Last updated on April 26th, 2022
Having bad credit disqualifies many people from such significant events as getting a mortgage or even finding their dream apartment. Fortunately, having bad credit doesn’t mean you can’t qualify for loans or credit cards to repair your damaged credit score. So, what credit cards can you get with bad credit?
Secured Credit Cards for Bad Credit Scores
Credit cards for bad credit break down into two distinct categories: unsecured cards and secured cards. Secured credit cards are the most accessible type of credit card to get because they require a security deposit and often do not require a credit check.
This security deposit requirement is what makes these cards “secure.” Applicants apply with a cash deposit (usually a minimum of $200 to $300), and the lender then opens the card account. The security deposit acts as both collateral and the credit limit. This means the more money you deposit, the higher your credit limit.
Why Use a Secured Card?
Secured cards are great for repairing credit. Since they are easy to obtain, they offer a simple way to increase the amount of available credit you have. Most secured cards also don’t conduct a hard inquiry when you apply. These two factors can help you quickly raise your credit score by several points.
What Are the Best Secured Credit Cards for Bad Credit?
Choosing a secured credit card is an excellent option for people with bad credit. Many secured cards offer a lifeline to those with a history of late, or missed, payments, bankruptcies, repossessions, or other financial mishaps.
Here are some of the most popular secured cards for people with bad credit (or no credit):
The OpenSky® Secured Visa® is one of the most popular secured cards due to its easy application process. Besides no credit check, the card features a low, $35 annual fee, a wealth of credit repair information through its Knowledge Center, and an adjustable credit line.
First Progress is another popular issuer that specializes in secured cards. The lender offers three cards aimed at different types of credit card users. These cards offer different APRs and annual fees. The First Progress Platinum Prestige, for example, offers a low 9.99% APR and $49 annual fee. The low rate makes it perfect for anyone planning to carry a balance.
The Platinum Elite is geared towards those new to credit, featuring a 19.99% APR and a low $29 annual fee. The Platinum Select is the mid-range card, with a 13.99% APR and a $39 annual fee. This middle card is perfect for those who want the versatility to carry a balance, but not the higher yearly fee.
Both cards come with a highly-competitive APR on purchases. The Platinum card, for example, features an impressive 9.99% APR on purchases for a $49 annual fee, while the Gold Card features an equally competitive APR of 13.99%, with a lower, $39 annual fee.
Self is a unique product in that it is really two credit builder products in one. While the card isn’t available for direct applications, opening a Self Credit Builder Account and making on-time payments will guarantee you the credit building secured card – and the purchasing power of the Visa network.
After opening a Self Credit Builder Account, the individual simply needs to make their payments as scheduled. Once their account reaches $100, they can fund a Self Visa® Credit Card. There are no credit checks, and since the user has two Self accounts open, they build their credit score in double the time!
Other Options to Consider
Other popular secured cards include the Discover It Secured (which earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter), Applied Bank’s Applied Bank Secured Visa® Gold Preferred® Card, the PCB Secured Visa, the Secured Mastercard from Capital One, and the Citi® Secured Mastercard®.
For those seeking a 0% introductory APR, the Assent Platinum 0% Intro Rate Mastercard® Secured Credit Card comes with zero interest for the first six months on purchases – and a great low APR of 12.99% after that.
Related Article: Can You Raise Your Credit Score 100 Points In a Month?
Unsecured Credit Cards for Bad Credit Scores
The other type of credit card for bad credit is an unsecured card. Unsecured credit cards differ from secured cards in that they don’t require a security deposit. An unsecured card is what people most associate with a traditional credit card. You apply, and if approved, your bank grants you a credit line you can use to make purchases.
Because these cards don’t require a deposit, they will result in a hard inquiry when you apply. This means applying for a card like this can impact your credit score – albeit not significantly. Additionally, these cards are typically more challenging to get than secured cards, meaning the bank might reject your application if you do not meet their requirements.
Why Choose an Unsecured Card?
While unsecured credit cards pose a higher risk of rejection, they still offer many practical benefits compared to secured cards. These include no security deposit and the chance of a credit line increase after demonstrating financial responsibility over time.
What Are the Best Unsecured Cards for Bad Credit?
Unsecured cards for bad credit break down into two distinct categories themselves: “guaranteed approval” credit cards and credit repair cards.
Guaranteed Approval Credit Cards
While “guaranteed approval” isn’t 100% accurate, these cards are much easier to get than many other credit repair cards on the market. The two best examples of these easy-to-get cards are the Principal Platinum and the Group One Platinum Card. Both cards offer a $750 unsecured line of credit cardholders can use at the Horizon Outlet. The outlet is an online marketplace that features thousands of products, like Amazon.
Current Horizon Services Merchandise Cards
The Unique Platinum Card comes with an initial credit line of $1,000. This is $250 more than what Horizon offers. Additionally, the card’s store – My Unique Outlet – has a massive selection of name-brand electronics, fragrances, and supplies for the home and kitchen. And like other catalog cards, applicants for the Unique Card won’t be turned away for bad credit or no credit.
Buy On Trust is a pay-over-time credit account that lets consumers shop the biggest names in electronics from leading electronics vendor, Best Buy. They can buy now and pay later – with no credit needed.
Why Choose a Merchandise or Catalog Card?
The benefit of cards like the Horizon cards or others, like Unique or Buy on Trust, is that they regularly report to one of the three major credit bureaus: Experian, Equifax, and TransUnion. Make your payments on time each month, and your bad credit score can quickly climb.
Credit Repair Credit Cards
The other type of credit card for bad credit is credit repair credit cards. These cards are specially designed for people with bad credit, fair credit, or even no credit history. These cards offer the chance at a credit limit increase after several months of on-time payments.
The Milestone Gold Mastercard and Indigo Platinum Mastercard are two other examples of credit cards for bad credit. Both cards offer a fixed-rate APR, meaning cardholders won’t have to worry about the interest rate changing multiple times. Other popular options come from lenders like Credit One and the Mercury Mastercard.
Bad credit doesn’t mean you can’t get credit. A subprime credit score means you need to work on repairing your credit with the right credit cards. Using the options above can help you quickly repair your credit if you follow the correct advice. This advice includes:
- Always paying your bills on time
- Keeping your credit usage below 30%
- Using your credit cards to make small purchases
Thanks to monthly reporting by the major credit bureaus, once your credit improves, you’ll qualify for better credit card offers, a higher credit line, better loan rates, and even mortgages.
Related Article: What Are the Easiest Credit Cards for Bad Credit to Get?