Best Credit Cards For Bad Credit
Take a look at the credit card options that made our list.
No credit history
When you have bad credit, you are probably looking for any financial instrument that will help you improve your financial situation. The additional card is a debit card designed to help a range of consumers, including:
- Anyone looking to rebuild their credit
- Young people 18+ who want to build their credit
- Consumers who want to maintain a high credit rating
The Extra card allows you to replenish your credit and also offers a rewards program. You can log into your bank to pay for each transaction, use the Extra debit card, and have it reported to the credit bureau at the end of each month.
Extra does not perform a credit check and you do not deposit money to open the account. For just $ 8 per month, you can replenish your credit (without the high interest rates charged by credit cards), take advantage of the rewards program, and use a debit card that is superior to the standard secured credit card.
2. Best overall: Capital One® Secured Mastercard®
If you need to create or replenish credit, the Capital One® Secured Mastercard® is a great option.
Its $ 0 annual fee, nearly automatic credit increases (after your monthly payments are made), and built-in expense control options all turn your bad credit in a positive direction.
Additionally, you can observe the positive steps you have taken by monitoring your credit profile and credit score.
3. Best Unsecured Credit Card: Capital One® QuicksilverOne® Cash Rewards
It is a bit riskier for those with bad credit to choose to use an unsecured credit card, as the threat of high interest rates, potentially high annual fees, and monthly maintenance fees can hamper your intentions. to have good credit. Therefore, if you are looking for an unsecured card, it is important to take the time to research the details of the cards you are applying for.
The Capital One® QuicksilverOne® Cash Rewards credit card is a card you can (and should!) Consider because of the opportunity it can offer you to strengthen your credit. Plus, this card offers unlimited 1.5% cash back on every purchase you make.
If you pay your first five payments on time, you qualify for a higher line of credit.
4. Best for Rewards: Discover it® Secured Card
The Secure Discover it® Card provides cash back rewards on every purchase with 2% cash back on restaurant or gasoline purchases and unlimited 1% back on everything else. Plus, you get dollar for dollar for any cash back rewards you’ve earned – automatically – at the end of your first year.
As you research more cards, you will notice that most secured credit cards do not have rewards programs, so the $ 0 annual fee for the Discover it® Secure Card, plus rewards, is the icing on the cake.
5. Ideal for no credit check: OpenSky® Secured Visa®
For those with bad credit, these three words can bring great relief: no credit check.
The OpenSky® Secured Visa® credit card is a great option if you’re going through a rough patch, and not just because of its no-credit policy: you don’t have to have a bank account.
Your deposit, which is refundable, becomes your credit limit on your card. You can choose it yourself, from $ 200 up to $ 3,000. OpenSky also reports to the three major credit bureaus, which means you can build credit quickly.
6. Lowest APR: SDFCU Savings Secured Visa Platinum
The strengths of the State Department Federal Credit Union, or SDFCU Savings Secured Visa Platinum Card, include a few major perks, including a 13.24% lower variable interest rate. It is one of the lowest APRs among secure cards.
Plus, no income verification is required for approval, and there are no foreign transaction fees. In addition, you get card-based life insurance with this card. You must join SDFCU before applying for this card, but joining is easy and you will get free membership.
For every $ 1 you spend you’ll earn one point, which isn’t a great bonus point offer, but the low APR benefits anyone trying to accumulate credit.
What constitutes bad credit?
If you find yourself in a situation where your credit rating is bad, you are not alone. According to FICO, about 37% of Americans have FICO scores between 300 and 850.
Unfortunately, a bad credit score can affect your financial freedom in several ways. It’s not just banks and credit card companies that are “interested” in this seemingly fictitious number. Homeowners, insurance companies, utility companies, and cell phone providers will also be curious about your credit score, and can sometimes deny you services if your score is low.
What really constitutes a bad credit score? According to Experian, FICO score ranges fall into the following categories:
Choose a credit card
If you are between 400 and 500 credit points and think there is no way to get a credit card, think again. However, there is nothing more important than carefully researching all of your options because unlike people with great credit scores, you can’t afford to kill your score even more.
What to look for in a credit card
If your credit is bad, it may be a good idea to look for a secured credit card. Usually, credit card companies that offer secured credit cards overlook bad credit. (Yes, sometimes even if you have bankruptcy in your name.)
Essentially, a secured card requires a cash security deposit which becomes the line of credit on your account. For example, if you put $ 600 on the account, you can charge up to $ 600. Eventually, with good behavior (that is, paying off your credit card every month), the business will likely allow you to extend your line of credit.
First and foremost, make sure you choose a card that reports to the three major credit bureaus: Experian, Equifax, and TransUnion. This way you can make sure that your credit rating goes up.
How to apply for a credit card
Whatever you do, don’t apply for ten different credit cards at once. Because you’ve researched it thoroughly (right?) And know which cards you’re likely to be approved for, you’ll want to apply one at a time. Too many inquiries can further damage your credit score.
How to increase your credit score
The worst thing you can do about your credit score is to do nothing at all. And stay away from credit cards altogether? Bad idea. You can never completely rebuild your credit score by completely avoiding credit.
When you get a credit card, charge a little and pay off the credit card every month. If you try to rebuild your credit, you won’t be able to do it by carrying a balance from month to month.
In your credit card research, beware of subprime credit cards that target people with bad credit. A combination of high interest rates and extremely high fees could land you in a big mess of low credit again.
Developing good credit habits is important, and there are enormous resources out there for you. The most important thing to do consistently is to pay everything on time, including your library fines and medical bills, and especially your credit card.