is ever lost or stolen. Rest easy knowing you won’t be held responsible for unauthorized charges.
  • Use your Apple device to make purchases securely through Apple Pay®. Apple Pay is a registered trademark of Apple, Inc.
  • Keep an eye on your credit information with free online access to your Experian credit score. Terms apply.
  • Get access to billing statements online when you Go Paperless. Enjoy quicker access to your account documents without the hassle of having to wait ‘til they arrive in the mail.

N/A

N/A

17.99% to 23.99% Variable

$0 – $99

Fair

The Credit One Bank® Platinum Visa® with Cash Back Rewards is another top option from Credit One Bank® with the same terms as its sister offers. Qualified applicants will receive cash back rewards and a competitive APR. The fees you pay are determined by your creditworthiness.

You can manage your account via its mobile app,  enjoy $0 fraud liability, and use your card at all locations that accept Visa, which is basically everywhere, all without putting up a security deposit.

As with most important things in life, building a credit history takes time and patience. Banks like to lend money and extend credit to someone who has a long track record of paying off debts on time and in full. A limited credit history doesn’t prove much in their eyes.

You may not find success if you’re looking to jump from bad credit to good credit in a matter of a few weeks. But after a few months, you could see your score improve from fair to good if you properly use your new credit card.

The first step in preparing your credit-building plan is reviewing and understanding the state of your credit report. That means figuring out what’s holding your score down and learning how to fix the issues.

Several factors come into play when calculating your FICO credit score. The most important are your payment history and amounts currently owed. Those two alone make up 65% of your score.

The other 35% of your credit score is determined by the length of your credit history, the types of credit listed on your report (also known as your credit mix), and the number of new accounts on your credit reports.

How to Build Credit with a Credit Card

A credit card can positively impact all of these categories if you’re financially responsible. For one, opening a new card will increase your available credit, which helps your amounts owed.

Your available credit plays almost as important a role as the amount you owe. This is also known as your credit utilization. For example, if you have $1,000 in total credit and a $250 balance, you have a 25% credit utilization.

That looks OK to a bank, which may start to flinch once you surpass 30% in credit utilization. If you add a new credit card with a $0 balance, you’re increasing your total available credit, which in turn lowers your utilization.

For example, imagine a person with 25% utilization. If he or she adds a new card with a $500 limit and $0 balance, their total credit jumps to $1,500. That $250 balance is now 16.6% utilization. Banks love that.

A credit card can also combine with a personal loan, auto loan, or other loan product to improve your credit mix. Most lenders want to see that you’ve responsibly made payments on different types of loans.

But make sure you don’t take on too many loans simply to look good to lenders. While lenders may want to see that you can successfully pay different types of loans, they won’t be anxious to approve you for more financing if you’re already weighed down by debt.

Also, since most credit card issuers report your payment history to each credit reporting bureau, you can improve your credit score by adding on-time payments and low balances to your credit report.

This solves one of the biggest issues most people have with their credit score. In many cases, a poor credit or fair credit score hinges on payment history or current debt load. One single late payment can drop your score by as much as 100 points. That late payment will live on your credit report for two years, but its importance weakens over time.

If you have recent late payments, the only way to lessen their impact on your credit report is to make all of your current payments on time while waiting for your late payments to get a little older. Your negative marks will have less impact on your credit score over time.

If you have a lot of current debt, you could easily sink your debt-to-income ratio, which can decrease your credit score quickly. The only real way to fix this is to pay down your existing debts as much as possible.

Credit card issuers and lenders typically report your balances to each credit bureau each month. Depending on when you pay a chunk of your balance down, you may have to wait up to one month to see an impact on your credit score.

But if you’re patient, persistent, and responsible with your new credit card, you could leverage that piece of plastic to catapult you from fair credit into the good credit range. Once that happens, you could find a whole new world of cards available to you.

There are two distinct types of credit card and loan products — unsecured and secured — and knowing the difference can save you some money.

Unsecured vs Secured Credit Cards

With a secured credit card, you must pay a refundable security deposit to the card issuer before you receive your card. This acts as a form of collateral if you stop making payments on your account.

