10 Best Credit Cards for People with Bad Credit

In today’s fast-paced financial world, credit cards play a pivotal role in managing one’s expenses and building a strong credit history. However, not everyone has a pristine credit score. Many individuals struggle with bad credit due to various reasons, making it challenging to qualify for traditional credit cards. The good news is that there are credit card options tailored specifically for people with bad credit. In this comprehensive guide, we’ll explore the 10 best credit cards for people with bad credit score to help regain their financial footing.

Introduction

Understanding Bad Credit

Before delving into the world of credit cards for bad credit, it’s crucial to understand what bad credit means. Bad credit is typically a result of past financial missteps, such as late payments, high credit card balances, bankruptcy, or collections. Your credit score, a three-digit number ranging from 300 to 850, reflects your creditworthiness. A low credit score (typically below 580) indicates bad credit, which can make it challenging to qualify for traditional credit cards.

When it comes to credit scores, there’s no universal threshold that separates “good” from “bad” credit. Different lenders use various credit scoring models, making it essential to understand where your credit stands. Generally, a FICO score below 580 is considered very poor, while scores between 580 and 669 fall into the “fair” category.

Your credit score plays a pivotal role in your ability to obtain credit cards. The lower your score, the more limited your options become. Typically, individuals with bad credit may only qualify for secured cards or cards with higher interest rates and additional fees. It’s important to note that your credit score also influences the terms and conditions of your credit card, so improving it can lead to more favorable offers.

What Is a Bad Credit Score?

A bad credit score is a numerical representation of an individual’s creditworthiness, indicating a higher level of risk to lenders and creditors. It signifies that the person has a history of financial behavior that may include late payments, defaults, high levels of debt, or other negative credit-related actions. While there isn’t a universal threshold defining a “bad” credit score, it generally refers to a credit score that falls below a certain range, making it challenging for the individual to obtain credit or loans at favorable terms.

Credit scores are typically calculated using various scoring models, with FICO (Fair Isaac Corporation) being one of the most widely used. In the FICO scoring model, which ranges from 300 to 850, a score below 580 is often considered very poor. However, different lenders and credit reporting agencies may have their own criteria for categorizing credit scores as good, fair, or bad.

Consequences of a Bad Credit Score

A bad credit score can have significant consequences, including:

• Difficulty obtaining credit: Lenders are less likely to approve loan or credit card applications from individuals with bad credit scores.
• Higher interest rates: If approved for credit, those with bad credit may be offered loans or credit cards with higher interest rates, increasing the cost of borrowing.
• Limited borrowing options: Bad credit can restrict the types of loans and credit cards available, often leading to fewer choices and less favorable terms.
• Challenges in renting or leasing: Landlords and leasing companies may check credit scores before approving rental applications, potentially leading to rejections or higher security deposits for individuals with bad credit.
• Employment prospects: Some employers may review credit reports as part of their hiring process, and a bad credit history could affect job opportunities, particularly in roles that require financial responsibility.
• Higher insurance premiums: Insurance companies may use credit scores to determine premiums, resulting in higher costs for individuals with poor credit.

To improve a bad credit score, individuals can take steps such as paying bills on time, reducing outstanding debts, and responsibly managing credit accounts. Over time, these actions can lead to an improved credit score and increased access to credit at more favorable terms.

Common Causes of Bad Credit

Bad credit doesn’t happen overnight. It’s often the result of repeated irresponsible credit usage. Some common causes of bad credit include:

• Missed payments
• Late payments
• Carrying high balances
• Maxing out credit cards
• Making only minimum payments
• Applying for too many credit cards
• Filing for bankruptcy

Deciding If You Need a Credit Card with Bad Credit

If you’re unsure whether you should apply for a credit card designed for individuals with bad credit, consider the following steps:

• Check Your Credit Score: Before applying for any credit card, assess your credit score to understand where you stand.
• Evaluate Your Credit History: If you have a history of financial missteps like bankruptcy or loan defaults, a credit card tailored for bad credit may be your best option.

The Importance of Rebuilding Credit

Bad credit isn’t a permanent sentence. With the right financial tools and responsible credit management, you can rebuild your credit over time. One of the most effective ways to start this journey is by obtaining a credit card designed for individuals with bad credit. These cards provide an opportunity to demonstrate responsible credit use, ultimately helping to improve your credit score.

Secured vs. Unsecured Credit Cards

Individuals with bad credit typically have two options for credit cards: secured and unsecured.

When it comes to credit cards, there are two primary categories: secured and unsecured. Each type has its own set of characteristics and is designed to serve different financial needs and situations. Understanding the differences between secured and unsecured credit cards is essential for making informed decisions about your finances.

Secured Credit Cards

How Secured Credit Cards Work

Secured credit cards require a security deposit, which serves as collateral for your credit limit. This deposit minimizes risk for the card issuer, making it easier for individuals with bad credit to get approved. Secured cards function similarly to traditional credit cards, and your payment activity is reported to credit bureaus, positively impacting your credit history when managed responsibly.

