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Do You Need a Secured Credit Card If You Have a Bad Credit Score?

Secured credit cards play an essential role in building credit. Secured cards work by requiring a cash deposit, which acts as both the credit line and security in case of late payments. This deposit makes them easier to get for those with bad credit scores. For some, however, raising the money for a deposit is unaffordable. Is there another option? Do you need a secured credit card if you have bad credit?

The answer to this question is an emphatic no. There is a wide selection of unsecured credit cards available to those with no credit history or a bad credit score they want to repair. Credit cards available to those with lower credit scores are known as subprime credit cards.

Credit Cards for Bad Credit

Subprime cards typically offer lower credit limits and a fixed APR. Fortunately, they don’t require a deposit. They do, however, usually have an annual fee. For many, this is a fair price to pay for access to a tool that can quickly rebuild credit.

One of the more popular examples of a credit card for poor credit is the Milestone® Gold Mastercard®. The card offers the chance to build credit while also providing the benefits of a Mastercard product. The card reports to the three major credit reporting bureaus, so paying in-full each month can significantly boost a person’s score in as little as six months.

Milestone® Gold Mastercard®

No Credit Score Impact When You Apply

Milestone® Gold Mastercard®
  • Regular Purchase APR 24.9%
  • Cash Advance APR 29.9%
  • Annual Fee $35 to $99
  • Credit Needed Poor
  • Processing Network Mastercard
Best Benefits
  • Choose your custom card design
  • Free 24/7 online account access
  • Quick pre-qualification with no impact to credit score
  • Mastercard® Gold Benefits
Rates & Fees
  • Regular Purchase APR: 24.9%
  • Cash Advance APR: 29.9%
  • Cash Advance Transaction Fee: $0 during the first year; after first year, either $5 or 5% of the amount of transaction
  • Penalty APR: 29.9%
  • Annual Fee: $35 to $99
  • Foreign Transaction Fee: 1% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $40
  • Return Payment Penalty Fee: Up to $40
  • Over Limit Penalty Fee: Up to $40

The Indigo® Platinum Mastercard® is another option that attracts a lot of attention from those with poor credit scores. The card features the same fixed-rate APR as the Milestone, plus the same Mastercard benefits and global acceptance. Unlike the Milestone, however, Indigo allows cardholders to choose from several eye-catching card designs – giving cardholders the ability to build credit and express their personality at the same time.

Indigo® Platinum Mastercard®

Choose Your Own Card Design

Indigo® Platinum Mastercard®
  • Regular Purchase APR 24.9%
  • Cash Advance APR 29.9%
  • Annual Fee $0 to $99 depending on the card issued
  • Credit Needed Poor
  • Processing Network Mastercard
Best Benefits
  • Great for demonstrating responsible use of credit
  • Short and easy-to-complete pre-qualification form
  • 24/7 mobile account access
  • Choose your card design free of charge
Rates & Fees
  • Regular Purchase APR: 24.9%
  • Cash Advance APR: 29.9%
  • Cash Advance Transaction Fee: $0 during the first year; after first year, either $5 or 5% of the amount of transaction
  • Penalty APR: 29.9%
  • Annual Fee: $0 to $99 depending on the card issued
  • Foreign Transaction Fee: 1% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $40
  • Return Payment Penalty Fee: Up to $40
  • Over Limit Penalty Fee: Up to $40

Credit Cards for No Credit

There are also several unsecured card options for people with no credit history. These cards differ from the Indigo and Milestone in that they don’t partner with a payment network like Mastercard. Instead, these cards offer a credit line of $500 to shopping outlets.

One such example of this type of card is the Horizon Gold Card. The card offers a $500 limit, which applies towards the Horizon Outlet. That online store features a massive selection of products, including clothing, gifts, sporting goods, and more. The variety of items available means the card isn’t just for building credit – it also offers access to great deals.

But building credit is something that the Horizon Gold Card, and its sister Group One Platinum Card, do very well. Both cards report activity to a major credit bureau (from Equifax, Experian, and TransUnion), meaning even those with no credit at all can quickly build a positive credit history. That, in turn, can mean better credit card offers in the future.