The amount of your deposit typically equals the credit limit on a secured card. For example, you must pay the bank $500 for a secured credit card with a $500 limit.

The bank holds that money until you close your account. If you have no outstanding debts at that time, the bank refunds your deposit to you.

Your security deposit doesn’t act as payment for any charges you make to your account. If you use that new $500 secured credit card to go out to dinner right after you activate it, you’ll still have to pay off that charge when the bill is due.

An unsecured credit card requires no collateral or security deposit for approval. Depending on the card, you may have to pay an annual fee or application fee when you activate your new card. Typically, these fees are deducted from your initial available credit limit.

Most consumers prefer unsecured credit cards because they don’t require an upfront investment. But since the bank has no collateral or recourse if you default on your payments, getting approved for these cards is a little more difficult.

Lenders like security. After all, they can’t stay in business if you don’t pay off your loan. Without a security deposit, they want to make quite sure that you will pay your unsecured debt. That doesn’t mean that a less-than-perfect credit score will disqualify you from your unsecured card goals.

Many issuers offer unsecured credit cards for bad credit despite the risk associated with them. These cards tend to have higher annual fees and interest rates to make the reward worth the risk to the bank.

Equally, there’s no shortage of unsecured credit cards for fair credit. The trick is to find a card that’s specifically designed for consumers who have fair credit, such as those listed above.

Far too often, card issuers clump bad credit and fair credit together. In reality, there’s a pretty large difference between the two. Still, these cards charge the same sky-high fees — typically those designed for bad credit applicants — to all cardholders. That’s simply not fair for someone who has a score in the mid-600s and is nearing good credit territory.

With a card designed for your specific credit history, you’ll pay the right fees and interest rate. That can save you money over the long haul. Plus, most of the issuers of the cards above also offer cards for consumers who have good credit.

As your responsible behavior reflects upon your credit report, you could qualify for a card upgrade without having to fill out extra applications or pay unnecessary fees.

Fair credit is kind of like being in the middle of the pack. Think of it as a C-average student or a .200 hitter in baseball. You aren’t the worst, but you aren’t the best.

But there’s a positive way to look at fair credit. You can always go up from where you are.

Just like studying for a test or practicing your baseball swing, no rule says you have to be average forever. In fact, having fair credit gives you a bit of a head start on building a good credit report.

FICO bases its scores on a range between 300 and 850. Lenders consider everything below 580 as very poor. The area between 580 and 669 is fair. From 670 to 739 is good. Between 740 and 799 is very good, and 800 to 850 is excellent.

FICO Score® Ranges

 

As you can see, fair isn’t far from good. Depending on where you fall within the scale, you may only be a few points from being in a category that offers you several more credit card options.

You can gain those score points simply by making on-time payments, paying down existing debt, or increasing the credit limit on one of your credit cards — thus improving your credit utilization.

You should consider a few things if you’re closing in on good territory but really want to apply for a credit card right now. The most important consideration is that unsecured credit cards for fair credit don’t compare to the same cards for consumers who have good credit. You’ll likely receive a higher credit line with a more favorable interest rate and no annual fee.

Average APRs by FICO Score

You could shave off up to 7% from your card’s APR by waiting to apply when your score improves.

Cards for fair credit tend to target consumers who are building credit — hence the higher fees and other charges. When deciding which card to apply for right now, look at the cards that each issuer offers to good credit applicants as well. If you can qualify for the fair credit offering, you can spend a few months proving your trustworthiness to the lender.

When the time is right, you can request an upgrade to the next card up. If your current card issuer doesn’t offer a card for good credit, you lose that opportunity. Your only other recourse is to apply for a different card when your credit rating improves.

You can either keep your old card (and continue to pay higher annual fees and charges) or cancel the account. If you cancel your credit line, though, you’ll lose that available credit and the advantage it gives to your credit utilization on your credit report.

Unsecured cards aren’t all created equal. Some have more value than others — which makes them a little harder to get. If you’re simply looking for a credit line that can help you build credit, you’ll have the least trouble when applying for a store credit card.