Individuals with bad credit typically have two options for credit cards: secured and unsecured.

When it comes to credit cards, there are two primary categories: secured and unsecured. Each type has its own set of characteristics and is designed to serve different financial needs and situations. Understanding the differences between secured and unsecured credit cards is essential for making informed decisions about your finances.

Secured Credit Cards

• Collateral Requirement: Secured credit cards require a security deposit, typically equal to the credit limit of the card. This deposit acts as collateral and serves as a guarantee for the card issuer in case the cardholder defaults on payments.
• Approval Easier for Some: Secured cards are often easier to obtain, making them a popular choice for individuals with limited credit history or poor credit scores. Since the collateral mitigates risk for the issuer, they are more willing to approve applications.
• Credit Building: Secured cards are a valuable tool for building or rebuilding credit. Responsible use, including timely payments, can help improve your credit score over time.
• Credit Limit: The credit limit of a secured card is typically determined by the amount of the security deposit. As you demonstrate responsible usage, some issuers may offer opportunities to increase your credit limit.
• Interest Rates and Fees: Secured cards may have higher interest rates and annual fees compared to unsecured cards. However, these costs can vary depending on the card issuer and specific terms.

Top Secured Credit Cards for Bad Credit

Discover it® Secured Credit Card 

Read Our Full Review On The Discover it Secured Credit Card

The Discover it® Secured Credit Card stands out as an excellent choice for individuals seeking to bolster their credit while reaping the benefits of cashback rewards. What sets this card apart from its peers in the secured credit card realm is its robust rewards program and enticing first-year bonus. Here’s a comprehensive overview of what you can expect from this card:

Key Features:

Rewards Program

• Rewards Rate: Cardholders can earn a remarkable 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter, then 1%), along with 1% cash back on all other purchases. This competitive rewards structure places it on par with traditional credit cards, making it a rare gem among secured cards. What makes this cash back even more appealing is Discover’s unique offer: they will match all the cash back you’ve earned at the end of your first year.

Welcome Offer

• Discover’s welcome offer is truly exceptional. While most secured cards do not provide welcome offers, this one goes above and beyond. At the end of your first year, Discover will double the cash back you’ve earned. This means that diligent cardholders can see substantial rewards in a relatively short time frame.

Rates and Fees

• No Annual Fee: The Discover it® Secured Credit Card stands out for its $0 annual fee, offering cardholders a cost-effective means of credit building. Unlike many credit-building cards laden with fees, this card keeps costs low.
• No Foreign Transaction Fees: For frequent travelers or those who make international purchases, the absence of foreign transaction fees is a significant perk.
• No Penalty APR or Late Payment Fee (up to $41 after that): Recognizing that cardholders on a credit-building journey might make occasional slip-ups, Discover offers leniency by not imposing a penalty APR or charging a fee for your first late payment (up to $41 afterward).
• Balance Transfer Intro APR: For those looking to manage existing balances, the card offers a 10.99% balance transfer intro APR for the first six months. While this comes with a 3% intro balance transfer fee (up to 5% on future transfers), it can be a valuable feature for some cardholders.
• Ongoing Variable APR: The card’s ongoing variable APR is 28.24%, which is typical for secured cards. However, it’s essential to pay attention to this rate if you anticipate carrying a balance.

Credit-building Features

• Free FICO Credit Scorecard Access: Cardholders gain access to their FICO credit score through the Discover app, along with other credit education resources. This tool helps you track your credit score and monitor changes resulting from your credit habits.
• Credit Reporting: Discover shares your credit history with the three major credit bureaus (Equifax, Experian, and TransUnion), provided you use the card responsibly. This is a significant factor in building or rebuilding your credit.
• Automatic Account Reviews: Discover will review your account starting at seven months to assess your eligibility for an upgrade to an unsecured credit card. If you qualify, Discover will refund your security deposit and potentially grant you a higher credit limit.

Other Cardholder Perks

• Discover® Identity Alerts: Discover offers free identity alert services, including daily monitoring of your Experian® credit report and alerts for new inquiries or accounts. They also notify you if your personal information is detected on the Dark Web.
• Free Overnight Card Replacement: Losing your card is never fun, but Discover makes it convenient by offering free overnight card replacement. It’s worth noting that this offer doesn’t apply to P.O. boxes or addresses located outside of the U.S.
• Online Privacy Protection: Discover’s mobile app provides Online Privacy Protection at no cost. It scans your online personal information approximately every 90 days and submits opt-out requests on your behalf to select people search sites.
• Freeze it®: When activated via the online portal or app, Freeze it® blocks new purchases, cash advances, or balance transfers. This feature provides peace of mind in case your card is lost or stolen.

Pros and Cons

Pros:

• Competitive rewards: Earn cash back on gas stations and restaurants, with a generous first-year cash back match.
• No annual fee: Keep costs low with no annual fee.
• No foreign transaction fees: Travel without extra charges.
• Upgrade possibility: Qualify for an unsecured card after just seven months of responsible card use.
• Free FICO scorecard: Monitor your credit journey with access to your FICO score.

