Best Credit Cards For Bad CreditA bad credit rating can leave you stuck between the proverbial rock and a hard place. To repair your rating, you need to use credit responsibly, pay religiously, and gradually rebuild your reputation. That's not easy to do when the same bad rating you need to repair makes it impossible to get credit! What’s more, it can be a major challenge to know which company to trust in the ocean of websites offering free financial tools. The most important point is this: secured cards (with a collateral deposit) are by far the best for individuals with bad credit. But which secured cards are best, and where do you find them?
If you’re struggling to answer this question don’t worry, we've done the research for you! Let’s look at the cards you need to know about if you’re trying to repair bad credit:
Capital One® Secured MasterCard®The Details - No annual fee, a variable purchase APR of 24.99%, and a variable Cash Advance APR of 24.99%.
The Pros – It’s time to postpone that trip to Vegas. Capital One reports to all three of the major bureaus, so it's perfect for rebuilding if used responsibly! The initial credit line is $200 with a security deposit of $49, $99, or $200, depending on the state of your report. Since secured cards require a deposit that's the same amount as the credit line, the smaller deposit requirement is a good deal.
A few other excellent features: you can deposit in installments, and you'll be offered a higher line of credit if you make the first five monthly payments on time! Millions of international locations accept the Capital One card, and it comes with 24/7 access to your online account. It even has a mobile app!
The Cons - There's always a catch. In this case, you need to have a checking or savings account to register. If your credit is quite severely damaged, or if you've gone through something like bankruptcy, you might not qualify.
Final Thought – There are no issues hidden in the fine print here. If your credit is just damaged, not completely demolished, this is a great choice for rebuilding.
OpenSky® Secured Visa® CardThe Details - $35 annual fee, an APR for purchases of 18.64%, a Cash Advance APR of 18.64%, and penalty fees of up top $27 for late payments and $25 for returned payments.
The Pros – OpenSky also reports to the three main bureaus, which helps you rebuild your rating fast. Remarkably, it takes less than 5 minutes to apply, and a credit check isn't required! That means you have a good chance to qualify, even if your credit looks like the morning after a bachelor party. You'll still need a decent job, though, as they do have income standards.
Another nifty touch is that you don't need a checking account. You can pay your monthly bill with a check, money order, wire transfer, or even another card. You must submit a security deposit up front, but it's fully refundable, and you can choose your credit line, ranging from $200 up to as much as $3,000. There’s even a chance for a potential increase to $5,000 if you play your cards right.
The Cons - Not much. You can’t upgrade to an unsecured account, but that's pretty much the only downside. You will want to stay aware of those penalty fees, though!
Final Thought - This is a great card and a fantastic option for those folks who are trying to rebuild credit.
Discover it® Secured CardThe Details - Another option with no annual fee, the Discover Card has a variable APR of 24.74%, a Cash Advance variable APR of 26.74%, and an introductory balance transfer APR promotion of 10.99% for the first six months.
The Pros - The lack of an annual fee is a great deal, and cash back on every purchase can save you money. You won't face a late fee on your first late payment, nor will paying late raise your APR. It's better not to poke that hornet's nest, though, so avoid late payments at all costs. That pattern probably contributed to the bad score you're trying to repair.
The dollar-for-dollar match is an impressive feature. There is a $200 minimum for the security deposit to establish that line of credit, which can be higher if you have the bills to hand out. Your account will be reviewed each month once the first seven months have passed, and if you're keeping up with payments, you can transition to an unsecured account with no security deposit needed.
Do you eat out or fill your car with gas a lot? Wild guess: there's a good chance you're doing at least one of these activities often enough to make the 2% cash back you'll earn when you opt for this card. The 2% benefit is only applicable to a quarterly $1,000 combination of those kinds of purchases, but all other spending will get you an unlimited 1% cash back anyway. Nice! Who says there's no free lunch?
All the 2019 conveniences are available: text reminders, email alerts, and general 24/7 customer service. You can even get your FICO® Credit Score free via your online account or even on your monthly statements.
The Cons - You have to pay the initial deposit with a bank account! If you're not using traditional financial services, you're out of luck.
Final Thought -This is a great secured card, offering rewards and features far better than what most competitors offer.
So, there you have it. There are some fantastic options available for getting your hands on some plastic cash to boost your credit over time. Just be responsible as you walk the road of credit repair, skipping any pitfalls. Now take advantage of this list and consider which option suits your needs best. You're on the yellow brick road to fiscal respectability.
Find them here:
Capital One® Secured MasterCard®
OpenSky® Secured Visa® Card
Discover it® Secured Card