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Updated: August 14, 2018
Credit cards designed for those with bad credit often come with different fees and requirements than cards that are created for those with good credit. The key is to choose one that best fits your current situation, as well as your future plans. In this article, our experts dive into the impact of bad credit, how you can improve your credit score, and Bankrate’s take on some of the best cards on the market today.
If you have a bad credit score there are still a ton of great credit card options for you. The credit card pros at Bankrate have studied over 260 credit cards for bad credit and they have applied our credit card scoring system to give each card a Bankrate score out of 100.
Using Bankrate’s scoring methodology our experts assess a ton of factors such as annual fees, APR rates, introductory bonuses, balance transfers, rewards value and how easy rewards are to redeem, travel perks, and any extras and discounts. If you have a bad or poor credit score we have focused on the attributes you might be most concerned about when selecting a new credit card.
Bad credit is typically defined as a credit score lower than 549. Major credit bureaus determine your credit score by measuring your ability to keep up with credit agreements such as credit card bills, loans, and utility bills.
A few different factors determine your credit score, such as:
It’s important to keep in mind that credit scores are flexible and can change often depending on your individual credit activity.
With time and smart decisions, you can improve your credit score and create a healthy financial environment.
Start by following these five tips for improving your bad credit score:
Secured credit cards require an initial deposit, which serves as a layer of protection for the card issuer in case you miss payments. The deposit you make often becomes your credit limit. But you may receive a credit line that is greater than the initial deposit. A secured credit card otherwise operates in a way that is similar to a regular, unsecured credit card. You’ll be able to purchase items with the card and then make payments. Interest is charged on balances carried month-to-month.
Unlike secured credit cards, unsecured credit cards don’t require a deposit. They allow you to buy items, charge them to the account, and then pay off the balance. However, unsecured credit cards for bad credit tend to include additional fees and higher-than-average interest rates.
Even if you have bad credit, credit cards aren’t necessarily off-limits. Consider these five tips for finding a card that fits your needs.
The Discover it secured is an excellent choice if you have a credit score that is lower than 600, and want to rebuild credit while earning rewards. After eight months, Discover will review your account monthly to see if you qualify for a security deposit refund. If you make consistent on-time payments, the issuer will let you know when you qualify for one of its unsecured cards.
Editor’s Take: The Discover it Secured earned the title of Bankrate’s favorite credit card for bad credit because it charges no annual fee while allowing consumers to be rewarded while they build or rebuild their credit. With the ability to graduate to an unsecured Discover card after eight months of good payment behavior, this card is an excellent choice for those with bad credit.
The Capital One Secured Mastercard is one of the only secured cards with a deposit requirement that could be lower than your limit. This card also comes with an option to pay the opening deposit in installments over an 80-day period.
Editor’s Take: The Capital One Secured Mastercard is a good choice for consumers that will only qualify for a secured card, but may not have the money to put down a full deposit. With the option to pay your initial deposits in installments and the potential to increase your credit line to $3,000 over time, this card is a solid choice for consumers with bad credit.
If you have zero credit history or just very little, the OpenSky Secured Visa Credit Card doesn’t care. In fact, they won’t do a credit check at all or even require you to have a checking account. This makes it one of the few cards to basically grant access to anyone who is willing to fork over a deposit. This can be a lifeline for someone in a credit jam who is trying to get a card.
Editor’s Take: For consumers looking for a credit card that they can get without having to submit to a credit check, this card could be a good choice. However, the OpenSky Secured Visa Credit Card offers few perks outside of its low variable APR.
If fast approval is the most important factor in selecting an unsecured card, then the Total VISA Unsecured Credit Card delivers. It clearly states on the card application page that even those with less-than-stellar credit are likely to get approved.
Editor’s Take: While the Total Visa Unsecured Card is our favorite card for no required deposit, this card doesn’t offer much beyond exorbitant fees and a high APR. For consumers with bad credit who are unable or unwilling to put a deposit down on a secured card, the Total Visa is an option.
|Card||Bankrate Score||Best For||Annual Fee|
|Discover it® Secured||95/100||Cash back||$0|
|Capital One® Secured Mastercard®||84/100||No annual fee||$0|
|OpenSky® Secured Visa® Credit Card||68/100||Low APR||$35|
|Total Visa® Unsecured Credit Card||55/100||Unsecured||$75 for the first year, then $48|
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