How to Choose a Subprime Credit Card

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Last updated on August 24th, 2023

Subprime generally credit refers to any FICO credit score below 680. In other words, subprime means fair and/or bad credit. Having a subprime credit can disqualify you from getting approval for mortgages, some auto loans, low interest rates, and other credit products. Fortunately, subprime credit cards are ideal for repairing bad credit and opening up new financial doors in the future. Thinking about getting a subprime credit card? Here’s how to decide which is a better choice for you: secured or unsecured.

Who Should Consider Applying for a Secured Credit Card?

Secured credit cards are one of the best options for those seeking to repair their bad credit. Secured cards offer several benefits versus an unsecured credit card for rebuilding your credit:

  • Because secured cards have a security deposit requirement, your credit line matches your deposit. This deposit protects you from going into further debt by limiting your costs should you default.
  • It provides subprime borrowers with a reasonable credit limit so you can make small purchases responsibly.
  • It features a lower credit limit than most unsecured subprime credit cards for subprime credit scores.
  • Secured cards feature lower fees than many unsecured cards for the same credit profile.

Secured cards are ideal for those who are serious about fixing their credit and want a quality credit product to raise their score. Cards, like the First Progress Platinum Prestige Mastercard®, Discover It Secured credit card,  and the Applied Bank Secured Visa® Gold Preferred®, provide an excellent balance of an unbeatable, low APR on purchases, and a reasonable annual fee. These options might not offer rewards points – but they are the ideal platform to repair credit.

Cards that require a security deposit are best served for making small purchases. This process keeps your credit use below the recommended 30%, which industry experts agree is key to raising your credit score. That’s not to say, however, that there are no secured cards built to handle larger purchases.

The Assent Platinum 0% Intro Rate Mastercard® offers a 0% intro APR on purchases for the first six months – something uncommon for other comparable cards. This half-year of no interest makes the card ideal for anyone planning a purchase they need to pay off in installments over the first six months. Even better, the standard APR, once the six months end, is extremely competitive.

Related Article: What are the best secured cards of 2020?

Who Should Consider an Unsecured Credit Card?

As noted, credit cards for bad credit that don’t require a security deposit are also known as subprime credit cards. These unsecured cards are designed to help those with bad credit – or even fair credit scores – improve their score and graduate to better credit offers like mortgages, auto loans, and even other subprime credit cards.

Unsecured cards offer some added benefits versus secured cards:

  • The lack of a security deposit requirement makes unsecured cards an attractive option for those who can’t afford an expensive deposit.
  • Unsecured cards remove the safety net a secured card provides, allowing cardholders to demonstrate their financial responsibility by paying their bills on time.
  • With responsible credit use, cardholders may receive a credit limit increase from some issuers in as little as six months.
  • A variable APR means you may receive a lower interest rate once your credit score improves.

There are plenty of quality unsecured credit cards for people with bad credit. Cards, like the Indigo® Platinum Mastercard® or the Milestone® Gold Mastercard®, provide the perfect jumping-off point for credit repair. Both cards offer a competitive APR, regular reporting to the three major credit bureaus (Equifax, Experian, and TransUnion), and the full selection of Mastercard security protections, including:

  • Identity theft resolution services
  • Extended warranty coverage
  • Price protection
  • Mastercard Global Services
  • Mastercard Airport Concierge

Both cards also come with an annual fee that is comparable to secured cards – but without the deposit requirement.

Another excellent issuer of subprime credit cards is Credit One Bank. Credit One offers a variety of financial products tailored to a number of credit profiles, including unsecured cards for bad credit, cards for fair credit scores, and rewards cards for those with good or excellent credit.

What Do Secured Cards and Unsecured Cards Have in Common?

Secured credit cards and unsecured subprime credit cards for bad credit may seem quite different, but they do have some things in common:

Both unsecured cards for bad credit scores and secured cards help you establish a strong credit history with responsible use. Credit cards for poor credit won’t provide the best cash back bonuses, airline miles, or luxury perks – but that’s not their role. Instead, they give those with imperfect credit the chance to boost their credit score with on-time payments and low credit use.

Many secured cards and unsecured cards offer the chance to “graduate” to better credit offers. In the case of unsecured subprime credit cards like the Reflex Platinum Mastercard and Surge Platinum Mastercard, these improved offers are a higher credit limit. With secured cards – especially those from credit unions and the popular Discover It Secured, these improved offers are a returned security deposit and the issuance of an unsecured version of the same card.

Other similarities between secured and unsecured credit cards for credit repair include:

  • Both typically charge an annual fee.
  • They offer regular reporting to the major credit bureaus.

What Is the Best Credit Card for Repairing Credit?

The best credit card to fix your credit score depends entirely upon what you want. Both unsecured and secured cards grant a platform upon which to launch your credit repair journey. This journey requires responsible use, regular payments, and determination.

If you are looking for guaranteed approval credit cards with $1,000 to $10,000 limits for bad credit and no deposit, you’ll be disappointed. Subprime credit cards work best for those who are willing to work hard on fixing their credit. They provide reasonable credit limits, which may increase with time. Focus on the goal, and you’ll be surprised just how quickly your credit score can jump.

Related Article: How Long Does It Take to Repair Your Credit Score?

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About: Cory Santos
Cory Santos

Cory is the senior credit card editor at BestCards, specializing in everything credit card-related. He’s worked extensively with credit cards and other personal finance topics, including nearly five years at BestCards. Cory’s extensive knowledge is an essential part of the BestCards experience, helping readers to live their best financial lives with up-to-date insights and comprehensive coverage of all facets of the credit card space, including market trends, rewards guides, credit advice, and comprehensive credit card reviews.

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