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Top 5 Best Credit Cards For Bad Credit [PLUS Tips To Improve Your Score]

Top 5 Best Credit Cards For Bad Credit [PLUS Tips to Improve Your Score]

When it comes to excuses consumers give for their bad credit scores, banks and lenders have heard it all.

Maybe you lost your job and couldn’t pay your student loan for a few months. Or maybe you thought you had been given a reprieve but were too busy looking for a job to find out for sure.

You may have thought you paid your credit card bill, but it’s actually sitting on your kitchen counter, waiting for the mail.

Whatever the reason for your low credit score, one thing is certain – lenders don’t care.

In fact, banks and other lenders rely on your creditworthiness and other factors to determine whether they should approve you for a credit card or a loan – and that’s it. Your personal situation is never and shouldn’t be considered.

It would be wonderful if credit card companies understood that “life happens” and made special exceptions to help people, but this is not the world we live in. As most of us already know, this is usually not how credit works. Credit cards are supported by banks, and banks have rules for a reason.

Here’s the good news: credit cards can help you rebuild your credit, make money for every dollar you spend, make travel easier, and act as an emergency fund when you don’t have to pay a big last minute bill. This is true even if you have bad credit, although the range of credit cards you can qualify for may be a little limited.

Read on to learn more about the best bad credit credit cards, how they work, and how to get approved.

Best cards for bad credit this year

Before you stop building credit, it is a good idea to review all of the credit cards that are available to consumers who need help. Our list of the best credit cards for bad credit includes some of the top deals with the lowest fees and fair terms.

  • Total Visa®
  • Discover it® Secured
  • Credit One Bank® Visa® credit card
  • Secured Mastercard® from Capital One®
  • Milestone® Gold Mastercard®
  • Credit One Bank® Unsecured Visa® with Cash Back Rewards

# 1: Total Visa®

The Total Visa® is one of the easiest to approve credit cards on the market today and easy to use around the world as it is a true Visa credit card. However, this card comes with high rates and fees as it is available to consumers with poor credit ratings or limited credit ratings.

Your application will cost $ 89 to process. This is extremely high considering that most credit cards do not charge an application fee. You also pay an initial annual fee of $ 75 and an annual fee of $ 48 for each additional year.

Once signed up, you can choose your preferred card design and your credit card payments will be reported to all three credit bureaus – Experian, Equifax and TransUnion. This is the main benefit of this card as your on-time payments can easily help improve your credit score over time.

For the most part, the Total Visa® is best for consumers who don’t mind paying a few fees to get access to an unsecured line of credit. However, since this card does not give out any rewards, there are few cardholder benefits to look forward to.

  • APR: 35.99% APR
  • Fees: Registration fee and annual fee
  • Minimum score: Indefinite
  • reward: No.

# 2: Discover it® Secured

While secured cards do not offer an unsecured line of credit like unsecured credit cards, they are extremely easy to qualify. The Discover it® Secured may not be suitable for everyone, but it offers a simple online application process and the ability to get approved with little to no credit rating.

Note, however, that secured cards work differently than traditional credit cards. With a secured credit card, you must make a cash deposit in advance as security. However, you will get your cash back if you properly close your account.

Amazingly, with Discover it® Secured you can earn rewards with no annual fee. You start by making 2% on up to $ 1,000 you spend on food and gasoline each quarter. You also get an unlimited 1% discount on everything else you buy.

The Discover it® Secured does not charge a registration fee or annual fee, although you will need the cash for your first deposit in advance. For the most part, this card is best for consumers who have little or no credit and want to build their credit history while earning rewards.

  • APR: 24.74%
  • Fees: No annual or monthly fees
  • Minimum score: Indefinite
  • reward: Yes

# 3: Credit One Bank® Visa® credit card

The Credit One Bank® Visa® credit card is another bad credit credit card that you can use to earn rewards for your daily expenses. Get 1% cashback for every dollar you spend on this credit card. Since this is unsecured, you don’t have to make a cash deposit to get started.

Other perks include the fact that you can pre-qualify for this card online without a hard query on your credit report – and that you can get a free copy of your Experian credit score on your online account management page.

You may have to pay an annual fee of up to $ 95 for this card for the first year. However, it depends on your creditworthiness. After that, your annual fee can range from $ 0 to $ 99.