Cons:

• Limited spending categories: If you don’t spend much on gas and dining, other cards may offer better rewards.
• Acceptance: Discover may not be as widely accepted as some other networks.
• APR: The card’s APR is relatively high, so it’s best to avoid carrying a balance.

This comprehensive overview should provide you with valuable insights into the Discover it® Secured Credit Card’s offerings, making it a strong contender for individuals focused on building or rebuilding their credit.

Capital One Platinum Secured Credit Card

Read Our Full Review On The Capital One Platinum Secured Credit Card

The Capital One Platinum Secured Credit Card is a standout option in the world of secured credit cards, designed to help individuals with less-than-perfect credit scores rebuild their financial standing. If your FICO score is below 600, this card can be an accessible and valuable tool on your journey to better credit.

Key Features:

No Annual Fee: This card offers financial relief by not burdening you with an annual fee, making it a cost-effective choice for credit building.

No Foreign Transaction Fee: For those who travel or make international purchases, this card is an excellent companion, as it won’t impose additional fees on foreign transactions.

No Intro APR Offers: While introductory APR offers are absent, it’s important to note that this card is primarily designed for credit building, not rewards.

Security Deposit: You can secure the Capital One Platinum Secured Credit Card with a minimum cash deposit of just $49, with the possibility to increase it to $200 based on your credit score.

Variable APR: It’s worth mentioning that this card carries a 30.49% variable APR, which is relatively high. As a result, it’s advisable to pay off your balance in full each month to avoid accruing interest charges.

Credit-Building Features

In addition to its favorable fee structure, this card offers several credit-building features to help you enhance your creditworthiness:

• Access to CreditWise® Credit Alerts: Keep track of changes in your credit report to stay informed about your financial progress.
• Personalize Your Bill Due Date: Align your payment schedule with your financial situation for added convenience.
• Reports to the Three Credit Bureaus: Your responsible card usage will be reported to Equifax, Experian, and TransUnion, which can gradually boost your credit score.
• Automatic Account Review: After six months, Capital One will review your account to see if you qualify for a credit limit increase, potentially giving you more financial flexibility.
• Potential to Earn Back the Security Deposit: By consistently making on-time payments and managing your account responsibly, you can earn back your initial deposit. This not only improves your credit score but also opens the door to upgrading to an unsecured credit card.

Pros and Cons

Pros:

• Low Minimum Deposit: With a minimum cash deposit as low as $49 (or up to $200, depending on your credit score), you can begin your credit-building journey. Plus, you’ll receive your security deposit back when you close your account in good standing.
• Easier Approval: If you have a less-than-stellar credit history, this card offers a higher chance of approval compared to unsecured cards, making it an ideal starting point for credit improvement.
• Credit Reporting: Capital One reports your credit activities to all three major credit bureaus, gradually enhancing your credit profile.
• No Annual Fee: It’s a budget-friendly option for building credit, as there’s no annual fee to contend with.

Cons:

• No Rewards: While this card excels at credit building, it doesn’t offer rewards, which may limit its long-term appeal for some users.
• High APR: The card carries an ongoing APR of 30.49%, which can be costly if you carry a balance. To fully benefit from this card, it’s advisable to pay off your balance in full each month.

The Secured Chime® Credit Builder Visa Credit Card 

Read Our Full Review On The Secured Chime® Credit Builder Visa® Credit Card

The Secured Chime® Credit Builder Visa® Credit Card is a unique choice for credit building, notable for its absence of credit checks and minimal fees. It offers a secure way to establish credit, but other secured cards may provide more rewards with less effort if you can manage the standard minimum security deposit.

Key Features:

Best for Low-Cost Credit Building:

• Rewards Rate: N/A
• Annual Fee: None
• Intro Offer: N/A
• Regular APR: N/A
• Recommended Credit: No Credit History

Note: Chime is a financial technology company, not a bank. Banking services and the debit card are provided by The Bancorp Bank N.A. or Stride Bank, N.A., both Members FDIC. The secured Credit Builder card is issued by Stride Bank, N.A.

Unique Approach to Secured Cards

• Unlike traditional secured cards, the Chime Credit Builder Visa doesn’t require a minimum security deposit.
• Your credit limit is equal to your secured account balance, ensuring you spend only what you have.
• It eliminates APR charges, late payment fees, and over-the-limit penalties.
• Chime doesn’t report your credit utilization, allowing low balances without affecting your credit-building efforts.

Considerations

• You need a Chime Checking Account in addition to your secured deposit account and Credit Builder card.
• The card doesn’t offer rewards or an upgrade path to an unsecured card with Chime.

Additional Cardholder Perks

• 24/7 Pay-Per-Use Roadside Dispatch Assistance
• Dovly Uplift™ Credit Management and Report Inaccuracy Repair Service Access
• Access and Discounts to Partner Programs

Chime® Checking Account Perks

• Automatic Paycheck Notification
• SpotMe® Overdraft Protection for Chime Checking Account
• Ability to send and receive SpotMe $5 “Boosts” to extend overdraft limit.