These cards often have a catch: A store-branded card may only allow you to use the credit line at that store, otherwise known as closed-loop. And you’ll often find a higher interest rate and lesser rewards with these specialty cards.

Fingerhut Credit Account

Store cards, like the Fingerhut Credit Account, are among the easiest to be approved for with a poor credit score.

But these cards often consider applications from consumers who have bad credit because it helps stores increase their business. If you have a credit card to a certain store or company, you’re more likely to shop there and make larger purchases that you can pay back over time. That’s a form of brand loyalty that no advertising or marketing campaign can build.

When choosing a store credit card to add to your wallet, don’t just look at the company that runs the business. In most cases, that company has nothing to do with the credit card itself. Instead, the company hires a bank to issue and maintain credit accounts.

When you make your payment, you make it to the bank — not to the store. The bank runs your transaction and lends you the money to pay for your purchase. Two of the most popular issuers of store credit cards are Comenity Bank and Synchrony Bank.

Comenity doesn’t have the best reputation for its customer service. In 2015, Comenity was ordered to repay more than $61 million to cardholders it had fraudulently sold payment protection products to.

In short, these cards may be the easiest to get, but they’re often the hardest to get rid of.

If you have a fair credit score and want to rebuild your credit without the hassle of a potentially problematic card issuer, consider the tested and proven cards listed above. Each has a long history of providing reliable customer service and credit products with fair terms for your current financial situation.

Credit card issuers don’t print their minimum guidelines for approval, so there’s no way of knowing the exact credit score you need to get the card of your dreams.

But fair credit isn’t a turn off for most lenders. There are nearly as many credit cards for bad credit as there are unsecured credit cards for fair credit. That means that there’s a lot of competition in the marketplace — and a good chance that you can find approval if you know where to look.

And, depending on who you talk to, your bad credit score may not be so bad after all.

Traditionally, a credit score of between 300 and 650 is considered bad credit. However, some card issuers rate scores of 550 to 650 as being poor credit and may consider your application for an unsecured credit card.

Since the same range considers any score between 580 and 669 as fair, you can possibly fall well below the fair line and still qualify for an unsecured credit card. If you’re firmly in the poor category — and are against building credit with a secured card — you can consider a card designed for bad credit.

These unsecured cards sometimes cost more than a secured card (especially when you consider that a secured card refunds your security deposit when you close your account in good standing). But if you’re willing to pay the fees, you can possibly find a card that can help you out until you’re ready to upgrade to a new piece of plastic.

If you’re unsure whether you’ll qualify for an unsecured credit card, look for card issuers that provide a prequalifying form. This form conducts a soft credit pull to determine whether you’re a good fit for the card.

Screenshot of Capital One Pre-Approval Page

Many issuers will let you check for preapproval offers to get an idea of your approval chances.

While passing the prequalifying test doesn’t guarantee that you’ll get the card when you officially apply, it does give you a better idea of your chances if you take the next step.

Milestone, for example, allows you to see if you prequalify before formally applying for the card. By submitting a short form, you’ll find out if you can add the popular Milestone® Mastercard® – Less Than Perfect Credit Considered to your wallet. If you aren’t approved for that card, Milestone will possibly suggest another card in its portfolio that may match your needs and abilities.

And as you improve your credit rating over time, you may be able to upgrade to another Milestone card that provides a lower APR and higher credit line. That upward momentum is great for improving your financial health.

Business credit is one of the hardest types of credit to build, but it’s not impossible.

Most business credit cards lean on your personal credit rating when considering your application. That’s because many small businesses don’t have enough credit history tied to the company to warrant a trustworthy credit score.

If you have a less-than-perfect credit rating, many business credit card issuers will reject your application, but a few cards can give you just what you need.

Capital One® Spark® Classic for Business

The Capital One® Spark® Classic for Business is a top choice for fair-credit entrepreneurs.

An easy way to infuse some capital into your growing business is with the Capital One Spark® Classic for Business card. This card typically accepts applicants who fall in the 670-and-up range and offers cash back opportunities and no annual fee, as well as all of the fraud protections and other perks you’d expect from Capital One.

