Credit Cards Best Suited for Bad Credit

Comparing the best credit cards for bad credit:

A closer look at the top credit cards for people with bad credit

The Discover it® Secured Credit Card

No credit score required, cash back rewards, no annual fee, and credit line matches security deposit (starting at $200).

Rewards rate: Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases automatically.

Intro APR: N/A for purchases, 10.99% for six months on balance transfers.

Regular APR: 27.99% Variable APR.

Signup bonus: Cashback Match™ (offers matched cash back at the end of the first year).

Our verdict: The Discover it® Secured Credit Card is essential for individuals looking to build or rebuild their credit. As someone with a credit score in the lower range, we found this card particularly valuable. With no annual fee and the opportunity to earn cash back rewards, it offers a practical way to establish credit while being rewarded for everyday purchases. The option to transition to an unsecured card after responsible credit management is an added incentive. For those seeking a secured credit card with reasonable deposit requirements and a path to better credit, the Discover it® Secured Card is a clear winner.

Hidden perks:

• Access to Discover’s innovative sign-up bonus offer.
• Option to earn cash back rewards on purchases.

Best suited for: The newbie

Pros:

• No annual fee.
• Cash back rewards.
• Opportunity to graduate to an unsecured card.

Cons:

• Minimum $200 security deposit.
• Higher variable APR compared to some secured cards.

Apply now: Discover it Secured Credit Card

Capital One Platinum Secured Credit Card

Rewards rate: N/A (No rewards offered on this card).

Intro APR: N/A (No introductory APR for purchases or balance transfers).

Regular APR: 30.49% Variable.

Signup bonus: N/A (No welcome offer or signup bonus).

Our verdict: The Capital One Platinum Secured Credit Card is an excellent choice for individuals with poor credit scores aiming to rebuild their credit without significant upfront costs. With a potentially low security deposit requirement and no annual fee, it provides an affordable opportunity to establish better credit. However, its high variable APR highlights the importance of responsible credit usage and timely payments. If you’re starting your credit journey or need to rebuild your credit, this card can serve as a valuable steppingstone, eventually providing access to better credit options.

Hidden perks:

• Regular reporting to major credit bureaus to improve credit history.
• Potential for a higher credit line with on-time payments.
• $0 Fraud Liability for unauthorized charges, providing peace of mind.
• Access to CreditWise® credit alerts for credit monitoring.
• No foreign transaction fees, making it suitable for international use.

Best suited for: The newbie (individuals new to credit or seeking to rebuild credit)

Pros:

• No annual fee.
• Low minimum-security deposit (deposit as low as $49).
• Potential for a higher credit line with on-time payments.
• No penalty APR.
• Reports to three major credit bureaus.

Cons:

• High variable APR compared to some similar cards..
• Low maximum credit limit for initial credit line.
• Requires a credit check for approval.

Apply now: Capital One Platinum Secured Credit Card

OpenSky® Secured Visa® Credit Card

Rewards rate: No rewards offered on this card.

Intro APR: Not applicable, no introductory APR for purchases or balance transfers.

Regular APR: 17.39%, variable.

Signup bonus: Not applicable, no welcome offer or signup bonus.

Our verdict: The OpenSky® Secured Visa® Credit Card is a suitable option for individuals new to credit or those rebuilding their credit history. Its standout feature is the lack of a credit check during the application process, making it accessible to individuals with poor credit or no credit history. The card is best suited for those seeking to establish or improve their credit profile and are willing to pay the $35 annual fee for this opportunity.

Hidden perks:

• No credit check required during the application process.
• Flexibility to set your own credit limit with a security deposit ranging from $200 to $3,000.
• Multiple payment options for the security deposit, including debit cards, money orders, checks, and Western Union® money wires.
• Reporting of all activity to Equifax, Experian, and TransUnion, aiding credit score improvement with responsible usage.

Best suited for: The newbie

Pros:

• No credit check, making it accessible to those with poor or no credit history.
• Flexibility in setting the security deposit amount.
• Reporting to major credit bureaus for credit score improvement.
• Potential for credit limit increase with responsible usage.
• Multiple payment options for the security deposit.

Cons:

• $200 minimum security deposit could be a barrier for those with limited savings.
• No rewards or cashback earning capabilities.
• $35 annual fee, which may not be cost-effective in the long term once credit improves.
• Other secured cards with lower upfront costs are available.

Apply now: OpenSky Secured Credit Visa Card

Secured Chime Credit Builder Visa® Credit Card

Rewards rate: N/A

Intro APR: N/A

Regular APR: N/A

Signup bonus: None

Our verdict: The Secured Chime® Credit Builder Visa® Credit Card offers a unique and fee-free approach to credit-building. As per our reading, with it’s no credit checks, annual fees, or interest charges, it’s an attractive option for individuals looking to build credit responsibly.

