Comparison of the top credit cards for people with bad credit
We are here to help you find the best credit card that is suitable for your bad credit.
So your credit score is not the best. Perhaps you haven’t had much success paying bills, or you have been late with payments. We have your back. Although it may seem counterintuitive at first, credit cards are one of the fastest and most effective ways to rebuild your credit. It’s true.
You can increase your credit with the right credit card in just a few months. It’s essential to learn how. We will tell you everything you need to know and show you how to do it.
Editor’s Picks: Credit cards for people with bad credit
Capital One Platinum Secured credit card: Ideal for flexible security deposits
Why we chose it:
If you are eligible, the Capital One Platinum Secured Credit Card allows you to increase your credit limit and deposit your security deposit.
Your credit score will determine the amount of your refundable security deposit required. It can range from $49 up to 0. Your deposit will determine your initial credit limit. It can range from $200 up to $1,000.
Mission Lane Visa®, Credit Card: Best for international acceptance
Discover it® Secured Credit Card: Best for cashback
We chose it because this card’s rewards
are not common with credit cards for people with bad credit. Cardholders can get 2% cash back at gas stations and restaurants (up to $1,000 combined purchases per quarter), then 1%.
Credit One Bank® Platinum Visa® for Credit Rebuilding Credit: Best for unsecured debt + Rewards
We chose it because:
Although the annual fee for this card is high ($75 for the first year, then $99 per year at $8.25 per month), it is an option for those with bad credit who want rewards and don’t have to pay a security deposit.
Secured Visa Credit Card from OpenSky®, Best for those with no credit
We chose it because:
There is no credit check required for this card. You won’t have to risk your credit score by applying. Your security deposit (up to $3,000) doesn’t need a bank account. You can pay it via Western Union, money order, or check.
Self-Credit Builder Account + Secured Visa®, Credit Card: The best financial product to establish credit
We chose it because:
The Self- – Credit Builder Account + Secured Visa credit card doesn’t require any credit history. The secured credit card is available to those who have a credit-builder credit account and have made at least three consecutive monthly payments. Once you have saved at least 0, you will be eligible for cashback secured credit cards.
It is crucial to improve your bad credit score
Bad credit can limit your options, but good credit can open up new doors. These include:
The smallest difference in interest rates can have a huge impact on the cost of a loan to finance a house or car. Your credit score will determine how likely you are to get approved for the best rate.
You will get better terms.
You can get more flexible payment terms and credit limits if you have a good credit rating.
You have access to the best credit cards.
People with excellent credit can get top-quality cards with attractive rewards, lower interest rates, and unbeatable sign-up bonuses. Check out these top credit cards for people with good credit.
Insurance can be cheaper.
You may be eligible for lower car insurance premiums if you have a good credit score.
Better financial reputation.
Your credit score is an essential factor in the eyes of potential landlords, tenants, utility companies, and other employers. Good credit standing is essential to protect your finances.
Here are some things to watch out for when applying for a credit card with bad credit
A credit card for poor credit can help you rebuild your credit. It is possible to get one with a little bit of research and consideration. You must do your homework.
Credit cards for people with poor credit can compensate for higher APRs and severe penalties. You should weigh the potential pitfalls against the benefits, especially if you aren’t a credit expert.
These are the main points to remember when you’re evaluating credit cards with bad credit.
Credit cards that are available to people with poor credit often have high fees. Ensure you pay attention to any program fees, annual fees, inactive account fees, or other fees. You can find all the information you need by reviewing the rates and fees of the card on the application page. The Schumer Box – is the top of the document. However, you should also be aware of lesser-known fees that may appear further down.
Bad credit cards often come with high-interest rates and sometimes penalty APRs. If you are certain that you will have a balance, it is essential to get the best rate.
Minimum/maximum security deposits:
Check the range provided to determine if your card requires a security deposit. Are you able to afford $1,000?
The card should have a credit limit that is high enough to permit you to limit your credit use.
- Targeted mailers are to be avoided: Beware of mailings that may target you. Banks often send these mailers to those with less formal education.
How to get credit cards for people with poor credit
You might be wondering if you are eligible for a credit line if you have made financial mistakes in the past or don’t have a good credit rating. You can increase your chances of approval by following these steps.
Your credit score is essential.
It’s crucial to understand your credit score before you start browsing and applying. Even if you have poor credit, knowing your score will help you decide whether to apply immediately or wait until your credit improves and you have more options. Each year, the three major credit bureaus must give you a free credit check. Your credit report can be requested online or by telephone.
