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The Best Unsecured Credit Card Options for Poor Credit 

Hoping to rebuild your credit score but not sure where to start? While credit card options for people with poor credit, bad credit, or no credit might be limited, there are still great offers available – both secured and unsecured.

What Is a Poor Credit Score? 

So, what exactly is a poor or bad credit score? A bad credit score is typically any credit score of 579 or below. Poor credit scores are much lower than the national average and usually mean those with bad scores are denied most credit cards for which they apply. Those with bad or poor credit usually have very limited credit options and must either enlist the help of a cosigner or get a secured card, which requires a security deposit.

Should You Get a Secured Credit Card? 

Secured credit cards are the most common way to rebuild credit. Secured cards operate like unsecured credit cards but are “secured” with a deposit. This security deposit, which is placed into an account linked with the card, also acts as the credit limit. If you make your payments on time, your deposit is safe, but if you miss payments, your lender may recoup their losses by taking your deposit and closing the account.  Almost every credit card issuer reports to the three major credit bureaus: Equifax, Experian, and TransUnion. This means if you make your payments on time and use your credit responsibly, you can quickly build up your credit score and advance up the credit card ladder to more lucrative rewards and cash back credit cards down the line.

When Does It Make Sense to Apply for an Unsecured Credit Card? 

If you have a poor credit score, your best bet may be to try applying for a secured credit card. What happens, however, if you can’t? While secured credit cards make the most sense, they may not be an option for some people. Perhaps, for example, your personal finances simply won’t allow for a security deposit. Since many secured cards require a minimum deposit of $200 to $300 (though some rise as high as $500), they might rule out some potential applicants – especially those with already tight finances.  In situations like these, unsecured credit cards for poor credit make perfect sense. Unsecured, credit rebuilding cards, like the Indigo Platinum Mastercard or the Milestone Gold Mastercard, make perfect sense – and are an excellent option – for individuals looking to rebuild their credit without the need for a security deposit. The Indigo Card has long been recognized as one of the premier credit cards for those with less than perfect credit and offers a demonstrated path to credit repair for thousands of Americans. The Indigo credit card offers manageable spending limits and 24/7 account management. While the spending limits with the card never increase (if, for example, you receive a $300 credit limit, that will stay your credit limit for the length of your membership), this is a card that provides the foundation for a brighter credit future. Like the Indigo Card, the Milestone Gold Mastercard is another credit card ideal if you are hoping to boost your credit score but don’t want to pay a security deposit. Just like with Indigo, the application process with Milestone is both fast and easy. And like the Indigo, the credit limits with the Milestone certainly won’t match something like the American Express Gold Card, but then again, that shouldn’t be expected.

The Benefits of Unsecured Credit Cards for Poor Credit 

Credit cards for bad credit, such as the Indigo Credit Card, the Milestone Card, and even the Horizon Gold Card, are more than credit cards; they are tools for rebuilding damaged credit. Rebuilding credit requires time, patience, and financial responsibility. Cards, like the three mentioned above, provide the tools needed to rebuild credit scores. Smaller credit limits allow cardholders to learn financially respirable credit practices, such as only using what they can afford to pay back, financial planning, and keeping credit utilization to a minimum.  Credit utilization means the percentage of your available credit that you use. If, for example, you have a $1,000 credit limit, spending $300 each billing period would be a credit utilization rate of 30%. You should try to keep your credit utilization below 30%, though keeping it below 10% is ideal. Credit cards with low credit limits, such as the Horizon Card, the Indigo Card, or the Milestone Card, assist in the credit rebuilding process by training you to use your credit sparingly, thus establishing and reinforcing the best credit practices.  Unsecured credit cards for bad credit are also a great way to break out from the secured card bubble and practice good financial habits without the safety net of a security deposit. Secured cards are great, but once you rebuild your credit, you likely will be looking to apply for rewards cards that offer generous perks. The Indigo credit card (or even the Milestone credit card) is an effective way to practice the techniques learned through secured cards – just without the training wheels a security deposit provides.

Things to Consider Before Applying for a Credit Card 

Before you apply for an unsecured credit card for people with bad credit, always make sure to do your homework first. Unsecured cards, like the Indigo Platinum Card or the Milestone Gold Card, usually charge an annual fee instead of a security deposit. The annual fee for both cards varies, depending on the credit limit provided, but is usually between $35 to $99 per year, though the typical annual fee with both cards is around $59.  An annual fee of $59 may seem steep, but if you don’t have the choice of keeping $300 tied to an account for a security deposit, $59 paid over 12 months equals less than $5 per month, which is much more reasonable. If you don’t want to pay an annual fee and don’t have the cash flow needed to place a deposit on a secured card, the Horizon Gold Card is a great option to consider. The card offers a generous $500 credit limit, which is only spendable at the Horizon Outlet. The card requires a $5 verification fee, but features no APR on purchases, meaning holders can use the card to shop with Horizon and make the minimum payment without fear of racking up interest charges.

Find the Best Credit Card for Rebuilding Your Credit Today 

No matter what your past credit history or credit score, there’s a credit card available out there with something to offer everyone. Knowing what the best cards are, however, can be tough. Fortunately, at BestCards.com, our team of experts dives deep into the world of credit cards, bringing you the best card options for every credit score. If you want to rebuild your credit, we have the resources you need: Comprehensive and impartial reviewsinformative blogs, and analysis of the latest news and trends – all designed to give you the clearest picture possible. So, what are you waiting for? Check out some of our in-depth reviews and find your next credit card today.

About: Cory

Cory is BestCards.com's resident rewards expert, covering all facets of the points game – especially travel, hotels, and airlines. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.