With poor credit, you might get a credit card, but it won’t be one of those cards that you see advertised with rich rewards or exclusive benefits. It will be a fairly simple card instead. That’s good. You will not depend on this card forever. The principle is to use it to build your loan or repair it, then move on to a better product.
We assume secured cards are the best credit cards for poor credit. You have a security deposit with these cards, covering the issuer in the event that you don’t pay. (You can get your deposit back when you close or upgrade the account.) The deposit reduces the risk and some of the best cards to get are protected cards. Approval is not guaranteed, because you do need to demonstrate that you have sales, and bankruptcies or other significant credit report issues will cause you to be rejected. Find out more about safe cards.
What else other than credit cards?
Other alternatives include poor credit unsecured cards, which do not require a deposit but appear to charge elevated fees that add up to more than the average deposit on a secured card over time. It may also be easier to get store credit cards, but usually they have low credit limits and high interest rates, so proceed with caution. Below are our suggestions for the best bad credit credit cards, followed by some support for those with bad credit, and we recommend you avoid some cards.
How to tell if you need for bad credit
You’re effectively asking the card issuer to lend you money without any assurance (besides your promise) that you can pay it back when you apply for a standard credit card. There is no collateral backing up the deal, unlike a mortgage or car loan. The issuer finds the risk to be too high if an applicant does not have a good credit score, and that is why it refuses the application.
However, bad credit credit cards have features that reduce the risk to card issuers, so that more individuals can be accepted. The credit card application process for bad credit is “more forgiving” than for standard credit cards. Poor credit credit cards may be a good fit for you if:
It’s below 630 your score
In general, bad credit or poor credit is considered to be a credit score below 630 (range 300-850). You can get it for free via NerdWallet if you do not know your credit score. Get your credit score for free here. If you have a bad score, one of the best strategies for restoring your reputation is a credit card specifically tailored for individuals in your situation.
You have no credit history (or very little)
The word “poor credit” is generally associated with irregularities, such as missing payments or turning over accounts to collection agencies. But individuals with a thin credit history or no credit history at all may still benefit from a bad credit credit card because they, too, are considered risky borrowers.
What does bad credit cause?
Several considerations go into credit scores. For example, applying for a new credit card will momentarily knock a few points off anyone’s score because it implies a need for more financial support. Some are relatively small. Others are more serious. Credit ratings may be greatly affected by bankruptcy, charge-offs or missed payments.
Variables for credit
The key variables in your credit score are here and how they can add up to bad credit:
History of payments. This is your score’s single biggest factor. Do you pay the bills on time? Paying a bill a few days late can not impact your credit score at all (although you might get hit with a late fee). But if a bill is more than 30 days late, expect it to appear and impact your score on your credit report. A big dent in your ranking can be made by even a single late payment. The damage decreases over time, but it gets even worse if you’re repeatedly missing payments.
Amounts owed by you. Your total debt load matters, but scoring systems pay careful attention to the use of credit, the amount of your credit limit you use. The closest somebody is to “maxing out” a credit line, the more likely they are to be in a poor financial situation. It’s not going to raise a lot of red flags with a $190 balance on a card with a $2,000 limit, but a $190 balance on a $200 credit line means someone is stretching the limits of their means.
Other credit card variables
Credit history length. That can be expressed in low scores if you haven’t had credit for a very long time. Closing old accounts that they don’t use is a common mistake people make, which affects this portion of their ranking. From a scoring perspective, a 10-year-old credit card account is important, even if the card is just sitting in a box. Leave it open and use it once a year if it does not have an annual charge, so the issuer doesn’t shut it down for inactivity.
Credit Forms. Rating formulas like seeing a combination of accounts of various kinds, credit cards, loans, etc. You have to start somewhere, obviously, but it’s best not to let your entire credit history be a single account.
Applications for new credit. Expect any application to momentarily knock a few points off your ranking. If you apply for several cards at once, however, the effect is compounded. This is because it may mean that someone is desperate for money. This is why when you have a reasonable chance of acceptance, it is important to “call your shots” and apply only for cards.
What is the simplest cards for which to get approved?
Approval is never guaranteed for any credit card. In addition to your credit background, your revenue and other variables are looked at by issuers. Nonetheless, some cards have requirements that are not as hard to follow as others.
The lower the risk to the issuer of the credit card, the simpler it is to get accepted. This is why secured credit cards are a recommended starting point for individuals who work to construct or restore credit. These cards require you to deposit a cash security deposit that the issuer keeps as collateral if your bill is not paid. Furthermore, which you get back when you close or upgrade your account. The deposit reduces the risk, so more individuals will make these cards available to issuers. The cards on this page are all cards that are covered.
In general, shop credit cards are much simpler to qualify for than bank cards. They appear to have low credit limits and high interest rates. When you keep your balances low compared to the cap and pay them off each month, they are a viable credit-building tool.
