Do you have little credit history or are struggling with a bad credit score? You’re likely going to get denied for many credit cards and loans you apply for.
Lenders want to ensure they are lending to financially responsible individuals. This makes it difficult on millions of people to obtain a credit card. However, there are still good options for those falling into this category.
Here’s the 5 Best Credit Cards for Bad Credit
1.Capital One Secured Mastercard
- Annual Fee: $0
- Regular APR: 26.99%
- Minimum Credit: 300-629
This is one of my favorite secured cards for many reasons. There’s no annual fee and you don’t have to come up with the full deposit upfront like many other secured cards. This means you can make the deposit in installments which is helpful if money is tight. With the Capital One® Secured Mastercard, however, you can get a credit limit of $200 for a deposit of $49, $99 or $200. Lastly, you can automatically increase your credit limit after 6 months as well as request a conversion from the secured to unsecured card.
Cons: Severely damaged credit may get rejected.
2. First Progress Platinum Prestige Secured Mastercard
- Annual Fee: $49
- Regular APR: 9.99%
- Minimum Credit: 300-629
Right off the bat, let’s take a look at the low-interest rate (at least for a credit card)! Credit cards have insanely high interest rates, especially for those with bad credit — often 25% or more. The First Progress Platinum Prestige Mastercard Secured Credit Card, however, offers a rate lower than what you’ll find on many products for people with good or excellent credit. A bonus to those worried about their poor credit is that they won’t do a hard inquiry on your credit report.
Cons: The annual fee is on the higher side.
3. Discover it Secured Card
- Annual Fee: $0
- Regular APR: 22.99%
- Minimum Credit: 300-629
The Discover it Secured Card may be the best credit card available for those with bad credit. There’s no annual fee, but here’s the kicker, you can receive cashback on your spending. More specifically 2% cashback on up to $1,000 worth of spending per quarter on restaurants and gas, and 1% on all other spendings. After 8 months of on-time payments, you’ll be eligible to upgrade your secured card to an unsecured one.
Cons: Need a bank account to make an initial deposit.
4. Self Visa Credit Card
- Annual Fee: $25
- Regular APR: 23.74%
- Minimum Credit: Any
The Self Visa Credit Card is a great option for those with below-average credit. It’s a unique card because there is no standard application process. Once you join Self’s credit builder program, you automatically become eligible for the credit card. This means there is no credit check or hard inquiry to receive the card. The payments are also reported to all three credit bureaus!
Cons: Annual fee and need to sign up for a credit-builder account.
Read the full Self Credit Card article.
5. OpenSky Secured Visa Credit Card
- Annual Fee: $35
- Regular APR: 17.39%
- Minimum Credit: 300-689
Similar to the Self Card, the OpenSky Secured Visa Credit Card doesn’t require a credit check, so even people with badly damaged credit may be able to qualify. However, this doesn’t mean everyone will be approved. There are still income requirements in order to get this card. Unlike the Discover it Card: You don’t need a bank account to make the initial deposit. You can make the initial payment with debit card, wire transfer, check or money order.
Cons: Annual fee and can’t convert to an unsecured card.
Final Thoughts
You can get a credit card with bad credit, but it won’t be an unsecured card with exclusive rewards. In general, the best credit cards for bad credit are secured cards with no annual fee, low APR or no credit check.
However, you don’t have to rely on this card forever. The goal is to obtain one of these cards and improve your credit. Then, you can move on to a better card and continue to build your credit.
All hope isn’t lost if you’ve managed to damage your credit in the past. These 5 cards offer you opportunity rebuild your credit and get you back on track. You just need to determine which card suits what you’re looking for in a secured card.
Jordan Parker is a former financial advisor and entrepreneur who teaches others about personal finance, investing, and real estate.
He resides in Milwaukee, WI and is the founder of byjordanparker.com.