Rates and Fees

• Late Payment Fees: None
• Cash Advance Fees: None (applies only to out-of-network ATMs)
• APR: None (since you must pay your balance in full each month)
• Annual Fee: $0
• Foreign Transaction Fees: None
• Cash Advance Fee for Out-of-Network ATMs: $2.50 (waived for in-network ATMs)

Pros and Cons

Pros:

• Cost-Effective: Minimal card costs compared to other credit-building cards.
• No Credit Check: No credit check is required to apply.
• High Credit Limit: Offers one of the highest potential credit limits among secured cards, up to $10,000.

Cons:

• Checking Account Requirement: Requires a Chime Checking Account with a $200 direct deposit to apply.
• No Upgrade Option: No opportunity to upgrade to an unsecured card.
• Potentially Slower Credit Building: Chime doesn’t report your credit utilization.

The Chime Credit Builder Visa stands out as an accessible and cost-effective option for building credit, offering a unique approach to secured cards without traditional fees and credit checks.

The Zolve Azpire Credit Builder Card 

Read Our Full Review On The Zolve Azpire Credit Builder Card

The Zolve Azpire Credit Builder Card offers a distinctive and accessible approach to credit building, boasting several key benefits and features that distinguish it from traditional credit cards. Here’s a concise overview:

Key Features:

No Annual Fee or Interest: Azpire eliminates annual fees and interest charges, allowing you to focus on building credit without added costs.

No Credit Check: Accessibility is a key advantage as Azpire doesn’t require a credit check, catering to individuals with limited or poor credit histories.

Credit Card Upgrade: Azpire provides a clear pathway to upgrade to an unsecured credit card with a credit limit of up to $5,000, achievable in as little as 4 months.

Positive Credit Reporting: Every purchase made with Azpire is reported to credit bureaus as positive repayment behavior, contributing to gradual credit score improvement.

Use Your Own Money: Azpire enables you to make purchases using the funds in your account, reducing the risk of debt accumulation and overspending.

Easy Credit Building: The card simplifies credit building, with each purchase contributing to your credit score, offering a straightforward path to financial progress.

No Interest Charges & Late Fees: Azpire does not impose interest charges or late fees, easing financial stress and promoting responsible credit management.

Amazing Rewards: Enjoy up to 10% cashback on various outlets, including groceries, restaurants, fashion, shopping, and more, enhancing the value of your spending.

Safety and Security: Azpire prioritizes financial security, offering FDIC insurance up to $250,000 and Mastercard ZERO liability protection. Advanced encryption safeguards your transactions.

Flexibility in Application: – You can apply for Azpire with a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or passport, extending accessibility to a wide range of applicants.

Azpire represents a convenient and inclusive approach to credit building, offering cashback rewards, no annual fees, and the potential for upgrading to a traditional credit card. It serves as a valuable tool for those seeking financial improvement while maintaining fiscal discipline.

A Unique Approach to Building Credit: The Zolve Azpire Credit Builder Card stands out as it blends the characteristics of a debit card with a credit-building tool. Notably, it reports your payment history to all three major credit bureaus, facilitating the establishment of a positive credit history, all while avoiding annual fees and interest charges.

Accessibility for All: Azpire’s greatest advantage is its accessibility. It eliminates the need for a Social Security number in the application process and does away with credit checks and minimum deposit requirements. Consequently, it emerges as an ideal choice for individuals with poor credit, fair credit, or even those without a credit history.

How It Works: To leverage the Zolve Azpire card, you’ll need to link it to an Azpire checking account. The balance in this account serves as your credit limit. When you make purchases with the Azpire card, the corresponding amount is automatically deducted from your account, and your positive payment history is reported to credit bureaus. Over time, this can potentially elevate your credit score, opening the door to an unsecured credit card with a $5,000 limit in just four months.

Pros and Cons:

Pros 

• Credit Reporting: The card reports payment history and account age to all three credit bureaus, aiding in establishing a positive credit history.
• No Fees or Interest: The absence of annual fees or interest charges makes it a safer option compared to traditional credit cards.
• Upgrade Potential: Responsible card usage may lead to an upgrade to an unsecured credit card with a higher limit.
• Accessibility: No Social Security number, credit check, or minimum deposit required, broadening accessibility.

Cons 

• Credit Utilization: The card does not report on credit utilization, a vital factor in your credit score.
• Limited Cash Back: Cash back rewards are limited to Dosh offers, which may be available without the Azpire card.
• Limited Rewards: The unsecured Zolve card may not offer the most lucrative rewards after you’ve built better credit.

The Self – Credit Builder Account with Secured Visa® Credit Card

Read Our Full Review On The Self – Credit Builder Account with Secured Visa® Credit Card

The Self – Credit Builder Account with Secured Visa® Credit Card is a unique financial tool that combines a credit-building loan with a secured credit card. It offers a pathway to enhance your credit mix and build credit more efficiently. However, it’s important to consider the associated costs and whether it aligns with your financial goals.

