If you’ve got bad credit then finding a decent credit card deal can be a nightmare. Most lenders in the US provide terrible terms for those with bad credit and offer “special cards” that come with punitive interest rates and often include penalties and fees that could make a bad credit situation much worse. The trouble is that it’s hard to get by in modern life without a credit card. However, there is good news – not all credit cards for those with bad credit are awful deals and we’ve found some of the best for you. If you have a credit score below 640-660; you might want to check out these card providers:
Discover it® Secured Credit Card
The Discover it® card is a great deal. For a start there’s no annual fee so you won’t be paying just to maintain a card. There’s also a significant cash back offer that gives 2% back on spending up to $1,000, each quarter, on gas station and restaurant purchases and in addition you get 1% back on every purchase you make on anything else.
If you like to travel the card has no fees for foreign transactions which means you can save a small fortune overseas. Better still – there’s no late fee to be paid on the first late payment and they don’t bump up the APR for paying late. You should be aware that paying late will still have an impact on your credit score though.
Discover it® will report your credit behavior to all the major credit bureaus. That means if you use the card responsibly; your credit score will improve. There is a security deposit to get the card of a minimum of $200 and the exact amount depends on the balance you are offered. After a year of good behavior they will review the card account monthly and may refund the deposit to you.
Credit One Bank® Unsecured Visa ® Credit Card
If you don’t want to put down a deposit; you’ll need to look elsewhere and Credit One Bank’s card is a good alternative. Their online application procedure will let you know within 60 seconds as to whether or not you can be accepted for the card. Like the Discover it® card you can earn rewards on purchasing gas.
There’s no deposit so you won’t have to fork out any money to obtain the card though interest rates are, as you’d expect, a little higher. The company reports your activity monthly to the big 3 credit rating agencies and you can improve your overall credit score when you use the card responsibly. If you continue to make regular on time payments; you may be able to get a balance increase quite quickly with this card.
There’s a 1% cash back program for groceries and gas but not for any other purchases. You can also choose your payment date so that you don’t have to find money to pay until after you have been paid.
Open Sky® Secured Visa® Credit Card
The Open Sky® card is a good option for people with bad credit because there are no credit checks made when you apply but it still reports to the three credit bureaus. That means you are guaranteed to be accepted and can rebuild your credit rating once you have been.
There is an annual fee for the card though and at $35 it may not be the best value offering on the market. You should consider just how much of the balance this fee represents before making a decision. You can get a credit line of between $200 and $3000 on application. You are not required to have a checking account so that you can make deposits to the card which other cards companies often expect.
The APR is 17.64% variable which isn’t great but isn’t terrible either. If you continue to make repayments you may request that your balance is increased to $5,000. This is a secured card however and that does mean you’ll need to pay a security deposit.
Indigo® Platinum MasterCard®
Indigo offers an unsecured MasterCard® and they offer a pre-qualification process that will let you know whether or not you have been accepted to their program without having any impact on your credit score. Indigo also accepts people who have been bankrupt in the past and that’s a big deal because many card companies won’t.
They have some really nice online card management tools which are fee with the account and you can even choose the design of your card for free too. The downsides? Depending on the offer that they make to you the annual fee can be up to a hefty $99 a year. The APR is also a steep 23.9% no matter what the APR.
One nice side benefit is that Indigo guarantee that if your card is lost or stolen; they will make sure you don’t have to pay for any fraudulent activity on your account.
First Progress Platinum Select MasterCard® Secured Card
You don’t need a credit history at all to be approved for this Select Mastercard and those with bad credit are welcome to apply too. As with many of the other card providers this is a good card for rebuilding your credit rating because the company updates each of the big 3 credit bureaus monthly.
It is a secured card which means you’ll have to pay a security deposit to get the card issued. However, the APR is lower than most other cards at 14.99% though there is a minimum monthly interest charge of $1.50 which might hurt if you want to keep the balance low on the card. There is also a $39 annual fee for this card.
Outside of NY,IA, AR and WI there is a second option from this company which is the Platinum Prestige Mastercard® this has a lower interest rate of 11.99% but it also has a higher annual fee of $44 a year.
Some Last Thoughts on Best Credit Cards for Bad Credit
These cards are all great ways to being restoring your credit score and getting you access to a credit card if you’ve had bad credit. However, it’s worth remembering that you shouldn’t take on debt that you can’t afford to pay off. If you don’t meet the payments on these cards every single month – your credit score will get worse rather than better. We’d encourage you to carefully consider this before you apply for credit.