  • APR: 19.99% to 25.99%
  • Fees: Annual fee up to $ 95 for the first year, based on creditworthiness; then $ 0 to $ 99
  • Minimum score: Indefinite
  • reward: Yes

# 4: Secured Mastercard® from Capital One®

Capital One®’s Secured Mastercard® is another secured credit card that offers consumers a line of credit who can deposit a cash deposit as collateral. This card is aimed at people with bad credit or no credit rating. Hence it is easy to get a permit. One downside, however, is that your initial line of credit is likely only $ 200 – and that doesn’t give you much to work with.

On the other hand, this card does not charge any annual fee or registration fees. This makes it a great option when you don’t want to pay fees that you don’t get back.

You’ll also get 24/7 access to customer service, $ 0 fraud liability, and other cardholder benefits.

  • APR: 26.49%
  • Fees: No ongoing fees
  • Minimum score: Indefinite
  • reward: No.

# 5: Milestone® Gold Mastercard®

The Milestone® Gold Mastercard® is an unsecured credit card that you can use to pre-qualify online without checking your credit report. You will not receive rewards for your purchases, but you will receive benefits such as the ability to choose your card design, chip and pin technology, and easy online account access.

You have to pay a one-time fee of $ 25 to open your account. There is an annual fee of $ 50 for the first year and $ 99 for each year thereafter.

  • APR: 24.90%
  • Fees: Account opening fee and annual fees
  • Minimum score: Indefinite
  • reward: No.

# 6: Credit One Bank® Unsecured Visa® with Cash Back Rewards

With the unsecured Credit One Bank® Visa® with Cash Back Rewards, you receive a 1% discount on every purchase you make without restrictions or exclusions. There’s also no annual or registration fee, making this card a winner for consumers who don’t want to be burdened with high expenses.

As a cardholder, you get free access to your Experian credit score, no fraud liability, and access to a mobile app that makes it easy to keep track of your purchases and rewards. You can also pre-qualify online without a tough query on your credit report.

  • APR: 25.99%
  • Fees: No annual fee or registration fee
  • Minimum score: Indefinite
  • reward: Yes

The disadvantage of credit cards with bad credit

While your chances of getting approved for any of the bad credit credit cards listed above are high, you should be aware that there are many pitfalls to be aware of. Here are the main drawbacks you will find with these bad credit and other similar cards:

  • Higher fees: While someone with excellent credit can look for credit cards with no fees, if you have bad credit, they don’t. If your credit rating is bad or you have a thin credit profile, expect to pay higher fees and more of them.
  • Higher interest rates: While some credit cards carry 0% interest for a limited time or lower interest rates altogether, consumers with bad credit usually have to pay the highest interest rates available today. Some bad credit credit cards even have an annual interest rate of up to 35%.
  • No perks: Are you looking for benefits for cardholders such as cashback for purchases or points for airfares or cinema tickets? You have to wait for your credit score to go back to “good” or “good”. Even if you can find a card for bad credit applicants that offers cashback, your rewards may not offset the higher fees.
  • No balance transfers: If you’re looking for relief from other runaway credit card balances, look elsewhere. Bad credit credit cards usually do not offer credit transfers. If so, the conditions make them prohibitive.
  • Low credit limits: Bad credit credit cards typically have initial credit limits in the range of $ 300 to $ 500 with the ability to climb to $ 2,000 after a year of on-time monthly payments. If you have a lot more to borrow, you need to consider other options.
  • deposit required: For secured credit cards, you must make a cash deposit to secure your line of credit. This shouldn’t necessarily be a deal breaker – and it may be necessary if you can’t get approved for an unsecured credit card – but you do need to come up with a few hundred dollars before applying.
  • Check account request: Most new credit card accounts now require cardholders to pay bills online. This means that you will need a checking account. If you are largely unbanked, you may need to open a traditional bank account before you can apply.

Benefits of Improving Your Credit Score

People with bad credit often view their personal finances as a lost cause. The road to better credit can seem long and stressful. Sometimes it’s easier to give up than trying to fix credit mistakes you’ve made in the past.