We all aspire to financial stability and independence, and a strong credit score is an essential stepping stone. The Self – Credit Builder Account with Secured Visa® Credit Card offers a unique approach to achieving this. Let’s embark on a journey to unlock your financial potential!

Key Features:

• Rewards: No rewards program available
• Annual Fee: $25 annual fee
• Introductory Offer: No introductory offer provided
• Regular APR: Variable APR of 26.99%
• Recommended Credit: Suitable for individuals with no credit history

Credit-building Features:

• No deposit required
• Enhances your credit mix through a loan and credit card combination
• No hard inquiry on your credit report
• Reports your credit activity to all three major credit bureaus
• Assessment of Credit-building Features: Considered favorable

What is the Self Credit Builder Account? The Self Credit Builder Account operates as a credit-builder loan secured by a certificate of deposit (CD). It serves as the foundation for obtaining the Self Secured Visa Credit Card.

How Does the Self Secured Visa Work? Once eligible, you can choose the amount from your savings to serve as the security deposit and starting credit limit for the Self Secured Visa. After ordering the card, it functions like any other secured credit card, helping you build your credit history.

Eligibility and Requirements: To become eligible for the Self Secured Visa, you must begin with a Credit Builder Account. This involves selecting a payment plan, paying an upfront administration fee, and making fixed monthly payments over 24 months. After three on-time payments totaling at least $100, you become eligible for the Self Secured Visa.

The Self Credit Builder Account Process: It’s important to note that the Self Credit Builder Account doesn’t provide instant approval. It’s an excellent option for those unable to provide the upfront deposit required for a traditional secured credit card. However, it may not be the most efficient choice for everyone.

Benefits of the Self Secured Visa: The Self Secured Visa offers several advantages, including no additional security deposit or hard credit inquiry. It reports your loan and card payments to all three major credit bureaus, improving your credit mix. Additionally, it provides basic Visa credit card benefits.

Enhancing Your Credit Mix: The Self card and account combo can enhance your credit mix, a factor that influences your credit score. A diversified credit profile can help you build credit faster, demonstrating responsible financial behavior.

No Security Deposit Required: Unlike traditional secured cards, the Self Secured Visa doesn’t require a separate security deposit. The funds for the deposit come from your Credit Builder Account, streamlining your financial commitments.

Pros and Cons:

Pros 

• Credit Reporting: The card reports payment history and account age to all three credit bureaus, helping you establish a positive credit history.
• No Fees or Interest: There are no annual fees or interest charges, making it a safer option than traditional credit cards.
• Upgrade Potential: Responsible card use may lead to an upgrade to an unsecured credit card with a higher limit.
• Accessibility: No Social Security number, credit check, or minimum deposit required, making it accessible to a wide range of individuals.

Cons 

• Credit Utilization: The card doesn’t report on credit utilization, a crucial factor in your credit score.
• Limited Cash Back: Cash back rewards are limited to Dosh offers, which may be available without the Azpire card.
• Limited Rewards: The unsecured Zolve card may not offer the most lucrative rewards after you’ve built better credit.

The OpenSky® Secured Visa® Credit Card

Read Our Full Review On The OpenSky® Secured Visa® Credit Card

A secured credit card is an excellent way to start building or rebuilding your credit score. By providing a security deposit, using the card for purchases, and paying your monthly bill on time, you can gradually improve your creditworthiness. There are several reasons why you might consider getting a secured credit card, such as a recent bankruptcy, back taxes, previous missed payments, or even if you’ve never had credit before.

The OpenSky® Secured Visa® Credit Card stands out from the crowd because it doesn’t require a credit check or even a bank account for approval. This is particularly beneficial for individuals with a history of bankruptcies or back taxes, as many other secured credit cards might not approve you under such circumstances. With the OpenSky Secured Visa, you can take a step toward financial recovery, regardless of your past financial challenges.

Key Features:

Let’s start by examining some key facts about the OpenSky Secured Visa Credit Card:

• No credit check or bank account needed to apply.
• Annual fee: $35.
• Minimum $200 opening deposit required, up to a maximum of $3,000.
• Your credit limit is equal to your deposit.
• Reports to all three major credit bureaus (Experian, Equifax, and TransUnion).
• Finance Devil Rating: 3.4

The OpenSky Secured Visa Credit Card operates on a simple principle. To get started, you need to make an initial deposit, which serves as your credit limit. This deposit can range from $200 to a maximum of $3,000. Your credit limit is directly tied to the amount you deposit.

One of the standout features of this card is that it doesn’t require a credit check for approval. This makes it accessible to individuals with damaged credit or those who have no credit history at all. The absence of a credit check means that applying for this card won’t negatively impact your credit score with a hard inquiry.