And every cardholder automatically enters the Capital One Credit Steps program. This free program allows Capital One to automatically review your account every six months to see whether you qualify for a credit limit increase or card upgrade. If you do qualify, the issuer will automatically adjust your account accordingly.

This removes one burden from your entrepreneurial shoulders. Typically, card issuers require you to call them or fill out an online form to request a card upgrade or credit limit increase. Through the Credit Steps program, you’ll get your well-deserved upgrade without having to ask.

Another perk of the Capital One Spark® cards is that the issuer currently offers five different cards with varying levels of rewards and utility. While four of the five require excellent credit, there’s nothing stopping you from upgrading over time as you improve your credit rating. These cards also help you build business credit — which can open doors to new financing opportunities and other valuable financial products that you’ll need as you grow and scale your business.

Since more than half of all small businesses fail within five years — most because of a lack of capital or credit — a card like this can mean the difference between making it through tough times or hanging the dreaded Out of Business sign on your door.

As with a bathing suit or new bicycle one size doesn’t always fit all. The same goes for credit cards, where your needs are as important as the issuer’s approval standards.

For example, a store card may work for some, but it wouldn’t do much for you if you’re looking for a credit card that you can use anywhere. You also may not find much use for a card that starts you out with a $300 limit if you need access to $1,000 or more. A student credit card isn’t suitable for a 40-something professional.

While we’d all love to slide a top-of-the-line card with all of the bells and whistles into our wallet, some people need to work on their credit profile before they can make that move.

To find the card that best suits your needs, you need to first define what those needs are. Create a list of what you think you need right now, six months from now, and a year from now. Use that as the starting point for any card you consider.

Next, pull your annual free credit report. While this report won’t reveal your actual credit score, it will show you the negative items holding your score down.

How to Check Your Credit Reports

If you have a lot of recent negative items, you may want to consider waiting a few months for them to age before applying for a new card. If your negatives are older, you can choose your next step for finding the right card.

That step should include finding a credit card company that offers a prequalifying form before you officially apply. This form will tell you if you’re likely to gain approval or rejection when you apply.

The beauty in these forms is that they use a soft credit pull to access your credit report info. This form of a credit check doesn’t reflect on your credit report as would a hard inquiry. Too many of the latter can lower your credit score.

Also, consider your life situation when deciding which card you want. A student credit card can offer great value if you’re currently enrolled — or about to enroll — at an accredited institution. These cards can also give you interest rate reductions or statement credits if you maintain a certain GPA.

Some cards may also offer perks if you’re a military veteran or social service employee. A bank credit card may provide savings account benefits if you have multiple financial products through the institution.

In short, your situation will dictate the right card for you. When you factor in your credit score, financial health, and overall credit needs, you can whittle down the options to find the card that stands alone as your best choice.

You wouldn’t buy a new car without test driving it or purchase a new home without touring it first. The same should hold true with applying for a credit card.

If you’ve made it this far, you’re well along in your research for the best unsecured credit cards for fair credit. Your next step is to research the individual cards listed above to find the one that best matches your needs. Once you get a feel for how each card works, you can move on to the next step in your research.

That means looking for prequalifying forms that can give you an idea of your approval chances before you officially apply. Doing so will limit your exposure to hard inquiries and keep your score trending upward.

Once you’ve added your new credit card to your wallet, you should continue your current level of research and responsibility by keeping your balance low and your payments on time. You’ll soon find yourself researching the best credit cards for good credit.

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Bad Credit

COVID-19 Infects Financial Stability, But Chronic Low Wages Are The Culprit

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The Federal Reserve found in 2019, 37 percent of adults saying they could not cover a hypothetical expense of $400 with cash, savings, or a credit card, instead, they might turn to Payday lenders who can charge up to 400% interest for a two week loan, according to the Consumer Financial Protection Bureau. What’s their Pay-Day loan collateral? The wages and salary the employer has yet to pay. Workers may have to pay up to 400% interest for access to wages and salaries they earned, but have not yet received.

Remember that sinking feeling when you first started work? You might have even wondered why the employer didn’t pay you first. A bi-weekly paycheck means you work for two weeks before getting paid. For those living paycheck to paycheck, this two weeks can put you behind with bad credit and high interest rates and credit card fees.