Other benefits of these types of cards include:

  • No employment checks
  • Fast and easy application processes
  • Decisions within minutes
  • No purchase APR

Horizon Gold Card

No Credit Required

Horizon Gold Card
  • Annual Fee None
  • Credit Needed No Credit Required
Best Benefits
  • 0% purchase APR
  • No credit check required
  • Fast online application
  • Includes access to My Privacy Protection, My Universal RX, My Roadside Protect and My Legal Assistance benefits
Rates & Fees
  • Late Payment Penalty Fee: $20
  • Return Payment Penalty Fee: $25

Group One Platinum Card

No Credit Required

Group One Platinum Card
  • Annual Fee None
  • Credit Needed Poor , No Credit Required
Best Benefits
  • $500 credit limit
  • No employment or credit check to apply
  • Reports activity to major credit bureau
  • Fast and easy application
Rates & Fees
  • Late Payment Penalty Fee: $20
  • Return Payment Penalty Fee: $25

Secured Credit Cards Still Offer Value

For those unsure if they want to leap to an unsecured credit card, secured credit cards provide the basis for learning to effectively use a credit card with a safety net. Secured cards allow cardholders to practice keeping their credit utilization low and get in the habit of paying their balance in full every month. These two habits are a sure-fire way to improve your credit score.

There are a considerable number of secured cards on the market, from major issuers like Capital One and Discover, all the way down to your local credit union. Some, like the Discover It Secured Card, even offer rewards. But while secured cards are easier to get, that doesn’t mean everyone will be approved.

Being declined for a secured credit card can be tough for a person’s self-confidence. And when you are struggling to repair your credit, positivity is key. Fortunately, there are secured cards that don’t require credit checks. One such example is the OpenSky® Secured Visa® Credit Card.

The OpenSky card offers the purchasing power of a Visa credit card, plus a moderate annual fee. Many secured cards charge annual fees, with some rising as high as $100. With the OpenSky Card, this fee is $35, which is very reasonable. Plus, with minimum deposits of only $200, it’s an affordable option.

One of the top highlights of the OpenSky Secured Visa, however, is the fact that there is no minimum credit required. That means this is a solid option to consider for those who are both building and rebuilding their credit. Decisions arrive in minutes, with high approval rates. And the issuer reports card activity to the major credit bureaus, providing an avenue for increasing one’s credit score and reputation.

OpenSky® Secured Visa®

No Credit Check to Apply

OpenSky® Secured Visa®
  • Regular Purchase APR 17.39% variable based on the Prime Rate
  • Cash Advance APR 17.39% variable based on the Prime Rate
  • Annual Fee $35
  • Credit Needed Poor , No Credit Required
  • Processing Network Visa
Best Benefits
  • Build credit with on-time payments
  • Reports to the three leading credit bureaus
  • Credit limist between $200 and $3,000
  • Visa benefits and protections
Rates & Fees
  • Regular Purchase APR: 17.39% variable based on the Prime Rate
  • Cash Advance APR: 17.39% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $6 or 5% of the amount of each cash advance, whichever is greater.
  • Annual Fee: $35
  • Foreign Transaction Fee: 3% of each transaction in U.S. dollars
  • Late Payment Penalty Fee: Up to $38
  • Return Payment Penalty Fee: Up to $25
  • Minimum Deposit Required: $200
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Secured Cards Aren’t Just for Bad Credit

Secured cards like the OpenSky make great sense for those looking to boost their credit score quickly. This applies to those with fair or good credit scores, as well. Using the card to make a large deposit, you can instantly raise your credit limits as high as $3,000. Combined with the lack of a hard inquiry, it can push a cardholder’s score up quickly – potentially helping them get better rates on future auto loans, mortgages, or personal loans. They may even be able to get their dream rewards credit card.

Related Article: Is It a Good Time to Apply for a Travel Credit Card?

About: Cory
Cory Santos

Cory is BestCards.com's "Jack of all trades" and 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.