Hidden perks:

• The card does not report credit utilization, which can be beneficial if you’re working with a low credit limit.

Best suited for: The newbie

Pros:

• No credit check to apply.
• No annual fees.
• No security deposit required.
• No foreign transaction fees.
• No APR.
• Reports everything but credit utilization to major credit bureaus.

Cons:

• Requires a checking account set up with direct deposit.
• Credit limit based on money you move to the account.
• No rewards.
• No introductory offer.

Apply now: Secured Chime Credit Builder Visa® Credit Card

Mission Lane Visa® Credit Card

Rewards rate: N/A

Intro APR: N/A

Regular APR: 26.99% – 29.99% Variable APR

Annual fee: $0 – $59

Credit needed: Bad to fair (300 – 670)

Our verdict: The Mission Lane Visa® Credit Card presents a viable choice for individuals with bad to fair credit seeking to establish or repair their credit history without the need for a security deposit. With a clear emphasis on building credit, this card doesn’t offer any rewards or introductory bonuses, ensuring users can concentrate on elevating their credit scores. Moreover, its absence of monthly maintenance or activation fees makes it a cost-effective solution for credit building, particularly suitable for those managing their finances on a budget.

Hidden perks: N/A

Best suited for: The newbie

Pros:

• No security deposit required, ideal for those who don’t want to tie up money as collateral.
• Opportunity for a potential credit line increase after seven months of on-time payments.
• Issuer’s prequalification process allows you to check eligibility without a hard credit check, avoiding potential negative impacts on your credit scores.
• Access to a free online credit score for cardholders.
• Instant decision on the application.

Cons:

• The starting credit limit can be relatively low, potentially as low as $300.
• The variable APR range is higher than average, making it essential to avoid carrying a balance on this card.

Apply now: Mission Lane Visa® Credit Card

How to tell if you need a credit card for bad credit?

Assess your credit score, review your credit report, and explore preapproval offers to determine if you require a credit card tailored for bad credit.

1. Check your credit score

Knowing your credit score is the first step in identifying if you need a credit card for bad credit. Obtain your credit score from reputable credit bureaus or online platforms that offer free credit reports. A credit score below 670 is generally considered a fair or poor score, indicating that you may face challenges in qualifying for traditional credit cards. Understanding your credit score allows you to gauge your creditworthiness.

2. Read your credit report

Once you have your credit score, delve deeper into your credit report to assess its accuracy, and identify areas that need improvement. Look for any errors, discrepancies, or negative items that might be affecting your creditworthiness. Addressing inaccuracies and resolving outstanding debts can help boost your credit score over time. Additionally, understanding the factors contributing to your poor credit will empower you to make informed financial decisions and improve your overall financial health. Regularly monitoring your credit report is a proactive measure to ensure your credit health.

3. Explore preapproval offers

Many credit card issuers offer preapproval checks that allow you to see if you qualify for their credit cards without undergoing a hard credit inquiry. This is particularly beneficial for individuals with bad credit, as excessive hard inquiries can further lower credit scores. Preapproval offers give you insights into which credit cards you have a higher chance of getting approved for, based on your credit profile. However, even if preapproved, carefully review the card’s terms, interest rates, fees, and benefits before applying.

4. How to choose a credit card for bad credit?

When selecting credit cards for people with bad credit, look for the best credit cards for bad credit with suitable terms and features. Compare credit card offers for bad credit and find ones you can apply for with bad credit. Evaluate options that match your needs and credit rebuilding goals, considering factors like fees, interest rates, and credit limits.

How to get approved for a credit card with bad credit?

To increase approval chances, apply for credit cards tailored to bad credit. Opt for secured or entry-level cards initially. Demonstrate responsible credit behavior to build trust with lenders and gradually access better credit card options. Timely payments, low credit utilization, and monitoring your credit report can improve approval odds for future credit card applications.

How to use a credit card to build credit?

Use credit cards for people with bad credit responsibly to improve your credit score. Make on-time payments, keep credit utilization low, and avoid overspending. Responsible credit card use demonstrates financial reliability, positively impacting your credit history. Over time, you may qualify for credit card upgrades or unsecured cards with better terms, rewarding your efforts to build credit.

Methodology

The methodology for selecting the best credit cards for bad credit involved extensive research and analysis of various credit card offers for bad credit. Factors considered included interest rates, fees, credit limits, and credit rebuilding opportunities. Customer reviews and expert opinions were assessed to ensure credibility and reliability. The goal was to provide accurate and helpful information to guide individuals seeking credit cards to apply for with bad credit, aiding them on their journey towards improving their financial health.

The product information provided here is based on research conducted up to a specific date and may have changed. For the latest and most accurate information, we recommend you visit the respective card’s website before proceeding.

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