Though many gig workers want the benefits, union access and labor rights afforded to regular employees, being paid instantly is a substantial perk to a gig. At least one company, Ceridian
CDAY
a global human capital management technology company – may have a partial solution to the payday loans and liquidity problem of “more month than money.” They seem to be having some success convincing their clients that those who work for them want the option to be paid like day laborers.

The company offers a product which allows employers to pay their employees at the employees’ request before pay day. It is not an advance, but rather payment for work already done. Some employers like it. “When you work in a call center, there are some things that aren’t very flexible. We need employees at their desk, on the phones making calls…” said an official for Crescent Bank (via Ceridian’s public relation’s center). “We can’t offer a ton of flexibility with attendance, [but] we can provide a benefit that other shops are not offering,” he said referring to Ceridian’s product.

Employees might be attracted to employers who offer this option, because faster pay could solve a low liquidity problem. Ceridian commissioned a Harris poll survey of 2,070 U.S. adults ages 18 and older — 1,158 who are employed — for three days starting October 19, 2020. The findings (not posted but sent to me privately upon request) are similar to the Fed’s study, one-third of Americans do not have enough saved to cover monthly groceries. This cash poor situation also creates uncertain futures. The Federal Reserve finds only 37 percent of non-retired adults think their retirement savings are on track, while 44 percent think it is not and 19 percent are unsure.

Older Americans tend to have more savings for monthly groceries. 86% of respondents 65 and older report having the required savings compared to 50% of 18–34 year olds. This may say more about the number of years they’ve had to save than their real stability. Older Americans are not out of the woods.

In an ideal world, a near-lifetime of work would afford every older household a financial buffer to cushion a blow to income or health. Most try to have some savings and reasonably priced credit lines in case of unexpected medical bills or joblessness. But in the not-so-ideal world we live in, millions of older households do not have cash savings or other liquid assets to make up for multiple months of lost income.

As a result, financially fragile older households are more at risk of depleting their retirement savings to make ends meet, as evidenced in the current Covid-19 recession. When these households retire — or are forced into retirement—they will have less retirement income and will face downward mobility in the last years of their lives.

STAGNANT WAGES CAUSE FRAGILITY

Most financial fragility is caused by low pay, not the frequency with which low wages are paid. According to the Economic Policy Institute, wages have stagnating over the last 40 years (disclosure: I sit on the board of EPI). “From the end of World War II through the late 1970s, the U.S. economy generated rapid wage growth that was widely shared,” the institute reports. Since 1979 average wage growth has slowed sharply, with the biggest declines in wage growth at the bottom and the middle.

Low wages and the ensuing financial fragility are the result of eroding unions and worker power. Workers no longer have the political clout they once did. And so over the past 40 years, they have only been able to achieve weak and sporadic increases in the minimum wage. These minimal increases have not been enough to keep up with inflation. The real value of the federal minimum wage (currently at $7.25 per hour) has dropped 17% since 2009 and 31% since 1968 (adjusted for inflation). This amounts to about $6,800 less per year for a full-time worker making the federal minimum wage today than for their counterpart 50 years ago.

It’s unlikely employers using products such as Ceridian’s will be able to solve the financial fragility problems of the U.S. That problem stems from 40 years of stagnating wages and waning worker power. In other words, it’s not an issue of how often, but rather how much employers pay their workers.

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A Look Back At Housing 2020: Relief, Reality, And Rationality

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National Geographic has a series called Seconds From Disaster that, according to it’s website, uses “ Advanced computer graphics, forensic science, eyewitness accounts, interviews with experts, archival footage and re-enactments [to] piece together in great detail the events that led to some of the biggest disasters of modern time.” My last few posts remind me of the series; the housing market in the United States really is seconds from disaster at least figuratively. What can stop this from becoming a disaster of government run and rationed housing? The answer is relief, reality, and rationality.

Relief

It’s simple. When you tell people they can’t go to restaurants and bars those businesses can’t make any money and they lay off employees. When those employees don’t get a paycheck they can’t pay rent. Assuming that this intervention – shutting down the economy – is the right thing to do, wouldn’t it make sense to help the people most impacted by replacing some or all of that lost income?

