Bad Credit. It’s the biggest obstacle to getting a credit card from just about any lender. All of those credit card ads you see on television tout great rates and amazing rewards offers, yet only on approved credit. But let’s face it, you’re not getting approved. Your FICO score is far too low to qualify for one of those cards, much less any others.
Well, you’re not alone; millions of people out there are struggling with insufficient or inadequate credit histories and, as a result, the credit card industry has begun to cater to this growing segment of the population. There are two types of cards available: secured and unsecured.
A secured card relies on a security deposit component to guarantee your purchases in the event you default on your payments. The unsecured type of card is the most common credit card where a line of credit is extended by a bank or other financial institution. Secured cards are a terrific way to rebuild your credit history as they allow you to manage your funds more responsibly through lower credit limits and constant reporting to the three major credit bureaus.
Unfortunately, either type of card will come with high Annual Percentage Rates (APRs) for consumers who have poor or no credit. This is done to discourage those consumers from maintaining a balance on their card instead of paying the bill off in full each month. For those of you who are getting rejected for credit cards across the board due to your low FICO score, here are some options you may want to consider.
1. Capital One Secured MasterCard
This is one of the best all-around cards for consumers with poor credit because it offers all of the benefits of credit card ownership while helping you rebuild your credit through regular reporting to all of the credit bureaus. Capital One is one of the leaders in the credit card industry providing some of the best features and rates on the market. The APR is high as can be expected but there are no annual fees and you can get a pretty decent credit limit of $3000 for a security deposit of just $200.
APR: 24.99% on all purchases and balance transfers, which is high for most cards but relatively low compared to other secured cards.
Fees: None. No annual fee. No balance transfer fees. No application fees.
Advantages: Capital One is FDIC insured so your money is protected. The minimum security deposit is just $49 for a limit of $200 and the security deposit can be paid in installments as long as the full amount has been tendered within 80 days of approval. Capital One also offers an opportunity to raise your credit limit without an additional security deposit if you qualify.
Disadvantages: That security deposit doesn’t earn any interest, so you’ve put aside up to $200 that isn’t earning you any money. This is not uncommon with most secured cards but the trade off is that you’re repairing credit with a widely accepted credit card.
2. First PREMIER Bank MasterCard
This MasterCard is a basic credit card that provides the ability to make purchases at online and storefront merchants around the world and helps you rebuild credit with routine reporting to the three major credit bureaus. But you’re going to pay for the privilege as the First Premier card comes with a litany of fees and high security deposit requirements. On the plus side, the APR isn’t as high as other cards for people with poor or no credit.
APR: 19.9% on all purchases and balance transfers. Not bad considering other cards offer rates that are exponentially higher.
Fees: Plenty. $50 Annual Fee. $29-$35 Late Payment Fee. $29 Returned Payment Fee. Credit Limit Increase Fees are 50% of the increased amount.
Advantages: Application Process is very simple and straightforward and, despite all of the other fees you’ll be paying with the First Premier card, there is no fee to apply.
Disadvantages: Besides all of the fees, the bank is also pretty stingy about raising your credit limit. You can be highly diligent about paying your bills on time and avoiding the interest that will accrue and they may still not raise your limit. If they do, expect it to be negligible at best.
3. Credit One Bank Unsecured Visa Credit Card
This Visa is one of the best options for finding a card that will afford consumers with poor credit the opportunity to own a card without the inconvenient trappings that often come with it. There are no security deposits needed, no upfront costs for ownership or application and, if you have qualifying credit, there may be no annual fee either. This is a card that even provides some of the additional perks that are usually associated with other credit cards that are only attainable with good to excellent credit.
APR: 15.65% – 24.15% Variable, which means your rate is determined by your FICO score and creditworthiness.
Fees: $0-$99 Annual Fee. Depends on your credit score. But the good news is that you don’t have to pay the entire fee up front as it can be paid out over time in monthly installments.
Advantages: Credit One reports to all of the major credit bureaus so the card will help you rebuild your credit as long as you are responsible with it. This card also affords 1% cash back rewards on gas and grocery purchases as well as flexible payment dates. You can find even find out if you’re pre-qualified in just 60 seconds without doing any damage to your credit score.
Disadvantages: None. This is a great card for people who have difficulty getting a credit card due to their undesirable credit score.
4. Indigo Platinum MasterCard
Another MasterCard option for people who have bad credit. The card is issued by Genesis Bankcard Services, so it’s not part of a larger bank or issuer such as Capital One and the lowest APR you can get with it is still pretty high. There are no rewards or extra bells and whistles that come with it either, this is a card designed for rebuilding credit through responsible use. That’s about all you can expect from it. You do get a few protection perks that aren’t out of the ordinary with most cards, but they do offer some peace of mind.
