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FULL LIST OF EDITORIAL PICKS: BEST CREDIT CARDS FOR BAD CREDITBefore applying, confirm details on the issuer’s website. Discover it® Secured Credit CardOur pick for: Rewards and upgrading Like other secured credit cards for people building or rebuilding credit, the Discover it® Secured Credit Card requires a cash security deposit. Unlike most others, it offers rewards. But what really makes it stand out from the competition is its upgrade possibilities. The issuer has a process in place for automatically reviewing accounts for possible transition to an unsecured card. Read our review. Capital One Quicksilver Secured Cash Rewards Credit CardOur pick for: Rewards and upgrading The Capital One Quicksilver Secured Cash Rewards Credit Card offers an impressive combination of features for those with poor credit. A deposit is required, but in exchange you get a $0-annual-fee card that reports to all three credit bureaus; an automatic credit limit review after six months; and a possible upgrade path to an unsecured Capital One card. Oh, and 5% back on hotels and rental cars booked through Capital One Travel, plus 1.5% back on all other purchases, which equals what you'd find on many unsecured cards. Read our review. Capital One Platinum Secured Credit CardOur pick for: Low deposit The Capital One Platinum Secured Credit Card requires a security deposit, as do all secured credit cards. But while most cards require you to put down a deposit equal to your credit line, this one allows some qualifying applicants to get a $200 credit line with a deposit starting at $49. Further, you can be automatically considered for a higher credit line with no additional deposit in as little as six months. Read our review. OpenSky® Secured Visa® Credit CardOur pick for: No credit check or no bank account The OpenSky® Secured Visa® Credit Card charges an annual fee, but a lot of people will still want to take a look at it for two reasons. First, there's no credit check required. Second, you don't need a traditional bank account; you can fund the deposit or pay your bill with a money order or Western Union payment. Read our review. Chime Credit Builder Visa® Credit CardOur pick for: No credit check and easy account management This card has no minimum deposit requirement, charges neither an annual fee nor interest, and doesn't require a credit check, and you can automate your payments so you're never late. But to get it, you must be a Chime banking customer, which is an extra hoop to jump through — and which comes with its own considerations when it comes to customer service. Read our review. Tomo Credit CardOur pick for: No credit check, annual fee, security deposit or APR You can potentially qualify for the Tomo Credit Card with a low (or no) FICO score because instead of a credit check or security deposit, the card's issuer can weigh several alternative factors like income and account balances. The card earns 1% cash back, and it doesn’t charge interest or fees because you can’t carry a balance from one month to the next. Read our review. Grow Credit MastercardOur pick for: No credit check, annual fee, security deposit or APR The Grow Credit Mastercard doesn’t require a security deposit or a credit check. It allows you to establish a credit history by paying for qualifying subscriptions like Netflix or Spotify, and it doesn’t charge any interest or fees. There's no APR because you cannot carry a balance on the card. Read our review. Credit Builder Secured Visa® Credit CardOur pick for: Adjustable credit limit The Credit Builder Secured Visa® Credit Card from Armed Forces Bank makes it easy to increase your credit line over time to give you greater flexibility and keep your credit utilization low. You can increase your limit in $50 increments simply by depositing more money at any time. Read our review. DCU Visa® Platinum Secured Credit CardOur pick for: Low fees and interest The DCU Visa® Platinum Secured Credit Card is a secured card for bad credit, but it offers a lower interest rate than many unsecured cards for people with good credit. You must be a member of Digital Federal Credit Union to get this card, although you can join by becoming a member of a partner organization for as little as $10. Read our review. • • • OTHER RESOURCESHow to tell if you need a credit card for bad creditWhen you apply for a regular credit card, you're essentially asking the card issuer to lend you money without any guarantee (besides your promise) that you'll pay it back. Unlike with a mortgage or car loan, there's no collateral backing up the deal. If an applicant doesn't have a good credit score, the issuer considers the risk to be too big, and that's why it rejects the application. Credit cards for bad credit, however, have features that reduce the risk to card issuers, so they can approve more people. The application process for credit cards for bad credit is more "forgiving" than for regular credit cards. Credit cards for bad credit might be a good fit for you if: Your credit score is below 630In general, a credit score below 630 (on a range of 300-850) is considered bad credit or poor credit. If you don't know your credit score, you can get it for free through NerdWallet. Get your free credit score here. If you have a bad score, a credit card specifically designed for people in your situation is one of the best tools for rebuilding your credit. You have no (or very little) credit historyThe term "bad credit" is commonly associated with mistakes, such as missing payments or having accounts turned over to collection agencies. But people who have a thin credit history or none at all can also benefit from a credit card for bad credit, since they, too, are considered risky borrowers. What causes bad credit?Multiple factors go into credit scores. Some are relatively minor — applying for a new credit card, for example, can knock a few points off anyone’s score temporarily because it suggests a need for more financial resources. Others are more serious. Bankruptcy, charge-offs or missed payments can do major damage to credit scores. Here are the main factors in your credit score and how they can add up to bad credit:
What's the easiest credit card to get approved for?Approval for any credit card is never guaranteed. In addition to your credit history, issuers look at your income and other factors. Still, some cards have standards that are not as difficult to meet as others'.