Additionally, the OpenSky Secured Visa Credit Card reports your payment history to all three major credit bureaus. This means that your responsible use of the card can have a positive impact on your credit score over time, helping you rebuild your credit.

Pros and Cons:

Pros:

• No credit check: As mentioned, this card is accessible to individuals with poor or no credit history.
• Low annual fee: With an annual fee of just $35, it’s a budget-friendly option.
• Credit building: Responsible use of this card can lead to improvements in your credit score.
• Flexible credit limit: You can start with as little as a $200 deposit or go up to $3,000, depending on your budget.
• Reports to major credit bureaus: Your payment history is reported to Experian, Equifax, and TransUnion, helping you build a positive credit history.

Cons:

• Annual fee: While relatively low, the card does have an annual fee, unlike some other secured cards.
• No rewards: The OpenSky Secured Visa Credit Card doesn’t offer rewards or cashback incentives.
• Foreign transaction fee: It comes with a 3% foreign transaction fee, which can add costs if you travel internationally.
• Limited additional benefits: Compared to other secured cards, it lacks some extra perks like cashback rewards or extended warranties.

The Navy FCU nRewards Secured Credit Card

Read Our Full Review On The Navy Federal Credit Union’s nRewards® Secured Credit Card

If you’re looking to build or rebuild your credit, the Navy Federal Credit Union’s nRewards® Secured Credit Card is a robust option worth considering. This secured credit card stands out in the crowd by offering an opportunity to earn rewards while on your credit-building journey.

Key Features

Card Details

• Annual Fee: $0
• Regular APR: 18.00% variable
• Credit Score: Bad/Poor
• Finance Devil Score: 4.5 stars out of 5

The Navy FCU nRewards® Secured Credit Card* stands out as a reliable option in the world of secured credit cards. Unlike many other cards designed for individuals with limited credit, it offers several notable advantages:

No Annual Fee: Unlike some credit cards that charge an annual fee, the Navy FCU nRewards® Secured Credit Card* keeps your costs low.

No Foreign Transaction or Cash Advance Fees: Many secured credit cards impose hefty fees for foreign transactions and cash advances. This card, however, spares you from these expenses, making it an attractive choice for international travel and cash withdrawals.

Reward Earning Potential: One of the standout features of this card is its rewards program. It allows you to earn 1 point per dollar on eligible net purchases. This is a rarity among secured cards, as they typically don’t offer rewards.

Fast Upgrade Paths: What truly sets the Navy FCU nRewards® Secured Credit Card* apart is its rapid progression from a secured account to partially unsecured and eventually fully unsecured. This feature can help you build credit faster.

Pros and Cons:

Pros:

• No Annual Fee: The absence of an annual fee means you won’t incur additional costs for holding this card.
• No Foreign Transaction Fees: If you travel internationally, this card won’t burden you with foreign transaction fees.
• Earn 1 Point per Dollar: Earning rewards on a secured card is a rare benefit, and this card allows you to accumulate points on your eligible purchases.
• No Cash Advance Fees: You won’t face cash advance fees, which can save you money in emergencies.
• Your security deposit earns dividends, similar to a savings account.
• Navy Federal reviews your account after three months for potential credit limit increases without requiring an additional deposit and at six months for eligibility for the cash Rewards unsecured card.

Cons:

• Membership Requirement: To access this card, you need to be a member of Navy Federal, which may require a family connection to a veteran or military member.
• Secured Card Deposit: As with all secured cards, you’ll need to make an initial deposit.
• A minimum deposit of $200 may be challenging for individuals with limited credit history.
• Some other secured cards offer more generous rewards rates and more flexible redemption options.
• You must open a Navy Federal savings account and deposit $200 into it before applying.

Other Cardholder Benefits

• Cell Phone Protection: Your Navy Federal Credit Card can provide extra protection for your cell phones.
• No cash advance fees, balance transfer fees, or annual fee.
• Points redeemed for cash, statement credit, gift cards, and merchandise.
• Tap to Pay: Make purchases quickly and securely with your nRewards card.

Getting a Secured Credit Card

To obtain a secured credit card, follow these steps:

• Research Available Cards: Compare various secured card options online or through trusted resources.
• Choose a Card: Select a card that aligns with your financial goals and requirements.
• Apply Online: Visit the issuer’s website to apply for the selected secured credit card.

Unsecured Credit Cards

Best Unsecured Credit Cards for Bad Credit

The Mission Lane Visa® Credit Card Overview

Read Our Full Review On The Mission Lane Visa® Credit Card

Key Features:

The Mission Lane Visa® Credit Card is primarily designed to help individuals with bad or limited credit histories improve their credit scores. While it may not offer an array of rewards and perks, it excels in its primary purpose of credit building.

Annual Fee: One of the standout features of this card is its low annual fee, which ranges from $0 to $59. This makes it an accessible option for those who want to build credit without breaking the bank.

Interest Rates: The card comes with a variable APR that falls between 26.99% and 29.99%. While this rate may seem high, it’s important to note that credit-building cards often have higher APRs.