APR: 23.99% for all applicants.
Fees: $0-$99 based on credit score. Late Payment, Returned Payment and Overlimit Fees: $37. Set Up and Maintenance Fees may also apply.
Advantages: You may be eligible for this card even if you have a previous bankruptcy. The application process lets you check for prequalification without affecting your credit score. Consumer protections include price protection and extended warranty protection, as well as identity theft resolution and zero fraud liability. This way you won’t be responsible for any unauthorized charges and if something you purchase drops in price, the card will issue you a refund for the difference.
Disadvantages: If you miss a payment, the penalty APR can raise up to 29.99% It could also take weeks to get a response of approval or denial on your application.
5. Merrick Bank Double Your Line Visa Credit Card
Merrick Bank’s Visa brings a great annual percentage rate, no penalty rates or over limit fees, and the card reports in to the major credit bureaus while also providing you with your FICO score monthly. The other great thing about the card is that it will let you increase your credit line if you make your payments faithfully for the first seven months of ownership. But you’ll need to be careful with that function as it could easily turn into a disadvantage. There is also an annual fee.
APR: 17.70% for qualified applicants, which is pretty great for a card catering to consumers with poor credit. The rate is 22.70% on cash advances.
Fees: $36 Annual Fee for the first year then billed $3 every month after the initial period. $37 Penalty Fees. $10 or 4% of transaction on Cash Advance Fees.
Advantages: This is a fully secured card so the security deposit you give them is the amount of your credit limit up to $3,000. The minimum you can give them is $200, so if you want to take things slow you can have low overhead on this card and prevent yourself from racking up a high balance over time. This can also help you get a higher limit with their Double Your Line feature through paying off the minimum each month. The low limit will keep the bills low until you decide to raise that limit. The deposit is FDIC insured as well.
Disadvantages: The Double Your Line feature only requires you pay the minimum amount each month. Paying the minimum on your card can accrue interest and increase your debt once the interest rate kicks in, so you will need to be extremely responsible with this card.
6. USAA Secured Card Platinum Visa
There’s a lot to love about this secured Platinum Visa from USAA, but only if you’re a current USAA member. You can only get this card if you’re a member of the U.S. Military, a veteran with an Honorable Discharge, or a family member of one of the same. If you qualify under one of those distinctions, you can enjoy the many benefits of this secured credit card that offers interest on your security deposit along with credit rebuilding capabilities.
APR: 10.15% to 20.15% Variable based on your FICO score. The rate stays the same for all purchases, transfers, and cash advances. No penalty APR.
Fees: $35 Annual Fee. Up to 3% of the transaction on Balance Transfer and Cash Advance. No Foreign Transaction Fees.
Advantages: The biggest one is easily the interest accrued on your security deposit. Unlike most cards that keep your money from earning anything as the issuer holds onto it, this secured card uses a certificate of deposit (CD) to hold your money which earns variable interest at a rate of around 0.54%. Your credit limit is determined by how much you want to secure it for, with a minimum of $250 and maximum of $5,000. The card comes with standard credit card protections such as collision damage waiver coverage on rental cars and identity theft.
Disadvantages: Not much except for the fact that you can’t get this card unless you are now or once were a member of the U.S. Military.
7. OpenSky Secured Visa Credit Card
The OpenSky Visa is a fully secured credit card. You can apply without having any credit history because there’s no credit check necessary. Don’t have a checking account? That’s fine, you don’t need one of those either. The application process is simple and takes about five minutes to complete. But it’s a good card for rebuilding your credit because OpenSky reports to all of the major credit bureaus and your credit limit is determined by the amount of your security deposit, up to $5,000
APR: 17.64% on all purchases and transfers. Not bad for a secured card. But miss a payment or two and the penalty APR kicks in at 21.75%
Fees: $35 Annual Fee. Cash Advance Fee of $6 or 5% of the transaction. $27 Late Payment Fee. $25 Returned Payment Fee. 3% Foreign Transaction Fee.
Advantages: No credit checks or credit history required. You control your credit limit through the size of your deposit and you can raise your limit at any time. The card also lets you access your financial information online and other educational financial resources to help you manage your credit more effectively.
Disadvantages: Your security deposit doesn’t accrue interest. This is standard with most secured cards. The APR penalty, though also relatively standard, can be a disadvantage as well.
8. Discover it Secured Card
The it card has been a popular choice for consumers with good to great credit because of all the terrific rewards and features that it offers. Unfortunately, most people think that they can’t get this card if they have lousy or insufficient credit, but the converse is mostly true. Granted it’s not the exact same card but there are a lot of terrific benefits to this version that does cater to those who would otherwise be declined for the unsecured card.