The costs of bad creditCredit scores are designed to measure one thing: How much of a risk it is to lend someone money. The lower the perceived risk, the higher the score. Having bad credit limits your options for borrowing money: If you can get a loan at all, you’ll pay higher interest. There are other costs, too. Even though they’re not designed as such, credit scores have come to be interpreted as a general measure of reliability. Employers, landlords, insurers, cell-phone providers, utility companies and others use them to evaluate customers or applicants. A NerdWallet survey found that many people are unaware of these effects. Significant numbers of Americans didn’t know that bad credit could prevent them from renting an apartment (23%), raise their car insurance costs (43%), limit their options for cell-phone service (49%) or force them to provide security deposits for utility service (52%). Further, 1 in 5 respondents thought a score of 600 — which is bad credit — was enough to qualify for any credit card. If you have bad credit, or no credit, a card designed specifically for someone like you is usually the quickest and easiest way to build credit. Choosing a credit card for bad creditCredit cards for bad credit typically come with low credit limits and high interest rates. That’s OK for now, because the primary purpose of these cards is to help you build credit or rebuild credit. When choosing a card, focus on:
How to apply for a credit card for bad credit1. Know your credit scoreOne of the biggest mistakes people make with credit card applications is choosing cards they don't qualify for. Applying for a card that requires good credit when you have a score of 580 is a guaranteed rejection. That wouldn't be so bad except that each application goes on your credit report and can hurt your score. Multiple applications can just compound the damage. Before you apply, know where you stand. You can get your free credit score through NerdWallet. 2. Find a card that suits your scoreCards on this and other NerdWallet pages have a "recommended credit score" graph that shows what kind of credit you'll need to qualify. If you're logged in to NerdWallet with your free score, you'll be able to see where your score lands on that graph. If you're not logged in but know your score, check how it compares to the recommended range. 3. ApplyClicking the "apply now" button for a card takes you to the application. You'll usually have to provide your name, address, phone number and email address. Your Social Security number is necessary to check your credit and for government financial reporting rules. The application will usually ask about your income as well. 4. Fund your security depositWith a secured credit card, the issuer won't open your account until you're provided your security deposit. Most cards have a minimum in the range of $200 to $300. Your deposit typically determines your credit limit, so if you deposit $500, you'll have a credit limit of $500; deposit $1,000, and you'll get a credit line equal to that amount. Issuers let you fund the deposit with a direct transfer from a checking account; some allow you to pay by money order if you don't have a bank account. 5. Receive your cardOnce you fund your deposit, you'll get your card. Start using it to build a positive credit history by following the guidelines below. How to raise your credit score using a credit cardA low credit score isn’t a life sentence. It’s a starting point. Using a credit card responsibly is one of the fastest ways to build credit. Follow these tips:
CREDIT CARDS TO AVOIDMany credit cards that are marketed to people with bad credit are expensive. These cards might not require a security deposit, but they impose an array of steep fees just for the privilege of carrying and using them. These can include application fees, processing fees, activation fees and monthly “maintenance” or “membership” fees, in addition to annual fees. Add up those fees, and they can easily cost you more over the first couple of years than the deposit on a good secured credit card — and, unlike a security deposit, the fees you pay are money you’ll never get back. These cards can even cost more to carry than some of the best rewards credit cards on the market. Their ongoing interest rates tend to be high as well. NerdWallet recommends you steer clear of products like these: FIRST PREMIER BANK CREDIT CARDThe fees on the First Premier Bank Credit Card are truly eye-popping. For starters, there’s a "program fee" that applies before you even get your card. Then there are ongoing fees that depend on your credit limit. This convoluted fee structure owes its existence to a provision of federal law. Under the Credit Card Act of 2009, the fees on a credit card in the first year the account is open can’t exceed 25% of the credit limit. Processing fees are charged before you open the account, so they don’t count against the 25% cap. After the first year, there are no limits, so that’s when monthly maintenance fees kick in. As a result, you’ll pay between $120 and nearly $175 a year in fees for this card. On top of it all, the APR on this card was 36% as of June 2019 — one of the highest interest rates on any card. HORIZON GOLD CARDThe banner across the top of this card’s website reads: “Bad Credit, No Credit? Low Score? NO PROBLEM.” In reality, though, there