Instead, what government has done is ban eviction. That makes no sense. If people needed food, you wouldn’t advise the suspension of shoplifting laws so people could help themselves to groceries at the local market, you’d get them cash for groceries or you would distribute them to people in need. As I’ve already pointed out, eviction bans are a time bomb of unpaid rent.

Government can solve this problem by having lenders give fast cash to housing providers who have residents with unpaid rent. It would be a forgivable loan and could be settled up in the months ahead with rent rolls and balance sheets submitted and a promise not to try and collect back rent if a loan is made. The wrong thing to do would be to have government distribute the relief; government isn’t set up to give out money, banks are.

Reality

Marriages, car loans, and businesses arrangements sometimes fail. Courts exist to adjudicate disputes that arise when transactions don’t work out. Eviction is no different. The vast majority of rental relationships between housing providers and their customers work out fine. Sometimes there is friction. Sometimes the housing provider is a bad actor. Sometimes the resident is. Housing providers don’t make money by evicting people any more than a bar makes money by throwing out its customers.

Contrary to the hype, eviction is rare in the United States and when it happens it is very expensive, complicated, and usually resolved without a sheriff putting the contents of a rental unit on the sidewalk. I did an analysis of hyped eviction data from Seattle and the actual removals in one year were vanishingly small, just .7 percent of all rental housing. How many of these 1,200 removals were because of bad actors? How many were the product of lost jobs? We don’t know because that data isn’t tracked. What’s important is eliminating the causes of eviction; especially poverty, mental health issues, and addiction all issues that when combined do lead to serious issues that impact housing. Making eviction more difficult helps eviction defense attorneys not residents short on cash or having complex problems.

Rationality

Maybe it’s not the best or the right term, but most human beings are rational actors in any economy. If prices go up, people find substitutes for products with higher prices. If they can’t find a substitute, they make due and change their lives around to get what they need. At the same time, producers strive to get a product to market that meets consumer demand at a lower price. This isn’t ideology it is how the world works. Price sends important signals to people on how to behave, innovate, challenge the status quo, and propose changes. Price isn’t a bad thing it is our best friend.

When housing prices go up, yes, it is because there isn’t enough. I’ve heard very smart people – much smarter than me – dispute this. “It is much more complicated than that,” they say. Well, it isn’t. It is that simple. Smart people don’t like three piece puzzles or crosswords with simple clues. Why go to Harvard or Yale or start a lab at Princeton if housing problems were so simple I could solve them. It’s this kind of lens through which government and experts survey the “housing crisis.”

Avoiding Disaster

A loftier image I often use is that of the Trojan horse, one that has become a trope for ignoring the obvious. Take people’s income away for a good reason then replace that income. Want to avoid the consequences of poverty – like bad credit, evictions, and housing cost burden – work to eliminate poverty. And if you want people to solve problems creatively, get out of their way; they can usually figure out the solution and if you can help, do it.

The fact that housing is a commodity is not the problem. The housing problem is worsened when government and non-profits decide to get in the way of buyers and sellers of housing with rules intended to protect consumers but instead become a proxy for incumbents who see their equity rise with limited supply. We should not subsidize that self imposed scarcity; instead we should encourage more housing everywhere of all kinds for people of all levels of income.

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Maryland Auto Insurance review 2020

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Formerly known as Maryland Auto Insurance Fund, Maryland Auto Insurance was created by the state of Maryland to keep the state’s drivers on the road legally. They offer a transitional solution to uninsured drivers in Maryland and will not turn anyone away, especially those who have a poor credit history, are high-risk drivers and have been denied coverage from other providers.

To help you decide if they are the right provider for you, we have broken down all the details about the types of insurance it offers, available discounts to help you save and how it differs from other providers in the area.

Maryland Auto Insurance

Maryland Auto Insurance provides a broad range of coverages and discounts to meet most driver’s unique needs.