APR: 23.24% which is among the highest on our list. But you have an introductory APR of 10.99% on balance transfers. However, one of the benefits of this card comes with not carrying a balance so it may not make much sense to transfer anything to the card from another account.
Fees: No Annual Fee. No Overlimit Fee. No Late Fee on First Late Payment, $35 for each one after.
Advantages: There is a veritable laundry list of reasons why owning this card can be a great choice:1% cash back rewards on all purchases, 2% cash back rewards at gas stations and restaurants, new card members get additional matching cash back from Discover on all of their rewards in the first year of ownership, and you can FICO score tracking. The card also has the Freeze it feature which lets you freeze and unfreeze your account if the card is lost or stolen. You may even qualify to get your security deposit after 12 months of responsible use.
Disadvantages: Not much other than that high APR.
9. primor Secured Visa Gold Card
Think you can’t have a gold card with poor or no credit? Think again. primor offers a secured Visa Gold with a shockingly low APR and guaranteed instant approval with certain qualifications. The annual fee is higher than most cards, but you get all of the credit bureau reporting so you can rebuild your credit with this card and you pick your credit limit with your deposit amount.
APR: 9.99% which is pretty much unheard of on any secured card. That’s not introductory either, that’s your APR on this card. It jumps up to 18.99% on cash advances.
Fees: $49 Annual Fee. $29 Late and Returned Payment Fees. $5 or 5% Cash Advance Fees.
Advantages: If that APR wasn’t enough to make you want this card, then perhaps the instant approval will interest you. But there are stipulations to that guarantee, your monthly income must exceed your monthly expenses by $100 or more. Any credit history will get you approved, even damaged or poor credit.
Disadvantages: You have to open a savings account first and the money you deposit is your limit. But you do get the protection of FDIC insurance on that cash.
10. Fingerhut Credit Account
This card is comparable to owning a department store line of credit. It can only be used by the issuing store and in this case, it’s the online retailer Fingerhut. They are an online shopping destination much like Amazon. This credit account allows you to purchase goods and products from the Fingerhut site and the application process is simple and quick. You do not need to put up any security deposit and your credit limit is determined by your credit history.
APR: 25.15% which is the highest rate on our list.
Fees: $37 Late and Returned Payment Fee
Advantages: The lack of a required security deposit is a definite plus. Fingerhut offers up to 630,000 items from major, mainstream, well-known brands and manufacturers. Individuals with bad or no credit will likely qualify.
Disadvantages: The account can only be used at Fingerhut. You can only use it to purchase products from their website, this is not a card you can use at other retailers or merchants. So you’re buying power is limited to only what Fingerhut offers in their catalog and website.
11. Total Visa Unsecured Credit Card
The highest APR on our list, the highest fees of any card we’ve featured, and your email address is going to get hammered with daily emails and digital newsletters. You also need a checking account to apply and the limit on the card is only $300. But the trade-off is that you don’t have to put up any money up front since it’s not a secured card.
APR: 29.99%. Basically 30% to carry a balance on this card. They really want you to pay in full every month and this high interest rate will certainly motivate you to do so.
Fees: A lot of them and they’re all very high. $89 one-time processing fee. $75 Annual Fee for the first year, $48 every year after. $75 Annual Servicing Fee. $37 for Late and Returned Payment Fees ($15 in Iowa). $29 Additional Card Fee.
Advantages: If you have been turned down for just about every other possible unsecured credit card out there, then you have a good shot at getting approved for this one.
Disadvantages: Sure this is a last resort for an unsecured card, but it might behoove you to get a secured card instead due to the incredibly high APR, multiple fees, and the maximum limit of $300. You can get approved for a higher limit after six months of responsible use but with that APR hanging over your head it may not be worth it. You may be paying more money to own the card then you will be using it for purchases.
Our Final Thoughts
These credit cards can be a crucial component in rebuilding your credit through responsible use and monthly reporting to the three major credit bureaus. Using a secured card to make purchases is a good start towards repairing your history because it allows you to control your spending limits and keeps your bills at manageable levels each month. Unsecured cards give you a little more freedom where your spending limits are concerned, but that can also get you into trouble if you’re not careful.
As you can see, some unsecured cards impose higher fees and APRs for the privilege of not keeping your money tied up in a security deposit account, so secured may be the way to go. Shop around, compare rates and fees and, based on the cards on this list, you can find a whole range of possibilities out there. Some of these cards even provide cash back rewards programs. So check out the cards on this list and do some more homework to find other options in case none of these fit your needs.