Summary of unsecured cards
In general, unsecured cards for poor credit are not recommended by us. One that does not require a security deposit is an unsecured card. All credit cards “regular” are unsecured. But because of high fees and vague terms. Unsecured cards sold to people with poor credit are infamous. In addition, issuers of such cards typically do not have good cards to upgrade to. This means you’re stuck with either holding open a high-fee card (which costs you cash) or closing it (which could hurt your credit score). Most of the options are unsecured in our “Credit Cards to Stop” section below.
Look at credit cards for fair credit if you’ve started building credit and have a score in the mid-600s. These offer further advantages, but they do not need a top-tier credit score. For fair credit, check out our best credit cards.
The cost of weak credit
One thing is supposed to calculate credit scores: how much of a risk it is to lend money to another. The lower the risk that is perceived, the greater the ranking. Your options for borrowing money are restricted by getting bad credit: You can pay higher interest if you can get a loan at all.
Other costs are there, too. Credit scores have come to be viewed as a general indicator of reliability, even though they are not structured as such. They are used by employers, tenants, insurers, mobile phone providers, utilities firms and others to test clients or candidates.
A NerdWallet survey showed that these results are unknown to many individuals. Significant numbers of Americans did not know that bad credit might prevent them from renting an apartment (23%), increasing their car insurance costs (43%), restricting their mobile phone service choices (49%) or requiring them to pay security deposits for utility service (52 percent ). In addition, 1 out of 5 respondents thought that a score of 600, which is bad credit, was adequate to apply for any credit card.
If you have poor credit or no credit, the best and safest way to create credit is usually with a card tailored especially for someone like you.
Choosing a poor credit card
Poor credit credit cards usually come with low credit limits and high rates of interest. For now, that’s OK, because these cards’ primary aim is to help you create credit or restore credit. When selecting a card, concentrate on:
Reporting to lending offices. Only if it records your payments to the organisations that assemble the credit reports that are the foundation of credit scores can a card help you create credit. Look for a card to all three major credit bureaus that reports. Notice that since they don’t require spending money, prepaid cards do not report to the credit bureaus.
Low costs. Unsecured poor credit credit cards also boast that you can apply with no deposit on them. But then they reach you with annual fees that can easily exceed $100 a year, repair fees and other credit card fees. There is either no annual fee or a very small one for decent secured credit cards and no hidden charges. You pay a fee, however the money can be returned to you.
Credit Score Free. Look for an issuer that provides your score with free access so that you can monitor your progress. The issuer will also preferably provide other services, such as debt-payment calculators and free programmes for financial education.
A road for upgrading. It’s good to be able to change your account to a card with better terms until your credit improves. Will the issuer move you to a normal unsecured card if you have a secured card? Can you step up to a version with no fees or one that provides incentives if you have an unsecured card for bad credit?
Rewards and upgrading
26.99% Variable APR
Rec Credit Score
Unlike a prepaid card, the 3 key credit bureaus are routinely reported to
Accepted globally at millions of locations
Make the minimum security deposit required and you’ll get a $200 initial credit line. Plus, deposit more cash to get a bigger credit line before your account opens.
Your $49, $99, or $200 refundable security deposit includes access to an approved bank account.
In as little as 6 months, with no additional deposit required, a higher credit line is automatically considered.
We can monitor your account and you will be able to gain your deposit back as a statement credit when you use it wisely by doing things like making on-time payments.
You can conveniently access your account online, by phone or using our mobile app 24/7.
Usually, most secured cards require you to make a deposit equal to your credit line, and you must come up with the entire deposit up front. However, with the Protected Mastercard® from Capital One, you will get a $200 credit limit on a $49, $99 or $200 deposit. Your deposit can also be made in instalments. And in as little as six months, you will be automatically considered for a higher credit limit without additional deposit.
People with seriously impaired reputation do not apply, such as a bankruptcy on their credit report. You must have an account with checks or savings.
No credit check
No hard credit inquiry
Lowest interest rate
Rec Credit Score
No required credit history or minimum credit score for approval
Full-Feature Platinum Mastercard® Secured Credit Card Fast and Full Online Application Good for Car Rental, Hotels; Credit cards are accepted anywhere!
Monthly reporting to all 3 major credit bureaus to set up a credit history credit line backed by your $200 Fully-Refundable Deposit — $2,000 Presented with the Request
Only pay off your balance and get back your deposit at any time.
Mobile Access to Your Account 24/7
You must be a resident of a US state, but the service is not currently available in Arkansas, Iowa, New York, or Wisconsin.
Apply to your credit score in just a few moments with no adverse effect; there will be no credit inquiry reported in your credit bureau file
Credit cards tend to carry extremely high interest rates for persons with poor credit, often 25 per cent or more. However, the First Progress Platinum Prestige Mastercard® Secured Credit Card provides a rate lower than what you would find for people with decent or excellent credit on many items. With no hard credit investigation, you can apply, an advantage for people with lower scores, where every point counts.
For protected cards, the annual charge of $49 is on the high hand. (Consider the First Progress Platinum Elite Mastercard® Protected Credit Card with a lower fee but a higher APR.)