are multiple problems. The Horizon Gold card advertises an unsecured $500 credit limit, but you might have to read the website carefully to recognize that it’s simply a store card that you can use at just one place: the Horizon Outlet online mall. The “membership” fees required to use this card come out to nearly $300 a year, and there’s even a one-time $5 “issuance and account validation fee” just to get the card. This card’s issuer, Horizon Card Services, offers several other cards, all of which can be used only at the Horizon Outlet. They include the NetFirst Platinum card, the Freedom Gold, the Merit Platinum and the Group One Platinum. CREDIT ONE CREDIT CARDSCredit One Bank — not to be confused with Capital One — specializes in credit cards for those with less-than-great credit. Its offerings include the Cash Rewards Visa Card and the Platinum Visa for Rebuilding Credit, as well as the Official NASCAR Visa. The Credit One website is maddeningly vague about what kind of card you’ll end up with if you apply. For example, your annual fee could be anywhere from $0 to $75 in the first year and $0 to $99 after that. You may or not get a grace period. You might get rewards on all purchases, or only some, or none. There are also complicated, confusing rules on when your payments will post and when your available credit line is refreshed after making a payment. Our recommendation: Don’t bother trying to figure it out, and don’t bother applying. SURGE CARD MATRIX CARDAs of June 2019, these cards were charging a $125 annual fee in the first year for a minimum credit line of $500 — 25% of the credit limit, the legal maximum. In the second year, the annual fee drops to $96 — but you start paying $10 a month in maintenance fees, for total fees of $216 a year. The APR, meanwhile, was a whopping 29.99% as of June 2019. The Surge Card and Matrix Card are offered by Continental Finance. That company has several other cards with similarly jaunty names and the same janky terms: the Cerulean Card, the Reflex Card, the Fit Card and the Verve Card. TOTAL VISALike the First Premier Bank Credit Card, the Total Visa starts laying on fees before you even open your account. If you apply and are approved, you must first pay an $89 processing fee to get your card. The annual fee in the first year is $75. In the second year and beyond, the annual fee drops to $48 — but you start paying a monthly processing fee of $6.25, which comes out to $75 a year. Put them together, and the Total Visa card will cost you $164 in the first year and $123 every year thereafter. To top it off, this card’s APR as of June 2019 was an eye-popping 34.99%. Not acceptable. LAST RESORT OPTIONSINDIGO PLATINUM MASTERCARDAccording to the website for this card, the annual fee depends on a cardholder’s creditworthiness. It might be $0, it might be $59, or it might be $75 the first year and $99 every year thereafter. Which one will you pay? You have to apply to find out for sure. It’s safe to say, though, that people with bad credit are more likely to end up with a $75/$99 fee than a $0 fee. Even $59 is significantly more than you would pay in annual fees on a good secured card. The APR on the Indigo Platinum as of June 2019 was 24.90%. That’s high but within the typical range for a credit card for bad credit. You can do worse than this card — but you can also do much better. MILESTONE GOLD MASTERCARDThe Milestone Gold is offered by Genesis Bankcard Services, the same company that’s behind the Indigo Platinum. It, too, has fees that depend on creditworthiness: $35 a year, $59 a year, or $75 in the first year and $99 in subsequent years. Adding a layer of confusion, the first year’s fee might be divided between an “account opening fee,” which you pay before the account goes live, and an “annual fee,” which you pay afterward. This may be a way to avoid running afoul of the 25% rule. The APR is the same as on the Indigo Platinum, and our general assessment is the same: not the worst card, but far from the best. Which card is easiest to get approved for?Easiest Credit Cards to Get Approved for in 2022. OpenSky® Secured Visa® Credit Card.. Petal® 2 Visa® Credit Card.. The First Progress Platinum Elite Mastercard® Secured Credit Card.. Bank of America® Customized Cash Rewards Credit Card for Students.. Credit One Bank® Platinum Visa® for Rebuilding Credit.. Can I get a credit card with a 500 credit score?If you don't have the best credit score, that doesn't count you out for some solid credit cards on the market. Plenty of credit cards for a 500 credit score or lower offer credit-building tools and some may even offer rewards.
What credit cards can you get with a 560 score?Best Credit Cards for 560 Credit Score. Rewards Bank of America® Unlimited Cash Rewards Secured Credit Card.. No Credit Check OpenSky® Secured Visa® Credit Card.. No Deposit Credit One Bank® Platinum Visa® for Rebuilding Credit.. No Annual Fee Capital One Quicksilver Secured Cash Rewards Credit Card.. What kind of a credit card can customers with a bad credit history get?Best Credit Cards for Bad Credit (October 2022): Capital One Platinum Secured Credit Card: Best for rebuilding credit. Mission Lane Visa® Credit Card: Best for low annual fee. Discover it® Secured Credit Card: Best secured card with rewards.
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