Any fraudulent or illegal activity should be disputed.
You may need to investigate if your credit score is unusually low. You may be a victim of fraud or making mistakes that are affecting your credit score—correct any errors in your credit report.
Suppose you can pay off any outstanding debt.
Your credit utilization rate is one of the main factors that affect your credit score. High utilization can lead to lower credit scores. It’s best to pay off existing debts before applying for a credit card.
Find a card that suits your needs.
After you have done your research and are satisfied with your credit standing, it is time to begin looking for credit cards. Make sure you choose a card that meets your credit requirements. If your credit score isn’t yet high enough, don’t waste any time applying for or looking at cards.
Low credit requirements are required for the cards listed at the top. A secured credit card is another option for applicants with poor credit. Some offer rewards and need a one-time, refundable security deposit.
Credit cards: How to improve credit
A credit card can be a very useful tool in building credit history if used properly. It can be a great idea to learn how to manage your money and make timely payments.
Five factors make up your credit score: credit utilization, payment history, credit mix, and new credit. All five factors can be affected by opening a new credit card.
Responsible use of credit cards will have a strong impact on your payment history, credit utilization, credit mix, and other credit scores.
You can increase your credit score with a credit card by being disciplined and making regular payments. Set up reminders for autopay and calendar reminders to ensure you don’t forget a due date.
It may be necessary to cut down on your spending. However, you should avoid having a credit card balance. This will help keep your utilization low and improve your credit score.
For many reasons, paying down your balance should be a priority. Unwanted interest charges can also be a significant obstacle to financial wellness.
Simply put, you should be able to use your credit card in the way it was intended. This means paying for purchases, making timely payments, and not falling into debt.
You should notice a rise in credit scores. Keep in mind that mistakes and late payments can affect your credit score.
What to do if you are denied a job
You won’t be left wondering “Why,” as the issuers must legally send you an adverse actions notice explaining the reason you were denied.
These are common reasons to deny reality and what you can do to change them.
Too much debt
means that your balances are too high. To reduce your debt, set a budget and make sure you pay more each month than the minimum.
You have a limited credit history.
Wait for a few months before applying for a secured credit card for credit building. Your score will improve within months if you make on-time payments.
Next time you have a low income, consider a card that’s not premium but still has the features you need.
Too many applications.
Take a break from applying to cards for several months and instead focus on improving your credit score with credit-builder loans.
Anyone under 21 years old must have an independent source of income to obtain a card. However, you can still be an authorized user and build credit.
Negative credit information.
Late payments and judgments (e.g., bankruptcies) can take time to be removed from your credit reports. Pay on time and in full of moving forward.
Score too low.
If your issue is a credit score, credit-builder loans can be offered by your credit union. About one out of five credit unions offer credit-builder loans.
Bad credit: Secured vs. Unsecured credit cards
When looking for a bad credit card, you should consider two types of cards: secured and unsecured cards. Both are useful tools in credit-rebuilding efforts.
Secured credit cards
Secured cards will require a refundable deposit that is usually equal to your credit limit. After 6-12 months of regular payments on most cards, you will be able to withdraw your deposit and move to a traditional (unsecured) credit card with a higher limit.
Secured credit cards
Unsecured credit cards, as their name suggests, offer an “unsecured” line credit. You don’t need to make a security deposit to borrow money.
You are given a credit limit and can borrow as much as that amount based on your creditworthiness. A high credit limit can help improve your credit score and credit utilization.
Research methodology: How did we get to our top picks?
To identify the best products in this category, we evaluated 269 credit cards for poor credit. We considered the following core criteria in our analysis:
Fees and costs:
Credit cards for people with bad credit often have upfront costs. These include security deposits and annual fees. Hidden fees may also apply for replacement cards or additional services. Cards with lower or limited fees were given more weight.
Bad credit credit cards often have higher interest rates because applicants are more likely to risk credit. We still assessed whether the APRs of a card was reasonable for this category and how they compare to the industry average.
While a low credit score will not allow you to get the best rewards, many options can help you earn money on your spending. If you are afraid of being tempted to spend more than you should, you might want to avoid rewards cards.
Some cards provide additional benefits such as the ability to increase credit limits, tools to track credit scores, security, reporting to major credit bureaus, and other added security features. These benefits can help you improve your credit score.