Types of Coverage

The company’s standard car insurance policies cover the minimum amount of insurance required by Maryland law, including:

  • Liability: The minimum amount of liability coverage required by Maryland Law is $30,000 for bodily injury per person, $60,000 for bodily injury per accident and $15,000 for property damage per accident.
  • Uninsured motorist: The minimum amount of uninsured motorist coverage required by Maryland law is $30,000 for bodily injury per person, $60,000 for bodily injury per accident and $15,000 for property damage.
  • Personal Injury Protection (PIP): Maryland law requires insurers to offer their policyholders at least $2,500 in PIP coverage.

The provider will not deny coverage to anyone, as long as they:

  • Are a Maryland resident
  • Own an automobile registered in Maryland OR have a valid Maryland driver’s license
  • Have been canceled or not renewed by a standard insurer for a reason other than non-payment of premium OR have been refused insurance by two (2) standard insurers
  • Do not owe Maryland Auto any unpaid premium.

It also offers additional coverage options like:

  • Collision
  • Comprehensive
  • Towing
  • Rental Car

Cost of Maryland Auto Insurance Car Insurance

Maryland Auto Insurance determines premiums based on risk level, vehicle type, driving experience, location, amount of coverage needs and several other factors. Consumers can request a personalized quote on their website.

One thing that differentiates this insurance provider from others is that they do not factor in credit history when determining the premium, which can help those with bad credit save money.

On average, Maryland drivers can expect to pay the following depending on their insurance coverage selections:

Minimum Coverage Full Coverage
$1,278 $3,764

Discounts

Because this provider is a transitional option designed for drivers who can’t get insurance elsewhere, there are few discounts available. However, they do offer some ways to save money on an auto policy.

Reasons Why Maryland Auto Insurance is a Great Option

Maryland Auto Insurance is a great provider for those seeking coverage after being denied elsewhere, especially those with bad credit or no credit history.

The company also provides great coverage options for high-risk drivers, including Uber and Lyft drivers, towing and rental cars. However, due to their commitment to covering higher-risk individuals, the cost for coverage can be a bit higher than other providers in the region. Be sure to shop around to determine whether or not Maryland Auto Insurance is the best auto insurance provider for your needs.

Due to Maryland Auto Insurance being a nonstandard transitional provider, all applicants must prove at least two other standard insurers have denied them to qualify, so keep that in mind before requesting a quote.

Maryland Auto Insurance Ratings, Reviews, Customer Satisfaction & Complaints

Because Maryland Auto Insurance is not a standard insurance carrier, information about their financial strength and customer satisfaction is pretty limited. However, there are a few resources customers can refer to when determining the company’s customer satisfaction:

  • Better Business Bureau: The company currently is not accredited by the Better Business Bureau (BBB), nor does it have a BBB rating. However, some interesting insights can be gained from customer complaints. Namely, the company appears to be slow to respond to claims requests, especially when handling claims for people who have been involved in an accident with one of their clients.
  • Google: According to their Google My Business listing, the company has 165 reviews and a 2.3-star rating. Again, most of the complaints are from drivers not insured by Maryland Auto Insurance who have been involved in accidents with one of their insured drivers.

Additional Policies Offered by Maryland Auto Insurance

In addition to regular auto insurance, Maryland Auto Insurance offers policies for Uber and Lyft drivers, motorcyclists and scooters and other low-speed vehicles. It does not offer coverage options for homeowners, renters, life insurance or any other type of insurance product besides motorized vehicles.

Frequently Asked Questions

What is the best auto insurance company?

The best auto insurance company is different for everyone and is largely based on personal preference. It’s a good idea to shop around and compare rates from different carriers, then speak with a licensed insurance professional.

What do I need to get a quote from Maryland Auto Insurance?

Receiving a personalized quote from Maryland Auto Insurance is simple. First, you’ll need to be prepared to prove that you are a Maryland resident, possess a Maryland driver’s license and have at least two previous denials from other carriers. Then you can request a quote online.

How do I file a claim with Maryland Auto Insurance?

Maryland Auto Insurance offers 24/7 claims assistance through their online portal and via telephone. Customers can visit their claims reporting service online to file their claim or dial 800-492-7120 to get assistance.

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