Best credit cards for bad credit
When you have bad credit/low credit scores, getting the best credit card can be challenging. This is because most issuers and lenders still consider you as a risky debtor. However, multiple credit issuers have designed specific cards to help people with bad credit to rebuild it and enjoy credit benefits. Although many of them are starter cards with few benefits or a cash deposit, they are still worth checking out if you want to fix your credit.
How to choose a credit card when you have bad credit
- Opt for a secured card
Unless you have a pending bankruptcy or you have not met the income requirements, you are eligible for a secured card aimed at repairing your scores. Over time, you can graduate from the secured to unsecured card. A secured card helps you to become disciplined in your spending and payments because the amount you spend is equal to your deposit.
- Look for features that will help you improve your credit
You already know the benefits of having a good credit. Therefore, your main goal is to maintain a good credit history and improve your scores. Some of the card characteristics that can help you increase your creditworthiness include:
– A card that reports to three credit bureaus: It ensures that your credit activity is applied while calculating your scores
– A card that offers credit education and evaluation: It means that you can get your credit scores analyzed, monitored, and evaluated free. This will help you make timely improvements.
– Cards with a grace period will help you avoid paying interest on purchases when you make payments on time.
– Cards without a penalty for late payments will help you save money and make timely payments.
- Think long term while comparing rates and fees
Since your immediate goal is to get a credit card, it is worth noting that you might have limited options due to your bad credit. As such, focus on the process of upgrading from bad to good/excellent.
Although it is quite difficult for a beginner to find a card with no annual fees or balance transfers, it is imperative to note that rates and fees are still avoidable.
Here is a list of the best credit cards to look out for when you have bad credit:
This is the top pick when you are looking for unsecured credit cards. It is offered by Celtic bank with a guaranteed approval for people with poor credit scores and bad credit. Surge Mastercard reports monthly to the three major credit bureaus, thus helping you build your credit over time. With it, you will also access your vintage scores from Transunion when you sign up for the e-statements. It also has a favourable introductory rate but does not charge transfer fees or foreign transaction. The regular rate ranges from 25 to 29%, which varies with the change in prime rates.
Indigo Unsecured Mastercard
This card is a good fit for people who have a pending, prior bankruptcy, or those who have undergone past court proceedings. Indigo Unsecured Mastercard reports your credit activity to the three major credit unions in the United States. It also offers protection against fraud, identity theft, and lost cards. The card has a no introductory fee on purchases and transfers but a regular rate of 24.9%. To qualify for this card, you only need to have a fair score and below.
Secured Mastercard from Capital One
A secured card means that you are paying a deposit before accessing the credit. This card is acceptable in many locations worldwide and reports to the three major bureaus. To make the refundable deposit, all you need is access to an authorised bank. The card offers you three deposit options depending on your income. The minimum deposit is $49 while the maximum is $200. After every six months, your history will be reviewed and considered for a higher limit or upgrade to unsecured card.
Opensky Secured Visa
This card gives an opportunity to all people, allowing each person to choose their own refundable deposit. The lowest deposit is $200. With this card, you are sure to be reported to the three major bureaus and upgrading your status in six months. The best part is that Opensky Secured Visa Credit Card offers education and tips to support you and help you build your score quickly.