Recommended Credit Score: The Mission Lane Visa® Credit Card is best suited for individuals with bad to fair credit scores, ranging from 300 to 670.

Avoiding Security Deposits: Unlike many credit-building cards that require a hefty security deposit, the Mission Lane Visa® Credit Card is unsecured, meaning you won’t need to tie up hundreds of dollars in a deposit.

Credit-Building Features: This card reports your activity to all three credit bureaus, a crucial factor in improving your credit score over time. Additionally, responsible card use may lead to credit limit increases, making it easier to manage your credit utilization.

No Hidden Fees: The Mission Lane Visa® Credit Card is transparent about its fees, sparing cardholders from common hidden charges associated with subprime cards.

Credit-Building Benefits: While the Mission Lane Visa® Credit Card does not offer rewards, this is intentional, as the primary focus should be on building responsible credit habits rather than earning rewards.

Mobile App and Financial Tools: Cardholders have access to a user-friendly mobile app and a suite of financial planning and education tools, helping them manage their finances effectively.

Fraud Protection: Enjoy peace of mind with $0 fraud liability, ensuring you’re not held responsible for unauthorized charges.

24/7 Customer Support: With round-the-clock support for lost or stolen cards, you’re never alone in case of emergencies.

Pros and Cons:

Pros

• Low or no annual fee, making it accessible to many
• Opportunity for credit limit increase with responsible use
• Reports activity to all three credit bureaus

Cons

• High APR compared to other credit-building cards
• Minimum starting credit limit of $300
• No rewards or welcome offer

The Tomo Credit Card Overview

Read Our Full Review On The Tomo Credit Card

Building credit can be an uphill battle when most credit cards demand a proven credit history. The Tomo Credit Card presents a solution by eliminating the need for a credit check during the application process. Additionally, it doesn’t burden cardholders with interest charges, offering a straightforward way to establish a positive credit profile.

Key Features:

• Annual Fee: $2.99 per month
• Welcome Bonus: None
• Rewards: None
• Regular APR: None
• Finance Devil Score: 4.4 stars out of 5

The Tomo Credit Card may not offer traditional rewards, but it provides several valuable perks:

Cell Phone Protection: Pay your cell phone bill with the Tomo Credit Card, and you’ll enjoy protection against damage or theft.

Partner Benefits: The card unlocks partnerships with Lyft, DoorDash, ShopRunner, and Fandango, providing a range of discounts and benefits.

Influencer Program: If you’re an influencer, you can participate in Tomo’s ambassador program. This allows you to earn 1% cash back for three months for each person you refer to the card, with the potential to earn up to 20% back (up to $500 in cash-back rewards each month).

The Tomo Card operates as a charge card, meaning you must pay your balance in full each month. While this precludes carrying a balance from month to month, it also guarantees that you’ll never incur interest charges. If you fail to pay your balance in full, Tomo will temporarily freeze your account until the outstanding amount is settled.

Pros and Cons:

Pros:

• Cell Phone Protection: The card offers added security for your cell phone expenses.
• DoorDash DashPass: Enjoy a complimentary three-month DashPass subscription and receive $5 off each month.
• Lyft Credits: Take three Lyft rides in a month and receive a $5 credit for your next ride.
• ShopRunner Membership: Get a complimentary one-year ShopRunner membership, providing free two-day shipping and hassle-free returns with numerous top retailers.
• Fandango Credits: For every $20 spent on movie tickets and streaming, receive a $5 credit toward your next purchase.

Cons:

• No Rewards for New Customers: While the primary focus is building credit, it’s worth noting that some starter credit cards offer rewards on everyday purchases. Unless you’re a legacy Tomo cardholder or qualify as an ambassador, you won’t earn rewards.
• Monthly Fee: Unlike many credit cards for those with limited or no credit history, the Tomo Credit Card charges a monthly fee.
• Bank Account Compatibility: To assess your creditworthiness, Tomo requires you to link your bank accounts. Ensure your bank or credit union is compatible with the third party that facilitates this connection.

Charge Card Benefits

While the lack of interest charges may initially sound restrictive, it’s essential to consider the benefits that come with the Tomo Credit Card:

• Up to $10,000 credit limit: Tomo offers a generous credit limit, allowing you to make substantial purchases and manage your finances effectively.
• Expedited autopay options: Tomo provides flexibility with autopay, offering weekly, bi-weekly, and monthly payment schedules to suit your preferences.
• Non-U.S. citizens eligible: Tomo doesn’t discriminate based on citizenship, making it accessible to a broader audience.
• No security deposit required: Unlike some secured cards, Tomo doesn’t demand a security deposit, making it more accessible to those with limited resources.
• Reports to all 3 major credit bureaus: Timely payments and responsible card use will reflect positively on your credit reports.

Store Credit Cards

Store-Specific Benefits

Store credit cards are often easier to qualify for and can provide exclusive discounts and rewards when used at specific retailers.