However, there are some real benefits associated with having at least “good” credit, which usually means a FICO score of 670 or more. Here are some of the benefits that better credit can bring to your life and your lifestyle:

  • Higher credit limits: The higher your credit rating, the more money banks are usually willing to lend you. With good credit, you have a better chance of qualifying for a car loan, taking out a personal loan, or getting a credit card with a reasonable limit.
  • Lower interest rates: A higher credit score indicates to lenders that you are not as risky as a borrower – a sign that is usually reflected in lower interest rates. If you pay a lower APR on every loan, you can save a lot of money on interest over time.
  • Lower payments: When you borrow money at a lower interest rate, you usually get lower payments on all of your loans, including a home loan or a car loan.
  • Possibility to shop: If you are an ideal loan candidate, shop around for the best deals on credit cards, mortgages, personal loans, and more.
  • Ability to help others: If your child wants to buy a car but has no credit rating, you can support them with a better credit rating. When your credit is bad there is no one you can help with.
  • More options in life: Your creditworthiness can also affect your ability to open a bank account or rent a new home. Since employers may require a modified version of your credit report to be viewed before they hire you, excellent credit can beat other candidates for a job as well.

In addition to the benefits listed above, most insurance companies now consider your creditworthiness when applying for coverage. Because of this, life, auto, and home insurance rates tend to be lower for those with higher credit scores.

This may seem unfair, but you need to remember that research shows that people with high credit scores are less likely to make insurance claims.

How to improve your bankroll: slowly and steadily

When you have a low credit score there are two ways to deal with it. If you don’t care enough about the consequences of bad credit to do something about it, you can wait a decade for the bad marks to expire on your credit report. Depending on when your creditors give up and write off your debt, you might not even have to wait that long.

If you don’t like the idea of ​​running out of your balance while waiting, you can also try fixing your previous credit errors. This usually means paying off debts – and debt in arrears in particular – but it can also mean applying for new loan products aimed at those who need to fix their loans.

If you decide to take actionable steps to build credit quickly, the credit cards on this page may come in handy. They give you an opportunity to show the credit bureaus that you’ve changed your behavior.

Before taking any steps to improve your credit score, however, you should consider the various factors that were used to determine your reputation. The FICO scoring methodology takes the following factors into account when assigning your score:

  • Payments on time: Paying all bills, including credit cards, on time accounts for 35% of your FICO score. Because of this, it is imperative to pay all bills early or on time.
  • Remaining debts: How much you owe is important. This is why it helps your score to pay off your credit cards every month or as often as possible. According to myFICO.com, the amounts you owe in relation to your credit limits make up an additional 30% of your FICO score.
  • New loan: Applying for too many new cards or accounts at the same time can have a negative impact on your score. In fact, this determinant makes up another 10% of your FICO score.
  • Credit mix: A large number of open accounts impressed the Gods credit bureau’s algorithm. If you only have personal loans right now, the meddling of a credit card can help. If you already have four or five credit cards, it may be wise to back off a little.
  • Length of credit history: The length of your credit history also plays a role in your score. The longer your credit rating, the better off you are.

If you are looking to improve your credit score, consider all of the factors above and how you can modify your behavior to get higher scores in each category. It’s pretty easy to see how paying all bills early or on time and paying off debts can have a positive impact on your creditworthiness when you consider that those two factors alone make up 65% of your FICO score.

Also, if you want to keep track of your progress, check out an app like Credit Karma, one of my apps favourite Tools. This app allows you to monitor your credit progress over time and even get notifications when your score has changed. The best part is that it’s free.

Should You Use A Credit Card To Restore Your Credit?

If you are planning to buy a credit card for bad credit, the first thing you should think about is your goals. What exactly are you trying to achieve?

If you’re looking for purchasing power, the cards on this list likely won’t help. Some are secured cards, which means you need a cash deposit to place as collateral. Others offer low credit limits and high fees and interest rates, which make long-term use expensive.

If you really want to start over and fix credit mistakes made in the past, one of these cards might be just what you need. If you are determined to improve your score, they can speed things up.

You may end up paying higher fees and interest rates along the way. Note, however, that none of the cards on this list need to be your top card forever. Ideally, you would use a bad credit credit card to restore your balance and increase your score. Once you reach your destination, you can upgrade to a new card with better benefits and conditions.


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