Recommended Store Credit Cards

Target RedCard™ Credit Card

• 5% Discount on Target Purchases
• Free Shipping at Target.com
• Extended Returns

Amazon Store Card

• Special Financing Options
• Amazon.com Gift Card Rewards
• Access to Exclusive Amazon Offers

Macy’s Credit Card

• Discounts on Macy’s Purchases
• Star Passes for Extra Savings
• Birthday Rewards

Prepaid Debit Cards

How Prepaid Cards Differ

Prepaid debit cards are not credit cards, but they offer a way to make electronic payments and control spending without the risk of accumulating debt.

Top Prepaid Debit Cards for Bad Credit

Netspend® Visa® Prepaid Card

• No Credit Check or Activation Fee
• Mobile App for Account Management
• Optional Savings Account

PayPal Prepaid Mastercard®

• Free Direct Deposit
• Cashback Rewards Program
• Account Alerts via Email or Text

Brinks Prepaid Mastercard®

• Mobile Check Deposit
• 24/7 Account Access
• Purchase Protection

Credit Union Options

Why Credit Unions?

Credit unions are member-owned financial institutions that often offer competitive credit card options for individuals with bad credit.

Credit Union Credit Cards for Bad Credit

Navy Federal Credit Union nRewards® Secured Credit Card

• Rewards Program
• Competitive Interest Rates
• No Annual Fee

PenFed Promise Visa® Card

• Low APR on Purchases
• No Foreign Transaction Fees
• Contactless Payment Technology

Alliant Credit Union Visa® Platinum Rewards Credit Card

• Rewards Points on Every Purchase
• No Balance Transfer Fee
• Worldwide Acceptance

Online Lenders

Digital Alternatives

Online lenders have emerged as convenient options for obtaining credit cards, even for individuals with bad credit.

Top Online Lender Credit Cards

Credit One Bank® Platinum Visa® for Rebuilding Credit

• Cashback Rewards
• Customizable Card Design
• Free Online Access to Credit Score

First PREMIER® Bank Mastercard® Credit Card

• Instant Online Response
• Credit-Building Tools
• Optional Overdraft Protection

Merrick Bank Double Your Line™ Visa® Credit Card

• Credit Limit Increase Opportunity
• Free FICO® Score Monthly
• Access to MyMerrickMobile

Co-Signer Credit Cards

The Co-Signer Advantage

Co-signer credit cards allow individuals with bad credit to benefit from a co-signer’s good credit history.

Credit Cards with Co-Signer Options

Capital One Platinum Credit Card

• Co-Signer Option Available
• No Annual Fee
• Credit Limit Increase Potential

Wells Fargo Cash Back CollegeSM Card

• Designed for Students with Limited Credit
• Co-Signer Option
• Cashback Rewards

Petal® 2 “Cash Back, No Fees” Visa® Credit Card

• No Annual Fee
• Cashback Rewards
• No Co-Signer Required, but an Option for Added Security

Credit Builder Loans

Building Credit Gradually

Credit builder loans are installment loans designed to help you establish or rebuild credit.

Loans to Rebuild Your Credit

Self Credit Builder Loan

• Competitive Interest Rates
• Savings Account at the End of the Term
• No Credit Check Required

Credit Strong® Installment Loan

• Fixed Monthly Payments
• Reports to Major Credit Bureaus
• Credit Monitoring Included

Chime Credit Builder Visa® Credit Card

• No Credit Check
• Secured by Your Chime Savings Account
• Automatic Payments for Convenience

Tips for Responsible Credit Card Use

Managing Your Finances Wisely

To make the most of your credit card and improve your credit score, follow these tips:

• Pay Your Bills on Time
• Keep Your Credit Utilization Low
• Monitor Your Credit Report
• Avoid Maxing Out Your Credit Card
• Don’t Apply for Too Many Credit Cards at Once

Avoiding Common Pitfalls

Understanding the potential pitfalls of credit cards can help you navigate the world of credit more effectively.

To Recap 

In this guide, we’ve explored a variety of credit card options tailored for individuals with bad credit. Whether you choose a secured card, an unsecured card, or another credit-building method, responsible credit use can help you rebuild your financial standing. Remember that improving your credit takes time, so be patient and consistent in your efforts.

FAQs

Can I get a credit card with bad credit?

• Yes, there are credit card options designed specifically for people with bad credit. These include secured credit cards, unsecured credit cards, and store credit cards.

How can I improve my credit score with a credit card for bad credit?

• To improve your credit score, make on-time payments, keep your credit utilization low, and monitor your credit report for errors.

Are there any annual fees for credit cards for bad credit?

• Some credit cards for bad credit may have annual fees, but there are also no-annual-fee options available.

Can I upgrade from a secured credit card to an unsecured one?

• Yes, with responsible credit use and improved credit scores, you can often upgrade from a secured credit card to an unsecured one.

What’s the fastest way to rebuild bad credit?

• The fastest way to rebuild bad credit is to consistently make on-time payments, keep credit utilization low, and address any negative items on your credit report.

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